VentureBeat

Latest round-up in the world of tech:

Defense Department’s Grand Challenge moves downtown — The great annual race of robotic cars, until this year held in the desert, is moving downtown. The DARPA-sponsored event awards the winner $2 million. Unmanned vehicles will attempt to avoid people and buildings instead of boulders and sagebrush, with no remote control or other human interference. (See Merc story here.) The goal is to help the Defense Department fulfill a Congressional mandate: that one-third of combat vehicles be unmanned by 2015. Guess this is a sign of the times: While the U.S. military rolled through the Iraqi desert with no problem, managing street warfare is more of a challenge. Meanwhile, a Jon Feiber, a venture capitalist sponsoring one of the competition’s entrants, suggests the project could help with traffic congestion. Another possible payback my be fuel efficiencey, if cars are pacing themselves at optimal distances from each other, and at optimal speeds.

Speaking of traffic, look at Wikipedia’s — Google traffic going to Wikipedia is exploding, with Wikipedia now the No. 3 website in Google’s downstream, after Google Image Search and MySpace, according to HitWise. That’s phenomenal, for a non-profit company that has less than ten full-time employees (Ars Technica has good summary. It’s costly, too. Wikipedia’s bandwidth this year is expected to cost up to $100,000 a month, and it’s running more than 350 servers. With annual costs at about $5 million a year, but incoming donations at barely $1 million, something might crack soon — the company says it only has three to four months of cash left. Put two and two together: If Wikipedia’s getting that much traffic, all is has to do is put up a few Google ads. If anything, Google will look more favorably at sending even more searchers over to Wikipedia — and monetizing the site would be easy. We don’t know founder Jimmy Wales’ personal motives, but publicly at least, he’s proclaiming he doesn’t want to let ads onto the site.

Fancy that, hedge funds are actually useful — The NYT cites a study showing that hedge funds boost the value of companies they invest in, at least in the very short run, on average, and holding on to the gains for at least a year.

For the green tech fans — William Hudson writes an engaging piece about the challenges faced by ethanol and other forms of alternative energy. He concludes with what we all should know, i.e., that the sun is where the magic is. Future breakthroughs will be around how we harness its immense power. That’s why investor Vinod Khosla is pitching the benefits of solar lately, and this goes beyond the solar panels we traditionally associate with solar.

Visto gets $35 million more, to sue? — When we asked the mobile messaging company Visto last Wednesday whether the Redwood City, Calif. company could comment on reports it had gotten $35 million more in venture capital, a spokeswoman said she couldn’t comment on “speculation.” Two days later, on Friday, the company issued a press release confirming the investment. So why was Visto so secretive, seeking to avoid acknowledging the December funding? Well, as Valleywag points out, the lead investor, Altitude Capital Partners, turns out to be a specialist in investing in companies with patents and “historical litigation.” We’ve already mentioned how Visto appears to be going down litigation path. It hasn’t made money in ten years, so perhaps this is the only way?

New York is back — Here’s a good story about New York’s reemergence as a technology hub, given its weight in the publishing and advertising worlds.
This, though, after the NYT recently wrote about Silicon Valley as the new hegemon.

Sparter, offers virtual currency trading — While auction giant eBay decided to ban sales of virtual property, there’s a new company, called Sparter, that is stepping in to let gamers trade virtual currency. The company has received venture capital funding from Bessemer Venture Partner, and while it wants to work with IGE, a service that lets gamers trade in their virtual currencies for one game in exchange for another, Sparter apparently wants to also let you bypass IGE, letting you trade directly with other gamers. (Via Virtual Economies.)

The mobile email company, Visto, has become one of the most controversial companies in Silicon Valley.

The Redwood City company has reportedly raised another $35 million in venture backing led by new investor Altitude Capital Partners, adding to the whopping $350 million the company has already raised. It is in the red, after ten years, and hasn’t announced a major customer in several months. Its penchant to file lawsuits is also worrying, and we’ve said before that is a reason why bias has crept into our reporting about this company.

Valley gossip site, Valleywag, says the company is on the rocks, but has no facts to back it up. PE Hub’s Dan Primack says the $35 million in cash, raised in December, would seem to contradict that, however there is no one on the record explaining the terms of that cash — and it is somewhat odd it wasn’t announced. Moreover, the company has a large cash burn rate, as Dan points out, caused by service contracts it pledged to.

Now we’re hearing its investors are spreading word that a 2007 acquisition is better than 50-50 odds. Yet we’re skeptical too, given that the company had said it planned to go public last year — and nothing happened (indeed, read that previous link for notes about the company’s questionable marketing). Indeed, with its huge cash burn, it may have to be sold.

Has this company hit the wall? We’ve contacted the company, and will report back if we hear anything.

Investors include Allegis Capital, Blueprint Ventures, Draper Fisher Jurvetson, ePlanet Ventures, GKM Ventures, Meritech Capital Partners, Oak Investment Partners and Rustic Canyon Partners.