VentureBeat

Microsoft’s Kevin Johnson moves to Juniper Networks — Microsoft’s lead on the failed Yahoo acquisition has called it quits, heading for the top post at software and device firm Juniper Networks. Johnson was the president of Platforms and Services, which meant he oversaw most of Microsoft’s web initiatives.

Xobni’s first employee heads to the Xobtuo — Gabor Cselle, a vice president and the first official employee at email startup Xobni, has resigned, stating that he wants to start his own company. Given his past experience and expertise, the new venture will almost certainly be email-focused as well.

Hackers continue to step up attacks in 2008 – Security firm Sophos has published research on the first half of the year, showing that malware levels continue to rise on the web. Businesses, also, are increasingly being used as both targets and launching points for attacks.

Humanoid robot soon for sale — No, it’s not the next-gen Realdoll. A French company called Aldebaran Robotics is preparing to sell its NAO humanoid robots for about $15,000 each. That’s far cheaper than the competition from Fujitsu and Honda. Of course, quality is the real issue, which is why you should actually use the money to go buy a whole herd of Pleos.

Space: The last (solar power) frontier — Sending up satellites to harvest solar energy and beam it back down to earth might be a bright idea, according to this New York Times Op-Ed. The solar crowd already contains many space cadets, so the scheme should work well.

Amazon doubles net with soaring sales — The web retailer bucked the market trend and posted unexpectedly strong results, reporting doubled second-quarter profit on a 41 percent increase in revenue.

Google’s Schmidt says the iPhone is good for Android — Top exec Eric Schmidt told an interviewer that he believes the iPhone is good for Google’s upcoming Android platform, at Fortune’s Brainstorm Tech event. The device, he said, has forced competitors to step up and make their own versatile handsets combining GPS, a camera, a computer and a browser.

Cisco acquires Pure Networks — The communications and IT giant paid $120 million for Pure, which was funded by Bessemer Venture Partners, Ignition Partners, Mayfield and Intel Capital, according to John Cook.

Passwords safe, San Francisco accuses admin of IT terror — The bizarre tale of a San Francisco city employee imprisoned for refusing to hand over the passwords to a city network continues, even now that the man has passed the password to smooth-talking mayor Gavin Newsom. The new accusation is that the felony suspect rigged the network to “implode”.

Classic Nintendo controllers at risk of extinction — The judge in a patent case relating to three of Nintendo’s older controller designs will ban sale of the controllers this morning. Nintendo can temporarily get out of the ruling by posting a bond, which it will do, along with filing an appeal.

Photo credit for Kevin Johnson: Fortune magazine.

Social web browser Flock has garnered a lot of hype since its release in 2005. It’s also won a lot of fans. Both likely played a role in its new $15 million fourth round of funding announced today. The round was led by Fidelity Ventures, with all previous lead investors, including Bessemer Venture Partners, Catamount Ventures and Shasta Ventures, participating.

Impressively, this round of funding actually surpasses all of Flock’s previous rounds combined.

This money will be used for the usual purposes such as research, development and marketing. An emphasis will be placed on global expansion as well as the company sets its sites on the 230 million members of social networks globally.

Flock is a browser just like Firefox or Internet Explorer except that it has built-in functionality for various social networks on the web. Say for example you sign in to your Flickr account, you can have Flock remember your info and keep it open in a sidebar tab and update you when your contacts post new photos. It also works with more traditional social networking sites as you might expect such as Facebook.

According to the company, since January of this year Flock’s user base has increased by more than 250 percent while its revenue has risen by more than 400 percent. As we’ve reported previously, Flock makes money thanks to a deal it has with Yahoo to use its search technology. This is similar to the deal Mozilla’s Firefox browser has with Google.

Flock is currently testing out its 1.2 Beta version of the software, which includes Digg integration. This is a pretty good idea and certainly hardcore Digg users will go crazy over it. While I don’t think anyone can accuse the browser of not looking nice, I still find it too slow for my tastes in what I use a web browser for: browsing the web.

Another service, Minggl, shares some similar social functionality of Flock but does it via a Firefox or Internet Explorer plug-in rather than an entirely different browser.

Here’s the latest action:

Mashup companies take over Web 2.0 — InfoWorld profiles three companies making announcements at this week’s conference: Serena, which is launching an online marketplace for business mashups; JackBe, which has a new version of its enterprise mashup platform; and Kapow, which provides a hosted service to build mashups that provide web intelligence. We’ll also be writing more about Rearden Commerce and Zude in the next few days. And we just covered SnapLogic, which provides data integration for, you guessed it, enterprise mashups, and has launched version 2.0 and professional editions of its software.

Linden Lab names Mark Kingdon as new chief executive — Kingdon previously spent five years running digital ad agency Organic. The appointment of someone with a stronger business background than founder Philip Rosedale makes sense, particularly since Linden Lab board member Bill Gurley told me the company needs a chief executive who can help it grapple with rapid growth. Less charitably, the appointment can be seen as an attempt to help Linden get back on track after struggling to live up to the initial promise of its virtual world Second Life. Rosedale announced last month that he plans to step down.

IBM buys storage company Diligent Technologies for $200M — The terms of the deal were not disclosed officially, but Israeli newspaper Globes says it was for $200 million. Diligent is IBM’s third Israeli acquisition this year.

StumbleUpon approaches 5 billion stumbles – The website-discovery and rating service is about to get its 5 millionth user, and is also getting very close to nearly 5 billion “stumbles” (recommendations). Not only is that a number just plain impressive, but since each stumble should improve StumbleUpon’s “discovery” service, it also means the site is getting better and better. StumbleUpon is owned by eBay.

Solar plant builder Stirling Energy Systems gets $100M — The funding comes from NTR plc. Stirling is building solar energy projects in the Imperial Valley and the Mojave Desert.

Walter Bender resigns One Laptop Per Child — Apparently Bender , who served as the organization’s president, is more interested in incorporating open source methods into education.

OLX, a company competing with classifieds site Craigslist, but more popular outside of the U.S. than it is here, has raised $13 million in a second round of financing.

The company, based in New York and Buenos Aires, is like Craigslist in that it focuses on urban centers to ensure mass. To gain visibility, it partnered with social networking company Friendster — which has also has more traction outside of the U.S.

The two-year-old company was started by Fabrice Grinda and Alex Oxenford. Grinda blogs about the recent funding here, saying it will help the company expand but also tide it over during the economic downturn.

It operates in 40 countries in 15 languages.

The funding comes from General Catalyst, Bessemer Venture Partners, Founders Fund and DN Capital. This adds to the $10 million the company raised in September 2006 from the same VCs and various angels.

The company is trying to differentiate itself by offering more modern features than Craigslist does — Web 2.0 bells and whistles like letting you easily promote listings on other websites, like MySpace, Xanga, and Blogspot.

Online entertainment network LiveUniverse has purchased struggling video site Revver, according to NewTeeVee.

The purchase price was substantially more than the $500,000 to $1.5 million Revver was supposedly asking for, says NewTeeVee’s unnamed source, but it was also under $5 million. Revver’s staff will continue to work under the new ownership.

The deal isn’t a huge surprise — more than a month ago, Contentinople reported that it was in the works, and since then, plenty of other blogs have reported their share of Revver-related rumors. When the rumors started, a Revver spokesperson said: “We’re constantly pursuing content and business partnerships, and that activity seems to invariably generate acquisition conversations and rumors. … If we commented on all the rumors, we wouldn’t have time to focus on our core business.”

Los Angeles-based LiveUniverse is run by former MySpace exec Brad Greenspan. The company owns LiveVideo, and apparently wants to add Revver to its network.

Revver, meanwhile, has been going through some shake ups, with chief executive Steven Starr stepping down last June, following the departure of cofounders Ian Clarke and Oliver Luckett in December 2006. The company appears to have suffered from the same problems afflicting plenty of other video sites: Difficulty making money from its content, as well as competition from video giant YouTube.

In the past two years, Revver raised around $13 million from venture firms Draper Fisher Jurvetson, Bessemer Venture Partners, Draper Richards and William Randolph Hearst III.

TODAY’S HEADLINES:

• Gelesis draws in $16M for obesity treatments (release)
• Tempo Pharma raises $8B for nanoparticle drugs (release)
• Calistoga Pharma receives additional $5M for cancer and inflammation drugs (release)
• Montreux Equity Partners closes $250M life-sciences fund (release)
• MTS Health Partners names Andrew Weisenfeld, Mark Epstein managing directors (release)
• T2 Biosystems names John McDonough as CEO (release)

Gelesis draws in $16M for obesity treatments — Gelesis, a stealthy Boston company working on “novel” obesity treatments, raised $16 million in a first funding round. Investors included Orbimed Advisors and existing investors.

According to this Boston Globe story, Gelesis is developing a capsule containing an undefined “substance” that would expand in the stomach once swallowed, creating a temporary sense of fullness. The substance, whatever it is, would later pass out of the body.

Tempo Pharma raises $8B for nanoparticle drugs — Cambridge, Mass.-based Tempo Pharmaceuticals, a biotech developing “nanoparticle” formulations for new and existing drugs, raised $8 million in a second funding round. Investors included Polaris Venture Partners, Venrock, Lux Capital, Bessemer Venture Partners, Alexandria Real Estate Equities and William Rastetter, the former chairman of Biogen Idec.

The funding is Tempo’s second in just seven months; last May, it raised $12.1 million in a first round. (See our coverage here.) Tempo says the round reflects a “significantly increased valuation.”

Like other nanoparticle-drug companies, Tempo aims to improve the safety and efficacy of existing drugs — here by packaging them together in tiny capsules that release two drugs sequentially, presumably maximizing their effectiveness while minimizing side effects. Other nanoparticle-based companies we’ve covered recently include Carigent Therapeutics (here) and Bind Biosciences (here).

Calistoga Pharma receives additional $5M for cancer and inflammation drugs — Seattle’s Calistoga Pharmaceuticals, a biotech focused on new cancer and inflammation drugs, raised an additional $5.2 million in its first funding round. That brings the total round to $26.2 million.

Current investors provided the new funds. Previous investors in the round included Frazier Healthcare Ventures, Alta Partners, Three Arch Partners, Amgen Ventures and Eli Lilly, according to this Fierce Biotech story.

Calistoga, which was spun out of Icos after its acquisition by Lilly, is developing drugs against a class of biochemical-signaling molecules known as phosphoinositide-3 kinase. It currently has two drug candidates in preclinical studies.

Montreux Equity Partners closes $250M life-sciences fund — The Menlo Park, Calif.-based VC firm Montreux Equity Partners closed a $250 million life-sciences fund. The firm said the fund exceeded a $200 million target.

Montreux said the fund has already invested in several pharmaceutical and medical-device startups, including Glaukos, Avantis Medical, Tobira Therapeutics and Sequel Pharmaceuticals. We previously noted their fundraising efforts here.

Here’s the latest action:

1. Bubble Video singer gets $3M
2. Bahu, a social network for European high schoolers
3. Vinod Khosla upset with California regulations
4. Technorati revises its front page yet again
5. Smilebox, a software download for sharing photos, videos and other media, raises $7 million
6. Microsoft announces display advertising on MSN Mobile
7. Competitious relaunches as RivalMap, gives you dashboard to track your competitors
8. Worst case scenario: The next Great Depression
9. Verizon to take over all your Internets

YouTube takes down “Here comes another bubble” video — Remember the fun video that circulated Silicon Valley last week, about us being in another bubble? Well it has just been taken down after someone told YouTube it violated some sort of copyright. Too bad, because the snippets in the video were so brief it’s hard to understand how any of it could be considered a rip-off. Kara Swisher posts about it all here. In fact, this weekend, we bumped into one of the singers in that video, Tom Shields (pictured left) of the Richter Scales, and he was pretty bubbly himself that the video had already got more than a million views (it hit Yahoo’s front-page); the take-down request certainly didn’t come from his side.

Speaking of Tom Shields, he just got $3M for YieldEx — While Shields’ video got hit with the take-down notice, the a capella singer has other things to be thankful for. Shields recently left his role as venture capitalist at Woodside Fund, and has founded a new company called YieldEx, which is still early, but aims to help Web site owners maximize their ad revenue. He’s mum on the details, but VentureBeat hears he has $3 million, mostly from Woodside. (See Shields’ blog here).

Bahu, a social network for European high schoolers — The Paris social network has gotten a first round of financing from Lightspeed-Gemini Internet Lab. The amount of the round was undisclosed. The site appears to have more MySpace than Facebook (it wants users to be able to promote their music, artists and writing). It said it had two million unique visitors in September.

Vinod Khosla upset with California regulations — The aggressive investor in clean-technology companies says that some of his solar and other companies are contemplating moving out of state. Details here

Technorati revises its front page yet again — Technorati, the blog search engine company, apparently doesn’t know what it wants to do. It keeps changing its face, and now looks quite similar to Techmeme, a site that focused on ranking popular blog and mainstream tech news. Technorati has raised a total of $21.6 million in venture capital across three rounds of financing. Techmeme has raised next to nothing.

Smilebox, a software download for sharing photos, videos and other media, raises $7 million — Smilebox is a Redmond, Wash. company that lets family and friends share your media inside digital scrapbooks, slideshows and photogreetings via email and blogs. It features designs from folks like Hallmark, Making Memories and others. The round is its second,and comes from Bessemer Venture Partners. It reports 1.3 million monthly users. Details here.

Microsoft announces display advertising on MSN Mobile — Paramount Pictures and Jaguar Cars North America are among the first companies to launch a campaign on the service, Microsoft said. Technology for it comes from ScreenTonic, a leader in mobile advertising in Europe that Microsoft acquired.

Competitious relaunches as RivalMap, gives you dashboard to track your competitors — We’ve covered Competitious in the past. Yesterday the company announced a new release, called RivalMap. It gives a web-based tool to manage information and knowledge about their competitors. More details at http://www.rivalmap.com and a video tour here http://www.rivalmap.com/tour/video. The company told VentureBeat several months ago it had raised angel funding. It is now looking to raise venture funding/

Worst case scenario: The next Great Depression — A diseased housing market and a weak dollar have economists and Federal officials chewing their fingernails, as evidenced by the latest quarter-point rate drop in interest rates, designed to stimulate the economy by making borrowing cheaper (thus encouraging spending). Predictions of recession are also on the rise, but just how bad could it get? If you’re prone to worrying, don’t ask Overstock.com CEO Patrick Byrne, who thinks we might be on our way back to the Great Depression. Better drop the Web 2.0 stocks and start investing in those canned food startups, if he’s right. More on his ideas from GigaOm.

Verizon to take over all your Internets — Verizon, which is one of the country’s major internet service providers, has deepened its re-direct scheme, where it seeks to exploit mistakes by users when they are typing in words by redirecting them to pages filled with ads where it can make money. The ISP is now hijacking valid attempts from users to reach web pages through simply typing in a domain name, e.g. simply typing ‘google’ in the site bar. They’ve also made the opt-out process nearly impossible, according to ClickZ. The re-directs lead to pages with Verizon’s own advertising. This comes after Verizon was forced to stop its earlier “Site Finder” initiative.

Millennial Media, a Baltimore, Md., company that serves ads to mobile phones, has raised a $15 million a second round of funding.

A bunch of companies have launched to grab a portion of the lucrative mobile ad market. The cut-throat competition has pushed companies like Millennial into aggressive marketing tactics that cross the line. Earlier this year, we caught the company running a fake ad counter on its home page, which gave the impression of many more ads being served on its network than were actually being served.

With those sorts of tricks, you’ve got to wonder how investors can trust it, but apparently they do. Charles River Ventures led the round, which included existing backers Bessemer Venture Partners and Columbia Capital.

The mobile ad market is expanding quickly, with some estimates saying it will expand ten-fold within four years, to more than $16 billion — so minor marketing antics may be easy for investors to forgive.

Millennial Media raised a $6.3 million in a first round earlier this year, from Bessemer, Columbia and Acta Wireless. Competitors include AdMob (backed by Sequoia and Accel), Enpocket (acquired by Nokia), Third Screen Media (acquired by AOL), and ScreenTonic (acquired by Microsoft Corp).

In September, Millennial Media said it would serve ads on MySpace’s mobile site and other News Corp. properties, including IGN, FOXSports.com, AskMen.com and RottenTomatoes.com.

Featured companies: Acceleron Pharma, Bledsoe Brace Systems, Eurobiobiz, Genoptix, Harmony Information Systems, ImmuneWorks, Pasteuria Bioscience, Renal CarePartners, Quantum Genomics, Synergy Software, Vitreo Retinal Technology

UPDATED: Expanded items on Genoptix and Acceleron Pharma.

Diagnostics biotech Genoptix prices IPO above range, raises up to $98M — Genoptix became one of the first biotechs in a long time to demonstrate some oomph with an IPO, pricing its shares above its expected range and then soaring nearly 50 percent in its first day of trading. Genoptix priced its shares at $17 apiece, above its expected range of $14 to $16, netting itself as much as $97.8 million in the process. (Actually, existing shareholders sold close to three-quarters of a million shares in the IPO, so the proceeds to Genoptix are more like $85.6 million.)

At the very least, the positive reception appears to support the notion that biotech investors are currently more interested in reliable service businesses such as Genoptix’s diagnostics work than they are in traditional biotech moon shots, since they offer lower risk even at the cost of slower growth. Perhaps there’s hope for Talecris Biotherapeutics after all.

We’ve covered the company here and here. The offering initially valued Genoptix at $265.2 million, although today’s share run-up to $25.35 now values the company at $395.5 million. Genoptix provides diagnostic services to cancer and blood-disease specialists in order to help with diagnosing and selecting appropriate treatments for various cancers.

Acceleron Pharma draws in $31M for tissue-regeneration drugs — Cambridge, Mass.-based Acceleron Pharma, a biotech focused on “regenerative” drugs that target a family of growth and development proteins, raised $31 million in a third funding round. Investors included Bessemer Venture Partners, MPM BioEquities, QVT Financial, Advanced Technology Ventures, Flagship Ventures, OrbiMed Advisors, Polaris Ventures, Sutter Hill Ventures and Venrock.

The company’s lead drug candidate, ACE-011, aims to stimulate bone regrowth in cancer patients. That drug should move into mid-stage clinical trials in the first quarter of next year. The company intends to begin early human tests of two other drugs — one designed to increase muscle mass and strength, the other an “anti-angiogenesis” cancer drug — next year.

OTHER HEADLINES OF NOTE:

• Medical-IT co. Harmony Info raises $28M, acquires Synergy Software (release)
• Vitreo Retinal Tech adds $3M to round for eye drugs (PE Hub)
• ImmuneWorks gets $300K for lung-disease drugs (release)
• Bledsoe Brace sells majority stake to Essex Woodlands (PE Hub)
• Quantum Genomics acquires Eurobiobiz (release)
• Renal CarePartners acquires two dialysis providers (VentureWire, sub req’d)
• Pasteuria Bioscience names David Duncan new CEO (release)

“Platform” has become a buzzword this past year. With more and more business going online, the big Internet companies want to put logs in the fire, and make their living rooms cozy: Like never before, they’re providing third-party software developers support services and access to its users. The most prominent example is Facebook, which lets developers build applications and make money freely directly within Facebook.

Another, older company that has helped pioneered this model is Salesforce. Tomorrow, Bay Partners and Bessemer Venture Partners will announce a fund of at least $25 million for startups that develop applications on Force.com, Saleforce’s software platform to help businesses to build their own applications and host them with Salesforce (our previous mention here).

As you’ll see from Saleforce’s stock price since going public three years ago, its story has been rewarded by Wall Street (image via Yahoo Finance). It’s stock is at an all-time high.

The two venture firms believe startups that develop applications using Force.com may be able to provider cheaper, easier-to-use applications to larger businesses, especially to mid-sized businesses that get ignored in favor of Fortune 500 client companies by business-software giants such as Oracle and SAP. Many of these mid-sized businesses, often defined as having between 50 and 500 employees, instead build their own software or do without.

Bay Partners has already bet on Facebook’s platform, announcing AppFactory in July, a program for providing seed-stage funding to startups that build Facebook applications (our coverage).

Bay Partners is optimist about Force.com because some of its portfolio companies have already used Salesforce’s AppExchange to connect with clients and grow their revenue streams. One such company is Eloqua, a startup that provides software that helps salespeople and marketers in a company coordinate their efforts to gain customers — it is making more than $10 million in revenues, the firm tells us.

Salesforce will advise the two firms on investments, providing background information and assistance with due diligence.

updated

In a highly risky strategy of piggy-backing on other carriers’ networks, Kajeet has raised $36.8 million in a second round of financing to offer cellphone services to tweens and teens.

It offers a dashboard for parents to control when the phone can and can not be used, along with wallpaper, games, ringtones, applications and more.

The Bethesda, Maryland company is brushing aside the grim evidence provided by string of disasters at other companies trying something similar. Amp’d Mobile was the most high-profile recent case of a so-called MVNO (or Mobile Virtual Network Operator) for youth that saw its business fall part because of high costs. Firefly, a venture-backed company that served teens and younger kids with a phone, also struggled. It was forced to restart again when its original investors bailed on the company.

Founded in 2003, but launching nationally six months ago, Kajeet is a pay-as-you-go service. The company charges 35 cents a day, 10 cents a minute and 5 cents per text message. The phones are available at Best Buy, Limited Too and Longs Drugs Stores and at the company’s Web site. It is not saying anything about its sales traction so far.

It operates on the Sprint PCS network.

Draper Fisher Jurvetson Growth Fund (DFJ Growth Fund) led the financing. Existing investors, including Bessemer Venture Partners, Fidelity Ventures, Gabriel Venture Partners and InterWest Partners, also participated in this financing.

Here are the reasons that Firefly faced, but only some of them will haunt Kajeet:

The premise that kids need specialty phones is flawed. They only get a phone for a year or two until they want the real thing. So there’s a very short lifecycle, and correspondingly weak lifetime revenue — given the cost of acquisition. Kids tend to break phones quickly or lose them, at which point the parents are not too happy. Third, the carriers tend to add a cheap but good phone for kids for say, only $10 a month. Firefly managed to get traffic in the carrier store, but then suddenly salespeople in the stores started switched customers over to the carriers’ own cheaper phone. So then the only sales model is to sell through stories or its own site, which is what Kajeet is doing.

However, Kajeet isn’t selling special phones, like Firefly. It is using normal phones, said Daniel Neal, chief executive and founder, in an interview, and so its model is vastly different from Kajeet’s, he says. The company is targeting the “sweet spot” of 11 to 14 year olds, he said.

And Neal reminds us that the MVNO record isn’t all bad. TracFone and Virgin Mobile are examples of MVNO services that have done well in the US, he said.

Kajeet previously raised a $27 million first round.