VentureBeat

Where is technology headed?

The Churchill Club of Silicon Valley just wrapped up one of its most anticipated events: the Annual Top Ten Tech Trends Debate. Five well-known and opinionated venture capitalists weighed in on what trends will take flight and what trends will fizzle out in the months ahead.

(The VCs are pictured, from left to right: Steve Jurvetson, Vinod Khosla, Josh Kopelman, Roger McNamee, Joe Schoendorf.)

The audience of around 300 people was asked whether it agreed or disagreed with the VCs’ predictions. I’ve ranked them below, according to how well they were accepted by the audience.

Last year’s predicted trends included a shakeout of Web 2.0 companies and the rising economic power of Brazil, Russia, India and China.

Trend 1: Customer data stored by different service providers will be combined to create more intelligent services. Josh Kopelman, managing partner at First Round Capital, a seed-stage venture fund, who founded online retailer Half.com (sold to eBay after a year for $300 million) said such customer data includes your financial records, dinner reservations, preferences in the iTunes store, random searches on Google and much more. In this way the Internet goes from satisfying explicit user needs (like searching for a friend to add on Facebook) to satisfying implicit needs (like telling who you should add and why adding them would be helpful to you).
Audience: 95 percent voted “Yes”.

Trend 2: Oil will have increasing difficulty competing with biofuels made from cheap non-food crops for transportation. Vinod Khosla (pictured left below, beside Kopelman), founder of Khosla Ventures, which focuses on alternative fuels and green technologies, said coal will become less competitive compared to reliable solar thermal and other alternative energy sources.
Audience: 90 percent voted “Yes”.

Trend 3: Water technology will replace abating global warming as a global priority. Joe Schoendorf, partner at Accel Partners, previously vice president of marketing for Apple, said the world is running out of usable water and this will kill millions more people in our lifetime than global warming.
Audience: 80 percent voted “Yes”.

Trend 4: The mobile device industry’s migration to smart phones will produce great disruption for big industry players. Roger McNamee, co-founder of Elevation Partners together with U2 lead singer Bono, and early private equity investor in technology, said the disruption will exceed what the PC industry experienced as it moved from character mode to graphical interfaces. Shifts in the competitive balance will hurt Motorola, Microsoft and probably LG Electronics, Samsung and Sony Ericsson. Apple, Nokia, Palm and RIM will do better. [McNamee's firm is an investor in Palm]
Audience: 75 percent voted “Yes”.

Trend 5: Booming market for healthy aging technologies Steve Jurvetson, managing director of Draper Fisher Jurvetson and well-known for his founding investment in Hotmail, said a booming market in such technologies will allow people in their 60s and beyond to continue working and living a good life. Every 11 seconds, a baby boomer from the 1940s turns 60. These people have time and money and are Internet-savvy, so they represent an enormous market for services like mental exercise programs and online education in various topics. It fits into a larger vision that could also include an eBay for information services that exceeds the market for physical goods.
Audience: 70 percent voted “Yes”.

Trend 6: Four-fifths of the world population will carry mobile Internet devices within five to 10 years. Schoendorf said mobile Internet devices are rapidly becoming the leading device category.
Audience: 50 percent voted “Yes”.

Trend 7: Algorithms will be constructed to develop new industrial chemicals, new biofuels and eventually artificial intelligence. This was Jurveston’s prediction.
Audience: 50 percent voted “Yes”.

Trend 8: The mobile phone is your most important device. This prediction by Khosla is similar to Trend 6, but he predicted an even more intimate connection with the phone: Mobile phone applications will extend beyond e-mailing to include a virtual credit card, your ID, access to location systems and personal information filing systems. If you lose your phone, your data on it will all be backed up on a network so that you can load it all on to a new phone. Ten years ago people thought it would be ridiculous to have a camera in your cell phone, in two years you will have two cameras per phone – one for taking photos of yourself, and one for taking photos of others.
Audience: 40 percent voted “Yes”.

Trend 9: There is going to be a venture capital shakeout. Lower costs and barriers to entry for startups will have a dramatic impact on the venture capital industry and lower returns. This was Kopelman’s prediction.
Audience: 40 percent voted “Yes”.

Trend 10: Within five years everything that matters to you will be available on a device that fits on your belt or in your purse. This was McNamee’s prediction, and it’s similar to Trend 8. This will cause a massive shift in Internet traffic from PCs to smaller devices.
Audience: 30 percent voted “Yes”.

[Photos by Cecilia Aronsson]

It seems like a good idea, at first: Pipe carbon dioxide emissions from power plants or industrial processes through water containing algae, and the algae will absorb the CO2 for its own growth, in turn being harvested to make biodiesel. But like most good ideas, the implementation has proven more than a little tricky.

GreenFuel Technologies is a startup we’ve covered followed as it moved from high-flying newcomer, to apparent failure, back to spotlight darling. The “apparent failure” part began with problems in scaling. GreenFuel’s plan appears to work fine on a small scale, but when it tried to do a commercial-size project last year, the algae over-performed to the point of killing itself off, doubling costs and leading to layoffs of 50 people.

Instead of letting the company crumble, one of its investors, Polaris Venture Partners, sent in general partner Bob Metcalfe for emergency resuscitation. The move appears to have worked — a $5.5 bridge loan kept the company afloat until two months ago, when we were able to report a $92 million project financing for the company to build a bioreactor in Europe. Now $13.9 million more has been provided in an extension to its second round of financing, for further development.

However, that doesn’t necessarily mean blue skies ahead. In fact, a full $6.3 million of that amount will go toward retiring debt — likely the same bridge the company took to survive. The $7.6 million remaining isn’t much, especially considering that part is going toward construction of a project the company has not yet announced.

The big question is what will happen in Europe. The company is likely moving at a frantic pace to re-prove the technology and get a third round of funding, not to mention staving off competitors with the same idea (but more opportunities left to screw up).

The round was provided entirely be existing investors, with Access Private Equity leading, alongside Draper Fisher Jurvetson and Polaris. The company is based in Cambridge, Mass.

The chemicals business has gone through massive shifts in the past, and it’s high time for another one, according to Christopher Gann, the CEO of Genomatica, who recently left a cushy position at industry giant Dow Chemical for the startup. Chemical manufacturing is perched atop the much larger fossil fuel market, thus suffering from the same high prices the rest of the world does — but, says Gann, it can be weaned off hydrocarbons.

Shifting away from oil and gas is one of the most common stories in cleantech, with numerous companies claiming that they can make transportation fuels from renewable sources like corn, sugar and grasses. By contrast, chemical manufacturing has received relatively little attention, despite the fact that most chemical manufacturing is also based on crude oil and natural gas, going through stepped processes to reach the desired end product.

Part of the reason is that there are tens of thousands of products to deal with, though some, like polyethylene, account for billions in sales yearly. However, Genomatica claims to have the scientific chops to simplify the problem, and produce the needed compounds on demand, and has raised $20.4 million in a second round, according to VentureWire.

The company was started by a team of biotech researchers from the University of California at San Diego, who started out working with E. Coli genes. Several years ago, they realized that their expertise could be more profitably applied to organisms for other industrial uses. Similar to startups like Amyris, LS9 and Synthetic Genomics, they decided to begin custom-making organisms to produce specific substances.

However, their combination of lab experience and modeling ability provided other opportunities, and the group decided to move in on the chemical industry. To create specific chemicals, the team identifies pathways in organisms with computational modeling techniques, then tests their theories out in the lab. The combination of modeling ability and lab technology in a single company is rare, says Gann, and provides a significant advantage.

Genomatica is currently testing out organisms for several chemicals, with plans to move on to pilot plants to prove the processes. However, after the pilot tests, the company again diverges from biofuels startups. It has no plans to make its own full-scale plants, instead adding what Gann calls “bolt-on” facilities to existing, multi-billion dollar plants owned by larger companies.

The feedstocks Genomatica can use vary widely. Syngas byproducts from biofuel manufacture can be used, as well as carbon dioxide, the culprit behind global warming. And the company can make use of “a very broad array of plant matter,” says Gann, exceeding the reach of biofuel makers, who need plants that are highly cost-effective. Cleanup after the processes should also be simpler, only requiring cleanup of the fermentation matter and dead cells.

Genomatica isn’t entirely alone in its plans. Novomer wants to revolutionize plastics manufacturing, although it will rely on chemistry, rather than biological processes. Another startup, Segetis, appears to plan on using biological feedstocks, but again, will use chemical processes; the company was backed last year by Khosla Ventures.

Of those companies, Genomatica has raised the most funding to date, about $24 million including its first funding. The backers in this round were led by Mohr Davidow Ventures, with participation from Draper Fisher Jurvetson and Alloy Ventures. The company is based in San Diego, Calif.

VentureBeat founder Matt Marshall would write this post but he’s busy getting ready to eat his hat.

Last month, we learned that instant message company Meebo was working on raising a round that would value it at up to $250 million. At the time, Marshall wrote: “I’m quite ready to eat my hat, if this funding happens,” because recession concerns have made investors more concerned about putting money into companies like Meebo that are still working out their revenue models.

Well, the funding appears to have happened. The Mountain View, Calif.-based company has raised $20 million on a $200 million valuation, according to Techcrunch, and was assisted by boutique investment bank Montgomery & Co. Before this story broke, a Meebo representative had contacted us to let us know that it has an announcement for tonight — which I assume is this funding news. We’ll keep you updated.

[Updated. The actual amount raised was $25 million, according to the company, and investors include lead JAFCO Ventures, with Time Warner Investments, KTB Ventures, and existing investors Sequoia Capital and Draper Fisher Jurvetson (DFJ) participating. The company currently claims more than 30 million users a month.]

Rumors that the round was nearing closure have been dogging the company since earlier this month. Meebo had talked to some companies about selling, from what we’ve heard, but instead it recently hired a chief revenue officer to help it make money on its own. The company is experimenting with ads that appear within its various instant message services, including ads that appear on its IM aggregation service on its home site, as well as in its chat rooms that you can embed on other sites.

The funding, if true, puts Meebo among the class of Silicon Valley consumer web companies that similarly have many millions of users, but don’t make so many millions of dollars. This is a trend we’ve been writing about for a number of months, most notably starting with widget-maker Slide’s $50 million round in December (announced in January) that valued it at $550 million. Some other web companies still pounding the street: Slide rival RockYou is also apparently working on a round, as is messaging service Twitter; meanwhile, social network Digg is still maybe going to sell for a couple hundred million. Of course, when it comes large amounts of web funding, Meebo is dwarfed by social network creator Ning’s recent $60 million round and the $430 million raised by Chinese social network Xiaonei.

Meebo has previously raised $12.5 million from Draper Fisher Jurvetson and Sequoia Capital.

Ever gone to eBay in search of something — an iPod, say — and had to comb through an endless array of half-literate, confusing and possibly inaccurate listings?

Or perhaps you’re a seller on eBay, and angry at its policies?

Either way, Wigix, the “Want it, got it Xchange,” hopes you’re annoyed enough to switch. The company, which launches today, offers an online marketplace modeled on stock exchanges, aimed at reducing inefficiences.

When an item is listed on Wigix, the seller won’t need to go through the task of describing it and posting pictures. Instead, they find the item in Wigix’s database, select it, and choose a price, with an eye to the average price.

Buyers, likewise, need only find the item they’re looking for through a single search on Wigix. Once they’re on the page for that item, they can see last prices it sold at, how many buyers and sellers there are, descriptions, reviews and more. If they want to buy it, they put in a bid price; when a seller meets the price, the transaction will be made.

The product pages are to be vetted by “category experts” who will take a tiny percentage of sales for their efforts, while sales fees have a set rate: Zero fees for items under $25, a fee of $1.50 each for the buyer and seller for items up to $100, a 2 percent fee to the seller for $100 - $1,000, and a one percent fee for every dollar over $1,000. Those prices are calculatedly much lower than eBay’s seller fees, and there is no listing fee at all, nor do listings expire.

As you buy items they’ll be automatically listed on your “portfolio”, or you can manually add those you already own. You’ll be able to see your portfolio change in price over time, just like a stock portfolio, and can choose to sell items anytime, or receive notifications of sudden price shifts (in case your dingy old pair of Converse suddenly acquire cult appeal).

The two founders that I met, former Charles Schwab traders James Chong and Bob Lee, have plenty of additional ideas for how to monetize and run the site — more than I can fit here. What’s perhaps more interesting is an anecdote they had to pass on about Tim Draper of Draper Fisher Jurvetson, which has $5.34 million invested in the company.

While I’d assumed a million eBay competitors must have been launched over the years, Lee said their initial pitch to DFJ for funding immediately got the attention of Draper, who said that out of the many thousands of pitches he’d received over the years, only three had been for competitors to eBay. Along with the investment, he joined the board of the company.

When I tried for myself to think of eBay competitors the only that immediately came to mind was Etsy, which has created a successful market for unique, hand-made items, many of which would have otherwise ended up on eBay. In a sense, what Wigix wants to do — become the marketplace for standard, mass-produced items — covers the other half of that equation. And yes, eBay irritates me enough to switch.

Wigix is based in San Francisco, and was founded in March 2007.

As the dot-com crash proved, the Internet doesn’t spell the end of the brick-and-mortar store. While shopping startups like Boo.com and Webvan went belly-up, the traditional mall continued to thrive, relatively untouched by the web phenomenon.

Getting data about the local mall on to the web is the point of NearbyNow, a search engine that tells us it has just raised a fresh $11.75 million round from Norwest Venture Partners and Draper Fisher Jurvetson. The company, now in its second year of existence, has gone from a single mall in its database in late 2006 to 202 malls today, and says it’s within range of half the population of the United States.

Instead of just searching within a geographical area, though, NearbyNow asks users to pick a specific mall. They then need to enter a search term, like “jeans”, with results showing for all the stores in the mall. The results can be narrowed by categories like “men’s apparel” or limited to specific stores.

While I was checking out NearbyNow, I decided to test out the company’s claim that it can tell you whether an item is available in a store within 10 minutes. It’s a simple process — just enter your desired size, color and quantity and either an email address or a mobile phone number.

True enough, I got a reply within about eight minutes on my first request. Unfortunately, the item I wanted wasn’t in stock, but it did offer a link to buy it online. A second request reported that there would be a delay before the store could check on the item, which ended up taking about 15 minutes more before I was told that item was also out of stock. Two failures would be enough to wear out the patience of many searchers — there’s some hard work to be done in keeping the site up to date with what’s actually in stores.

One the other hand, the engine provides a good way to look through the sorts of styles different stores carry. As readers pointed out in our first story about NearbyNow, the company’s challenge isn’t developing a useful product, but rather distinguishing itself amid the noise of competitors like Krillion and ShopLocal. None have yet captured the market.

NearbyNow is based in Los Altos, Calif. The company has raised $19.25 million to date, including a first round of capital from DFJ.

Richrelevance, a new San Francisco company offering personalized recommendations for online shopping businesses, has raised $4.2 million in a second round of financing.

The company joins a host of other companies — including Amazon, Aggregrate Knowledge and Wunderloop (see our coverage ) — that track what decisions you make while shopping online. Like these other companies, it then peers into its archives to find other users who have made similar decisions to you, so that it can recommend to you things that people with similar tastes have also bought.

We haven’t written about this company before. It has been secretive, raising a single round of financing last year from venture firms Draper Fisher Jurvetson, Draper Richards and angel investors.

The latest financing comes from Greylock Partners and Tugboat Ventures.

The company plans to make more of public splash in June.

Notably, the company’s chief executive, David Selinger, previously managed Amazon’s data mining and personalization R&D team, including its personalization engine. Amazon was a pathbreaker in personal recommendation area. Also, his most recent post was as at Overstock.com, where he led data mining. Overstock was an early customer of Aggregate Knowledge. So Selinger knows his competitors — Amazon, and Aggregate Knowledge - well.

The company says its product outperforms competing collaborative filter companies by using “more than fifteen recommendation types combined with transparent messaging, continuous optimization, and merchandiser controls.”

We’ll try to find out more on this company and see if see if it lives up to its hype.

When we talk about solar power projects, the cost is generally counted in the millions, not billions, of dollars. But a new deal between the California utility PG&E and a solar thermal company heralds the next age of renewable energy, when capital begins to flow in earnest.

BrightSource, which has signed a contract with PG&E to supply 900 megawatts of energy (enough to supply over half a million households), will require between $2 and $3 billion to build several plants in the Mojave Desert. It’s the biggest solar project planned to date.

To get the full 900MW, BrightSource will need to build five separate plants. The first, a 100MW facility, will be running by 2011, CEO John Woolard told the San Jose Mercury News. The remaining four 200MW plants will be built over the following five years.

Solar thermal, in a nutshell, uses fields of mirrors to concentrate lots of sunlight on a single point, usually to boil water that in turn drives turbines. Specific designs vary; BrightSource uses a central tower with a boiler chamber mounted on top. But like a race horse, it’s performance that matters, not appearance.

Among current technologies, BrightSource and its rivals — Ausra, Solel and some smaller players — offer the cheapest way to generate electricity from the sun’s rays, far outstripping solar cells. But their real competition is energy from every other source, including coal, nuclear and oil.

The rates at which PG&E agrees to buy electricity from renewable sources aren’t disclosed, but the utility will likely pay prices close to those on existing energy sources — and if PG&E got the upper hand at the bargaining table, it might even pay rates low enough to be competitive with coal, which could drive some solar thermal players out of business. To date, PG&E has also struck deals with Ausra for a 177MW plant, and with Solel for 553MW.

BrightSource is perhaps more familiar with the cost equations than any other company. In fact, it’s chaired by one of the few people in the world with decades of experience in large-scale solar thermal — Arnold Goldman, whose Luz International built nine plants in the 1980s. The plants still exist, but Luz is long gone. BrightSource, which has a subsidiary called Luz II, is its spiritual and technological successor.

While Luz I didn’t survive, its extinction can also be attributed to the return of cheap oil, a scenario we aren’t likely to see again. When oil prices dropped, California and the federal government saw less reason to subsidize oil alternatives. In 1990, the company even admitted that if goverment incentives dried up, it would need “a miracle” to survive.

Those miracles — peak oil and global warming — are here, even though they’ve arrived 18 years too late for Luz. Under those twin threats, BrightSource and other solar thermal companies will likely benefit from incentives and rebates until they definitively succeed (or fail) in their quest to provide cheap energy.

There are a few more rays of hope for BrightSource. According to the company, its current technology is almost twice as efficient at converting solar power to electricity as Luz’, and the cost per kilowatt-hour has dropped to 70 percent of what it was. It also switched from curved to flat mirrors, making production cheaper. And if it doesn’t survive with all those positives — well, at least the plants will keep operating.

BrightSource is based in Oakland, Calif., while its Luz II subsidiary is in Israel. It has taken less than $50 million in venture funding from Draper Fisher Jurvetson, the J.P. Morgan Bay Area Equity Fund and VantagePoint Venture Partners.

The funding round for Radar Networks that we briefly mentioned last week has been officially announced. It turns out that the company took $13 million more, and added Ross Levihnson, the former News Corp. exec and head of Myspace, to its board of directors.

We spoke with CEO Nova Spivack toward the end of the week, and he filled us in on a few more details. Twine, the semantic application aimed at collecting and organizing information for business professionals (more background here), has been in a limited beta with only a small group of users coming on since it was announced last October.

Early next month, Spivack plans to release a new version, and simultaneously open up further and let in some press (so we’ll finally have a full review of the site). Then, over the two months following, Twine should open fully.

However, Spivack says that the features new users will find on the site are only about 10 percent of what’s planned over the next year or two. Eventually, with the help of Levihnson, he hopes to make Twine an “on-ramp to the Web”.

What does that mean, exactly? We’ll have to wait to see the details, but the end result may look something like a combination RSS reader, wiki, and communication tool that keeps itself updated and organized.

The $13 million round was led by Levihnson and Baris Kardogan at Velocity Interactive Group. Previous investors Draper Fisher Jurvetson and Vulcan also participated. The company has taken $20 million to date, including its $5 million first round funding and $2 million of venture debt.

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.

updated

SugarCRM, an open source customer relationship management (CRM) software company, has raised $20 million more in financing, led by New Enterprise Associates, bringing its total funding to $46 million.

This is a hyper-competitive sector, and we’ve written about how SugarCRM shrewdly has teamed up with NEA, where partner Scott Sandell had a front-row seat in watching the moves of competitor Salesforce.com.

The company says it will use the funding to help expand to Europe and Asia, among other things.

Existing investors Draper Fisher Jurvetson and Walden International also joined the round. The question is, why did NEA lead the round, instead of let another investor come in to independently set the value of the company, as is customary? NEA has been aggressive in the past, and may have wanted the deal to itself. It has also shown a tendency to place high values on companies, and so it may have pushed the valuation on Sugar so high that no other investor wanted to pay the same price. We don’t know.

Since 2004, SugarCRM has seen more than 4 million downloads of its CRM products, it says, along with 470 product extensions, 75 language translations, and more than 60,000 community members. It says it has 12,000 registered developers and a customer base of nearly 3,000 commercial accounts. These are big numbers, though we haven’t confirmed how many of these users and accounts are active. The company just issued a release, so we’ll try to follow up and see how they are doing against an array of other competitors.

In December, the company announced the release of Sugar 5.0, with an Ajax email client, multiple homepages for users, on-demand architecture and a module builder feature for non-technical users.

We profiled SugarCRM back in 2005. Chief executive John Roberts is a good salesman. Question is, will this company now be able to break into the big leagues?

Box.net, a company that lets you store and access files online, said it raised $6 million more in a second round financing.

The round of financing comes at a crucial time for the company, because a host of tough competitors have emerged to make online storage de rigueur.

Google, for one, is about to launch GDrive, which let you store large files, like video, music, and images, and could come free like most of other Google products. Google already lets users have a few gigabyts of storage for free in GMail, its online email service. Gmail has been steadily increasing its storage capacity. PCs carrying Microsoft’s operating system often come pre-loaded now with Norton360 as a default option, a program that backs up all your files online. Not to mention the host of smaller competitors that focus more directly on online storage: Divshare (which is free ), MyFabrik (which recently raised $24.9 million), SoonR and a bunch of others.

Box.net has sought to differentiate itself by making it as easy as possible to use, however it still takes you through a number of steps that can trip up the novice. If you want to upload entire files of documents, it makes you use an applet, which didn’t work for me the first time around.

It offers a widget, so that you can store and access files directly from any Web page. The company is being quiet on its growth, refusing to disclose active user numbers. It merely quotes 1.4 “registered users,” but that includes people who no longer use it (like me, for example).

The funding was led by venture capital firm U.S. Venture Partners, and includes Draper Fisher Jurvetson, who led the company’s first round of $1.5 million a year ago . This year it will focus more on serving large companies, and offering collaboration tools.

Larry Roberts, credited for co-founding the Internet (as developer of the early ArpaNet), has raised $12 million more in financing for his latest networking company, Anagran.

Roberts is swinging for the fences again, saying he has devised a new “flow-based” networking to get around the limitations of today’s Internet packet technology — something he says is needed for today’s massive transmission of of video, voice and wireless communication.

Swinging for the fences is good, and let’s hope he scores this time. His previous company, Caspian, burned through $317 million in venture capital from firms like US Venture Partners and Oak Investment trying to do pursue the same “flow-based” networking model, before throwing in the towel.

Redwood City’s Anagran released its FR-1000 Flow Router last August, after three years of work. In a statement today, the company says the $12 million will be used to bolster its sales effort.

However, the statement raises questions. It didn’t list any new investors, saying only that its previous investors participated in the round — Argon Capital, ArrowPath Venture Capital and Draper Fisher Jurvetson, which had earlier given it $22 million (our coverage). Usually a company seeks to get a new outside investor to validate the company’s valuation and model, and the absence of an outside investor can suggest lack of confidence in the company. On the flip side, however, existing investors might be so excited about the company they may just want to hold it to themselves. We just don’t know. However, the company also listed no customers. Often funding announcements crow about customer added, but here again, we’re not certain what it means.

Ticketmaster, the large ticket seller, said it would buy entertainment event ticket reseller TicketsNow for $265 million.

Ticketmaster has long been the monster of ticket sales, but it has been greedy, charging high fees for its service, and now it is facing increasing competition. Even this deal raises new questions for the company.

Announcement is here.

TicketsNow is a Web-based site specializing in music, sports and other live entertainment event tickets. Ticketmaster joins eBay and others in going after the large and growing reseller market. EBay bought StubHub, another market leader for $310 million a year ago. Some founders of StubHub have since launched another site called Viagogo, now one of Europe’s leading secondary ticketing website. Another player is Razorgator, backed by venture firm Kleiner Perkins.

This looks like a big win for the TicketsNow investors, who pumped in $34 million beginning in mid-2006. Investors include Adams Street Partners, Draper Fisher Jurvetson, DFJ Portage Venture Partners and New World Ventures.

Ticketmaster, owned by Internet conglomerate IAC, said it will create an integrated platform on which fans will be able to review and compare ticket availability and pricing for both regular and resale categories. Ticketmaster said it will work closely with the NFL, NHL and NBA and venue, promoter, and other live entertainment clients to offer ticket validation and delivery in the resale market.

Launched in 1999 and based in Rolling Meadows, Illinois, TicketsNow says it works with more than 800 vetted professional ticket resellers.

There are growing challenges to Ticketmaster’s main business.

Ticketmaster’s largest client, concert promoter Live Nation, has announced it will stop doing business with Ticketmaster at the end of this year and to start a competing ticketing service. The WSJ, which has a story on the Ticketmaster-TicketsNow deal, notes:

The acquisition raises potentially thorny questions for Ticketmaster, which has previously sued brokers who use automated programs called “bots” to scoop up tickets faster than regular fans can, and then resell them for big profits on sites such as TicketsNow. TicketsNow Chief Executive Cheryl Rosner said her site currently doesn’t make any effort to keep tabs on how its 800 registered sellers acquire the tickets they sell. Moriarty said Ticketmaster would attempt to root out people who used technology unfairly, although he declined to give specifics.