VentureBeat

RocketOn and Animax Entertainment are announcing today a partnership that will make it easy for groups of friends to visit web sites together — and then scribble all over them.

RocketOn’s technology allows you to create virtual characters, or avatars, that can walk and scrawl all over sites on the real web. In essence, RocketOn turns the whole web into a backdrop for a virtual environment.

The partnership with Animax, a creative agency, is significant since it promises high-quality animations and the likely involvement of Animax’s big-name clients. That’s what RocketOn needs to make the concept really take off.

Like somebody with X-ray vision in a sci-fi movie, you can only see this “parallel” virtual world layered upon ordinary web sites if you have your own character. The company does this by putting a layer of interactive Flash technology on top of web sites. You can download a browser plug-in and you’re up and running on any site. Or, if you don’t want to download a plug-in, you can visit the RocketOn site and log in there first. Then you can visit any parallel virtual world site through what RocketOn calls its “teleporter.”

By using the RocketOn technology, groups of friends can visit sites together and talk about them using live chat services. They can go on treasure hunts linking various sites and jump automatically from one page to another by entering a virtual door, or “worm hole,” left behind by others.

It combines the animated avatars with the real web and allows you to scribble all over the real web sites using a kind of virtual graffiti. Eric Hayashi, co-founder of the South San Francisco-based company, showed how his character could walk all over the VentureBeat web site and mark it up (see the purple avatar in image). Other avatars can join the party and (virtually) deface the web sites together. The physical changes you make, like drawing a red X through a site, aren’t made to the real web sites, only the sites as they are depicted inside the parallel virtual world.

In the partnership, Animax Entertainment will help RocketOn create parallel virtual worlds using its expertise in created animated content for major brands, media networks and movie companies. Animax and its clients (which include companies such as Disney, ABC, and Ford) will use RocketOn’s Parallel Virtual World Platform and authoring system. RocketOn will manage the entire platform.

Other developers will be able to add their own parallel virtual world layers on their own sites, using RocketOn’s tools. Among the applications possible are games, such as a faux Black Flag site that RocketOn created as a demo. You can visit the site and try to catch a bunch of roaches with a Roach Motel.  You can also create games where the object is to take over someone else’s web site or a series of web sites. If a company creates an application that generates revenues, RocketOn gets a cut.

How will RocketOn make money? You can dress up your avatar and buy extra things with points, said Steve Hoffman, chief executive of RocketOn. You can earn points either by buying them with real money or visiting sites. The latter is why the brands are expected to get involved. Companies can actually run marketing campaigns where they promote people to visit their sites with RocketOn avatars.

The company is in the midst of a private beta test now and recently launched the ability to create quests for groups of friends as well as animated monsters. If thousands of users visit the same web page at the same time, RocketOn creates another overlay room with a limited number of users.

RocketOn got seed funding of $800,000 a year ago and announced a $5 million round in February from D.E. Shaw Group. It has 12 employees. I’m waiting to see how this turns out. I can see how teens might find it cool to meet their friends and chat about sites while on those very sites. But I also think this technology could be used to create fascinating illusions, given the right design of avatars and clever web sites as the backdrop. That could be more broadly appealing.

Retailers are still in the dark ages when it comes to changing prices on items on store shelves. San Jose, Calif.-based Altierre allows them to join the 21st century by enabling retailers to change store-aisle prices on the fly.

The company sells product shelves lined with RFID (radio frequency identification) tags with liquid crystal displays. Store owners can use it to make pricing changes in just one store, regionally, or across a whole chain. The company said that of all the possible RFID applications, retailers considered this to be their No. 1 problem.

These so-called Class 4 RFID tags replace the 40,000 to 60,000 paper price tags in a typical store, which take considerable time to update or change. The retail industry spends an estimated $40 billion a year changing prices manually, according to Altierre. The tags are two-way tags with both active and passive communication.

This bright idea has enabled the company to raise a third funding round of $22 million. The Galleon Group led the round and returning investors included ATA Ventures, the D. E. Shaw group, Dupont Capital Management and Labrador Ventures. To date, the company has raised $52 million since the company was founded in 2003.

The company is co-developing its system with several of the nation’s top-10 grocery chains. The promise is big savings for retailers. With Altierre’s system in place, an executive at a retailer’s headquarters can change the price of any product in some or all stores via computer commands, which are transmitted to the tags through wireless radio signals. It gives retailers much more flexibility to change prices based on store traffic and season. The tags also let retailers instantly launch promotions such as “buy one, get one free.”

Companies such as NCR and others have tried similar approaches in the past but the concept never got off the ground. Some companies, such as Wal-Mart, are in the midst of rolling out RFID tags to keep track of goods in the supply chain and in distribution warehouses. But they haven’t used them much on store shelves.

Altierre has a test center where it has its chips and software in place. The company says it is getting good feedback so far. RFID has raised considerable privacy concerns, but mainly out of a fear that retailers will eventually use it to tag individual retail items, which could be tracked wirelessly. Altierre, however, is putting the tags in shelves, not on store items. Hence, tracking an item isn’t possible after a consumer buys it.

But shelf-tagging can raise concerns. Back in 2003, anti-RFID activist Catherine Albrecht raised alarm bells when she learned companies were testing shelf-tagging along with video surveillance technology. (Go to Spychips and search on “store shelves.”) Wal-Mart tested a kind of shelf-tagging in 2003 but ended the experiment because of privacy concerns. IBM has also talked about the concept for a number of years, which raises the question: If the idea has been around for a long time, why hasn’t anyone done much with it so far?

The company is run by Sunit Saxena, chairman and CEO. He said the company is now moving toward production but can’t talk about customers because of non-disclosure agreements.

RFID has been slow in rolling out in the retail supply chain because the system requires an investment in new technologies, such as the wireless tracking systems. But the benefits of RFID are that it can be much more useful than barcodes. If Altierre can piggyback on the RFID warehouse infrastructure and get its tags into store shelves and its readers into the hands of store employees, that is half the battle. Altierre might also be the application that gets RFID into the stores, Saxena says, and then the infrastructure “could be the gift that keeps on giving for the retailers.”

After that, the company says that it will be able to save retailers a lot of money and effort. But it has to steer clear of any privacy concerns as it does so.

Saxena says the company will disclose later the exact architecture of its technology and how much it costs. He says it will be priced so that retailers can get a return-on-investment in a year or so; meanwhile, the tags last five years.

TODAY’S HEADLINES:

• Romark Labs raises $18M for hepatitis drugs (release)
• Cubist buys Illumigen Bio, a hepatitis-drug biotech, for $9M (release)
• MedCap voices opposition to VaxGen-Raven Bio reverse merger (release)
• NeuroMetrix acquires EyeTel Imaging assets for $10M (release)
• Solstice Neurosciences appoints Dennis Smith as CEO (release)
• LeMaitre Vascular snaps up graft maker Biomateriali for €4M (release)
• Bosch Group acquires remote health-monitoring co. Health Hero Network (release)

Romark Labs raises $18M for hepatitis drugs – Tampa, Fla.-based Romark Laboratories, a biotech developing drugs for hepatitis and other conditions, raised $18 million in a an institutional financing. D.E. Shaw Group provided the funding.

Romark says its work on dysregulated cellular pathways led to its discovery of a new drug class known as the thiazolides. The company has already had its first product approved for the treatment of severe diarrhea, and is testing that drug in hepatitis, gastroenteritis and Crohn’s disease as well.

Cubist buys Illumigen Bio, a hepatitis-drug biotech, for $9M – Illumigen Biosciences, a Seattle biotech that develops drugs by studying beneficial human mutations, agreed to be acquired by Cubist Pharmaceuticals for $9 million in cash. The release is here.

Cubist will also pay Illumigen shareholders up to $75.5 million if it reaches certain milestones in the development of Illumigen’s lead compound, a protein-based drug for treating hepatitis C. If Cubist develops Illumigen products for othe viral diseases, payments of up to $117 million could apply. Upon commercialization, Cubist would make additional payments of up to $140 million.

Updated

Reactrix, a Redwood City company that beams interactive advertising onto the floors of malls and theaters, has raised a very large $45 million to allow it to expand and attract new advertisers.

In malls, Reactrix’s product beams light down on to a rectangle mat on the floor. This lets people kick virtual footballs or other objects around on it, among other things. Big brands, such as Coca-Cola, Dockers and Hilton can place their virtual products in the middle of the mat (see image at left).

The company says it has signed exclusive agreements with the nation’s six largest mall owners (known as REITs, for Real Estate Investment Trusts), which the company says gives it access to more than 80 percent of the malls in plum geographic areas. It has got 165 installations, and will be profitable this year, said Reactrix chief financial officer, Peter Bardwick. The company has now raised $68 million since 2001.

He said the large round would be the company’s final one.

Leading the financing were The D.E. Shaw Group and Menlo Ventures. Existing investors Mobius VC, Thomas Weisel Venture Partners and Worldview Technology participated.

One question we have about this: What happens when mall visitors get immune to this sort of thing and begin to glaze over? Will advertisers pay big bucks for this — enough so that this company can make a return on the large amount of cash now invested in it?