VentureBeat

Here’s the latest action:

Facebook suspends RockYou’s Super Wall – The social networking site has turned off the Facebook application’s viral aspects, like invitations and notifications, presumably as part of its efforts to crack down on spammy app activity. RockYou chief executive Lance Tokuda says he’s working with Facebook to get the suspended features restored soon. The move follows the shutdown of RockYou competitor Slide’s Top Friends application at the end of June due to a security issue. (Top Friends is back up now.)

Vinod Khosla joins Obama — The famed venture capitalist spread his bets during the primary season, giving the maximum amount to Hillary Clinton, John McCain and Barack Obama. But now he has taken sides, in a way, by joining Obama’s India Policy team. The alliance makes even more sense because Khosla has been a big booster of biofuels like ethanol, and the Obama campaign is closely linked to ethanol, at least financially.

VeriSign brings back Jim Bidzos as interim chief executive –  Bidzos, who was the company’s founder and first chief executive back in 1995, is replacing William A. Roper, who resigned early last week. VeriSign manages the .com and .net domains, and Roper had been working to pare the company back down to its core focus. As for why Roper left, Bidzos says, “I don’t think it was fair to have him around while we were looking for a replacement, so he chose to leave.”

Leapfrog launches its web-based portable gaming system — With the Didj, educational gaming company Leapfrog is targeting 6- to 10-year-olds, the demographic that has embraced the Nintendo DS game system.

Vodafone buys a controlling stake in Ghana Telecom — Vodafone is buying a 70 percent stake from the local government for $900 million. The mobile network company says Ghana is one of the most attractive markets in Africa, because of its young population and low mobile penetration.

Privacy advocates like Google’s new privacy link — Google’s privacy policy hasn’t changed, but the search giant is linking to it from its main page. A number of privacy groups praised Google’s decision, albeit rather faintly. For example, Pam Dixon of the World Privacy Forum called privacy policies an “important tool” and noted that displaying such policies is standard practice among most Web sites. In other words, everyone’s glad Google made the move, but the company probably shouldn’t spend too much time patting itself on the back.

Study shows airports are a prime hunting ground for laptop thieves — Apparently, more than 10,000 laptops are reported lost each week at the United States’ 36 largest airports, and 65 percent of those are not reclaimed. In fact, VentureBeat’s own Eric Eldon had his laptop stolen at SFO earlier this year.

Sequoia Capital makes three more hires — The additions include Warren Hogarth, who will focus on cleantech; Christopher Lyle, who will focus on public market investments; and Michael Dixon, who will focus on systems and software investments. Meanwhile, David Su, one of the founding partners of Kleiner Perkins‘ China Fund, has left the venture firm for reasons unknown.

PlyMedia raises $6 million for video layers — The company, which adds interactive layers such as speech bubbles to online video, has raised $6 million from Greylock and Elron Electronic Industries, according to TechCrunch’s sources. Other interesting companies in this space include ad company Veeple and commenting company Omnisio.

Lifestream.fm relaunches with new features and German support — The lifestreaming site was acquired by the social bookmarking company Mister Wong back in April, and now it’s relaunching in invite-only mode with new support for comments, filtering, more comprehensive searches and German.

Revision3, a San Francisco company creating high-quality video shows on niche topics, has raised $8 million more from investors.

Like several other companies, including Podtech (see our coverage) and Next New Networks (our coverage), its seeks to exploit the trend toward niche video viewing. Revision3’s own slant has been toward serial content, with regular hosts of shows lasting between 20 minutes and an hour. They include the geek show “Diggnation,” and cooking show “Ctrl-Alt-Chicken.” The idea is that loyal viewers subscribe to the shows and download them for regular viewing via TiVo or on mobile devices such as their iPod.

The question remains whether Revision3 can launch other shows that are as popular as Diggnation– especially at a time when so many other companies are producing video content now.

The company, started by the co-founders of news ranking site Digg, raised $1 million last year (see VentureBeat’s coverage). The latest funding matches the $8 million funding that Next New Network got several months ago.

The dough comes from previous backer Greylock, and several of the angel investors, chief executive Jay Adelson told VentureBeat. He said the company’s value jumped significantly. David Sze and James Slavet, of Greylock have joined the board. Greylock is also a backer of Digg.

Adelson said two of the company’s ten shows in production are now profitable. The experience has provided the company with enough evidence that the overall business model will work, he says. The shows make money through sponsorships, with their hosts taking break periodic breaks from programming to discuss sponsors in a conversational way. Sponsors include GoDaddy, Sony, Microsoft and Verizon. The company as a whole is not yet profitable, but he said the funding is enough to help the company get there. Viewers are downloading two million shows a month. The majority are RSS subscribers, downloading shows and watching them via iTunes, for example. The company hopes to distinguish itself by producing high-definition, professional quality shows.

The fast growing social network Facebook confirmed today that it has raised more than $37 million in venture capital to date (something already known), but that it did not do so under duress.

The company was responding to a Times of London story that suggested Facebook was desperately in need of more servers last year to manage its growth, and that it was forced to sell a ten percent stake to Greylock Partners — in order to get cash. Greylock partner David Sze, a board member told VentureBeat the firm does not own ten percent, and that the firm’s investment last year did not come because of a need for servers. When asked what parts to the Times report were inaccurate, he said “all of it,” calling the paper’s reporting “amazing.”

He continued: “A site like Facebook is always adding servers to support its growth. But there certainly was no panic reaction to run for funding as the article implies. I wish there had been! It would have made my life easier in doing the deal!”

We covered Greylock’s investment last year. Before Greylock’s lead of that $25 million round, Facebook had raised $12.7 million in a round led by Accel Partners.

Going forward, we’ll try to avoid dispelling erroneous reports by other publications. This one seemed particularly nasty, however, calling Facebook’s server problem a “major stuff up,” citing two anonymous sources. It is relevant only in that Facebook continues to face challenges keeping up with demand from outside developers to access its platform.

Updated

Apple TV is a hit — According to early accounts, at least.

YouTube killer? — [Update: This has been confirmed.] Rumors have existed for some time about collusion among the big-media players to challenge YouTube, the king of video sharing. Now the LA Times reports that News Corp. and NBC Universal plan to announce as soon as today that they’re building an online video site “stocked with TV shows and movies, plus clips that users can modify and share with friends.” Not clear how MySpace fits into this.

More on Google’s Pay-Per-Action — We mentioned Google’s PPA announcement Tuesday. However, we didn’t point specifically to the “text link format” ad unit, which some say crosses an ethical line, because it can be considered a pay-per-post. Mike at Techcrunch has a good review. More about the general PPA program at the Mercury News.

Wink sees management buyback — Wink, a start-up that began as a search engine for tags, has revised its business plan, and wants to be a search engine for people. However, some investors balked at this turn, and so Wink’s management has bought back shares from some of the investors — though the exact amount wasn’t specified. Lead investor Greylock has reduced its stake, though remains the largest shareholder, the company confirmed with VentureBeat today. Wink had raised $7 million.

Oil behind the Doerr — PEHub writes more on the ties between well-known venture capitalist John Doerr and oil, noting that Doerr and his wife Ann wrote a $1,000 check this year to Ted Stevens, the Republican senator from Alaska who has repeatedly tried to approve oil drilling in Alaska’s Artic National Wildlife Refuge. Again, this seems to fly in the face of Doerr’s leadership in supporting green policy in Washington and boosting investments in alternative energy. Doerr did not respond to a request for comment yesterday. [Update: To be fair, its entirely possible Doerr wrote the check to help get Stevens' ear, in a shrewd effort to push green policy, but we just don't know...]

Yahoo releases latest widgets for your desktop — They’re designed to use less memory. Here’s a tour.

Other:
–In our Newswire: Amp’d Mobile has raised a whopping round, and reportedly has 200,000 subscribers.
–For those of you relying on our RSS feed, we’ve been making changes, and you may have missed the piece by Stu Phillips, about ruthless scrapers of content, and how publishers need to join ‘em, since they can’t beat ‘em. Michael Cerda, meanwhile, writes a piece about the new wave called “Phone 2.0.”

San Francisco news ranking start-up Digg has become a symbol of new-age Internet buzz, ever since its hyped cover story on BusinessWeek several weeks ago.

Now TechCrunch reports Digg has been in recent acquisition discussions with a number of companies, including News Corp. — with a price of $150 million being discussed.

Rumors abound of a possible sale. BusinessWeek cited sources saying Digg was worth $200 million, but that value was so out of whack with Digg’s revenue and usership base that it was hard to find credible. That, combined with the article’s other errors (partly documented in the comments), put the whole story into question. See this Red Herring piece, which suggests that based on a both user numbers and rules of thumb concerning value as related to revenue, the $200 million number is way too high, when compared to the MySpace acquisition.

Or was it? This is where we get into the game of unreliable statistics, and it gets extremely frustrating. If we don’t get more standards on stats, the industry will suffer.

Techcrunch caught word of early Google talks with YouTube, but it has caught word of other rumors that haven’t panned out. More notable, though, is its reference to the unreliability of traffic statistics. Specifically, it suggests Digg’s claim to have 20 million unique monthly visitors has created a bone of contention in the acquisition talks. Comscore shows Digg has only 1.3M uniques. As a result, the article suggests, Digg wasn’t able to get its bottom line demand of $150 million. Instead, the article concludes, Digg may decide to raise $5 million + from its backers, possibly Greylock Partners.

Now, when Google bought YouTube for $1.6 billion, it was such a huge bet on the future of video that accuracy of statistics for YouTube usership may not have played a big role. Everyone knows YouTube is the biggest, and even if your measurement is one or two degrees off, you are going to do a deal based on basic hunches and not on whether video traffic today is at 30 or 35 percent market share.

But then there’s the other thing you can do, if you are really interested in buying a company — and it’s presumbably what News Corp and others did with Digg. You take a look at the targeted company’s own server statistics — which the company will surely show you if you are serious about buying them. Yet even these statistics are being thrown into doubt. Take a look at this recent piece by BusinessWeek, written by one of the authors of the original Digg story, about how unreliable statistics are. It tells the story of Seth Sternberg, chief executive of online IM site, Meebo, offering Comscore access to his internal statistics and trying to convince Comscore that its estimates for Meebo’s traffic are too low — to no avail.

Techcrunch says Comscore’s data are notoriously unreliable. Singling them out is a little unfair. Comscore may be off, but everyone else is off too. And the reason Comscore has become more credible for some people is because it is more conservative. It doesn’t count any of the junk page views, such as ad pop-up ads, that a server may count, for example. Indeed, more advertisers are requesting Comscore data for this reason. And thus a game begins to get played. Advertisers like Comscore because they can pay less to sites if the data shows less traffic.

In other words, this statistics problem has become big. We’ve written about it before.

By the way, we checked with Digg about this latest acquisition rumor, and here’s Kevin Rose’s response, as sent through a spokesman:

After the YouTube buyout there have been so many rumors and speculation about the future of Digg that we’ve made the decision as a company to not respond to any of them. As always, we’re focused on execution and cranking out future versions of digg — you can expect many cool new features coming very soon.

Also, here’s more background on the valuation discussion, from Red Herring article:

To look at this another way, the $200-million valuation is roughly 66 times current revenue. Put in context, when News Corp. paid $580 million for Intermix, the parent company of MySpace, the offer was seven times company revenues—and News Corp.’s offer was called stratospheric at that time.

Users can be another benchmark of a company’s value. At the time of the News Corp. acquisition, MySpace parent Intermix had 27 million unique users, valuing the purchase at $21 per user.

By that measure, if Digg were acquired for $200 million with 1.35 million unique visitors, according to comScore Media Metrix’ traffic estimates, it would be valued at $148 per user.