VentureBeat

A number of companies decided to compete with DEMO for media coverage today by announcing some rather large acquisitions:

Paypal ponied up $170 million for Fraud Sciences, which prevents online fraud;

Nokia paid $153 million for Trolltech, which helps developers build cross-platform applications;

GSI Commerce gave $157 million for E-Dialog, an e-commerce company;

Finally, Imeem bought Anywhere.fm, an internet radio service.

Here are a few notes on each:

Paypal’s acquisition of Fraud Sciences was an all-cash deal for $170 million. The company had taken less than $20 million in funding to date, from investors Redpoint Ventures and BRM Capital. Fraud Sciences tracks online buyers to pin-point suspicious behavior, and is supposed to be particularly good at detecting fraudulent overseas transactions, a particular pain point for Paypal. (Press release)

Nokia also paid cash for Trolltech, which was a publicly-listed company on the Oslo Stock Exchange, but also had investors including Index Ventures. Simply put, Trolltech’s application development framework, called Qt, makes it much easier for developers to build applications that work across both PCs and mobile phones, as well as on the web. That sets Nokia up nicely to compete with Google’s Android, which we’ve covered here. (Press release)

Neither GSI Commerce nor E-Dialog is well known locally, but the acquisition price should turn some heads for its investors, which include Flagship Ventures and Commonwealth Capital Ventures. The company had taken about $20 million in funding, according to Xconomy. (Reuters)

Imeem likely didn’t pay that much for Anywhere.fm, at least in comparison to the price of the above three acquisitions. Then again, for a three-man startup that came out of Y Combinator less than a year ago, with no venture funding, even a few million is significant. Anywhere.fm, which only ever took angel funding, has about 60,000 users and will continue to operate as its own service. It will likely benefit greatly from the business deals Imeem has made with the major music labels, covered in more depth here. (Press release)

When we first talked with Pudding Media CEO Ariel Maislos in September, he showed us his company’s software — a voice-recognition system capable of picking up keywords from conversations and using them to deliver contextual advertising to users.

The system isn’t working perfectly, but Pudding Media provides a good example of a company that’s moving into new territory hoping to succeed against significant technical barriers. Its potential has now led VCs to place a significant $8 million bet on the technology.

When working as planned, Pudding’s software listens to the conversations of users for keywords from its database. For instance, if we were talking about having a lunch meeting, it might pick up the words ’sushi’ and ‘San Francisco’ to pop up an ad for a local Japanese restaurant.

To become more accurate, Pudding must assemble a large database or “taxonomy” of terms that people might use. Part of the challenge for the company is simply building that database, much as Google’s Adsense built a database of relevant keywords people use in searches.

The difference between what Pudding does and web advertising is that Pudding won’t save your conversations and keywords to build up an advertising profile over time. The keyword lists from each conversation are deleted upon its conclusion, a measure the company has taken to forestall user concerns over privacy.

Instead, the advertisements will be entirely determined by the conversation at hand, and will attempt to track, in real-time, what users are talking about. That can have some interesting (and inaccurate) consequences, as we found before, but the results should continue to improve with time.

For now, the company has some breathing room. There are no direct competitors to its service. It’s also only active through its own ThePudding.com website and a partnership with Meebo, for the moment. However, Pudding’s keeping an eye out for potential partnerships.

Even mobile carriers might eventually want to use the service, suggests Ken Elefant of Opus Capital, the lead VC firm in the investment. Because consumers are not willing to pay as much for minutes as in the past, mobile carriers are having to begin thinking about how they will advertise. Pudding could also work on a cellphone, though perhaps less effectively than for a user watching a computer screen.

The $8 million investment is Pudding’s first full venture round. Besides Opus, BRM Capital also participated.

Altair, an Israeli company, is joining the race to be at the forefront of what some believe will be telecom’s next hot trend—mobile WiMAX. Altair, which makes chips that work with mobile WiMAX networks, announces today an $18M round of funding.

Mobile WiMAX is considered attractive because, compared to Wi-Fi, it offers much greater range and broadband access, although it has plenty of critics.

Wireless is a complex space with enough acronyms—UMTS, 3G and 4G, LTE, HSPA—to make your head spin. Paul Grim recently wrote a column for VentureBeat providing an overview of mobile WiMAX and competing standards and came away critical of WiMAX.

Mobile WiMAX is being backed heavily by Intel, Motorola, Sprint, Clearwire (who recently went public) and numerous startups, although the technology remains unproven. Sprint, for instance, plans to spend $2.8 billion over the next two years to roll out WiMAX infrastructure while Intel and Motorola have invested a combined $900 million in Clearwire. According to Infonetics Research, mobile WiMAX equipment increased 35 percent in the first quarter of 2007.

Altair is one of two dozen companies leading the charge to develop reliable, power-efficient and smaller WiMAX chips. (VentureBeat recently wrote about Beceem, one of those companies.)

Chip size matters. In this case, smaller is better to fit into ever tinier mobile phones.

According to Altair co-founder Eran Ershad, his company is set to ship chips that approach existing Wi-Fi chips in size and power consumption. While current WiMAX chips are roughly 400-500 sq mm, Wi-Fi chips are in the 80-100 sq mm range, showing how far the technology still has to develop. Altair claims to be the only company whose chips are comparable in size to current Wi-Fi chips. Altair has patented technology that controls interference from Bluetooth devices, a common concern among wireless users.

Bessemer Venture Partners led the funding round along with returning investors BRM Capital, Giza Venture Capital and Jerusalem Venture Partners. Altair plans to use the funding to expand sales and marketing, notably in Asia where low-cost manufacturers are located.

References:
http://www.cellular-news.com/story/24269.php
http://arstechnica.com/news.ars/post/20070109-8582.html

Update: Separately, WiQuest, an ultra-wideband wireless chip company of Allen, Texas, has raised $28 million in a third round of financing led by Adam Street Partners. D.E. Shaw Group’s venture arm and TriplePoint Capital also invested, as did existing investors Sequoia Capital, Menlo Ventures, Palomar Ventures and iD Ventures America. See statement here.