VentureBeat

Jingle Networks, a provider of free telephone directory services, has raised $13 million in a third round of funding, according to VentureWire.

The service, called “1-800-FREE-411″, is pretty simple, and it’s completely automated: You dial a number, listen to an ad and then get the information you need. The Boston-based company has signed up around 150,000 advertisers.

When we covered Jingle back in 2006, the startup had just raised $30 million to build out its network — reaching a “critical mass” of between 10 million and 20 million monthly callers was key to attracting advertisers, chief executive George Garrick said. It looks like Jingle’s efforts were successful; it’s gone from around 13.5 million monthly calls (450,000 daily) to 20 million.

Investors include Goldman Sachs & Co., Hearst Corp., IDG Ventures, Liberty Associated Partners and Comcast Interactive Capital, and Jingle’s total funding to date is $70 million.

This is a crowded market, with lots of competitors offering similar free services, and Jingle competing against big players like Google, Microsoft and At&T. (We also hear that V-Enable has a big announcement coming tomorrow.) Google, for example, is better placed to deliver targeted ads, which is key to making ad-supported services pay off. If Jingle wants to take on companies of that scale, it will have to be innovative.

On the other hand, the startup must be doing something right already, because it reached profitability last month. I’m trying to reach Jingle’s investors to find out more about why the company has done so well, and how it will stay competitive in the future.

Happy Thanksgiving weekend, folks. Here’s a roundup of the latest.

The crisis at Digg — Digg, the San Francisco company that lets users rank news, is facing a credibility test. A fake story about Sony recalling its PlayStation 3 stayed on the site’s front-page for several hours, even though the content was clearly questionable — people blindly digged the article nonetheless. This led to some sleuthing by Niall Kennedy, who turned up evidence of some major spamming. This and other problems are causing some people to give up on the site.

How — or how not — to buy out your angels — We’ve written about Evan Williams’ move to buy back his struggling podcasting company, Odeo, back from his investors. The New York Times reports today he paid $2 million to do this. But since Charles River told VentureBeat it made money on the $4 million it originally invested in the Odeo, this suggests Williams must have additionally handed over more than $2 million in unused cash to the firm. Evan must indeed be a nice guy; arguably, based on the facts at hand, he could have just closed the company and moved on. Instead, he’s $2 million out-of-pocket. Maybe we’re missing something. VentureBeat was supposed to connect with Evan two week ago, but our schedules didn’t work out. Stay tuned…

Yergin says we’re not running out of oil — Pulitzer Prize-winning oil historian Daniel Yergin argues we won’t begin running of oil until 2030, later than a lot of experts have been saying lately.

Has Silicon Valley’s luck moved south? — The Persian rug merchants in Palo Alto own various properties, including a venture fund called Amidzad, and lots of real estate in Palo Alto including the supposed lucky spot at 165 University (early home of Google, PayPal, etc). They say that luck may be moving south. Earlier this year, led by Saeed Amidi (pictured here), they opened a 150,000 square foot building in Sunnyvale to house start-ups, called Plug & Play Tech Center. Already three of the newcomers have been acquired by other companies. In just the past couple of weeks, Bix was acquired by Yahoo, Nsite by Business Objects (though, if you believe the comments, the exit may not have been that great), and Andale by Vendio. Other companies at the complex are getting funded: Solexant just raised an angel round for its new solar cell technology. Meanwhile, 165 Univ. hasn’t been too lucky lately.

Mobio offers movie service — Mobio is a relatively new mobile phone service that provides movie listings, reviews, maps and the ability to buy tickets easily from your phone. We mentioned the company earlier this year, when it was still secretive. It has raised $9 million from Interwest Partners, Storm Ventures and others. You load it from the company’s site, at www.getmobio.com, but it only works for the RAZR and some Samsung phones.

HAVA, better than the SlingBox? — The makers of the HAVA say it lets you stream your TV programming to any PC, wherever you are. And it says it does the popular SlingBox one better. It is compatible with Windows XP Media Center Edition, works with WiFi (SlingBox is Ethernet only), and allows multi-casting (multiple PCs can view the stream at the same time, compared to SlingBox, which allows only a single viewer).

The company let us demo it, and we liked the quality. It is selling for $249. We first saw a review of HAVA at CNET. It is made by a private company we haven’t written about before, Monsoon MultiMedia, with R&D in India, but marketing and sales in San Mateo.

Roundup in Silicon Valley:

FON exploits opportunity to stir up WiFi interest in San Francisco — Search engine company Google is having a heck of a time getting “crazy nut job” local SF residents to agree to its plans for a city-wide WiFi project. So while big Google is stymied, another company, FON, is hoping to slip under the regulatory radar with a grassroots campaign: Offering hundreds of its La Fonera wireless routers at an event it calls “Freedom Friday,” to be held at SF’s Union Square from Noon to 2 p.m. tomorrow. FON’s been having its own challenges drumming up interest in its product, so perhaps this will create some viral buzz? As mentioned, Google is an investor in FON.

Williams buys back podcasting company Odeo — As mentioned elsewhere, Evan Williams, who started San Francisco podcasting site Odeo after selling his blog software, Blogger, to Google, has parted ways with his his venture capitalists.

You knew things were choppy at Odeo when Williams suddenly started giving candid assessments last month about having tried too much too quickly with Odeo. He then shut down Odeo’s Audioblogger, which had let users post audio to a blogger.com blog via a telephone call.

Now we find out he’s bought Odeo from his venture capitalist backers, and renamed it Obvious. Though, from his comments on the site (”We’re not sure how it’s all going to work”), it isn’t entirely obvious. Included in the assets is Twitter, another service we’ve mentioned before — which lets friends know what you’re doing. He says it is “going to be huge.”

George Zachary, the venture capitalist at Charles River Ventures who had invested in Odeo, tells us he actually made money on the deal.

Which reminds us, Zachary has launched a blog — Perhaps the Odeo story is what made investor Zachary decide to launch his own blog, called Sense and Cents. He tells VentureBeat his goal for the blog is to navigate the core of “who we are as humans and what we need.” He notes how technology advances in communications are letting us do things we’ve never done before. He says he wants to “talk about and connect interesting sociological issues and how they integrate and show themselves with technology and experiences of consumer internet.”

Wonder if he’ll try his hand at podcasting? ;)

Are there enough shopping search engines? — Ok folks, we’ve got at least a dozen shopping search engines now, of every stripe and flavor. We just wrote about TheFind.com last night, and now we see yet another one launching: Ugenie. GigaOm has a write up. It has an office in Silicon Valley, among other places, and was founded last May by two Amazon.com alums. It has raised $5 million in funding from BlueRun Ventures and Sierra Ventures and now has 15 employees, but it is not clear what new it is bringing to the table.

Revenge of the server farms — After disappearing after the first Internet bubble burst, the server farms are back. The NYT has the story: Equinix of Foster City, Calif., is building its first new center in Chicago for $165 million and expects to open it late next year. When it opens, the server farm will be 95 percent occupied and demand 30 megawatts of power, enough electricity to power 30,000 houses.

Check out Palm’s colorful new Treo 680 — They’re getting thinner too. See image here at left.

Six Apart launches Vox, another blogging tool — Sigh, do we need another blogging software? The answer is no. But if you’re someone who has been on the sidelines, a non-techie fearful of taking the blogging plunge, this one is worth a good look. The first generation of blog software was clunky, but this latest, called Vox, has a easy and good looking finish to it. It is latest software from company Six Apart, and is free. We created this blog in three minutes, no more.

Oracle kills RedHat — Oracle introduced its open-source Linux operating system (see our wire story from this morning), and the market killed RedHat today. It lost a quarter of its value in trading. Despite the likely dire consequences for RedHat, some people are skeptical that it will help Oracle, though:

I really don’t see why anyone would pay $50,000 per CPU for a license to use a tarted-up version of Oracle Fusion Middleware when so many clever subversives on the edges of organizations are already doing all these cool Web 2.0 things now for pennies a month and there are so many really sensational, and far less expensive, enterprise-level integration solutions available or in the works.

eBuddy raises 5 million euros — See the story here on VentureBeat’s wire, from earlier today. (Another reminder to subscribe separately to our news wire, which is the RSS button on the left of homepage, if you haven’t done so already).

(Updated below with comments from chief executive George Garrick)

Jingle Networks, a Menlo Park start-up which provides free phone directory assistance, has raised a whopping $30 million more in venture capital — upping the ante in what is now a crowded field.

This area has become popular because people find this an easy way to avoid the $1 to $3 they get charged using regular DA service.

Jingle, which markets itself as 1-800-Free-411, supports the free service by injecting advertising snippets in it responses. If you call them at 1-800-Free-411 looking for a particular local pizza company, for example, you may be offered a voice ad from a competing pizza company.

Competitors (see our early stories here and here), include San Diego’s 800ideas.com, which provides different 800 numbers depending on the city you are in, and Palo Alto’s 1-800-411-Save. (Update: InFreeDA, a San Francisco start-up that went live earlier this year with 1-800-411-METRO, has effectively closed shop. Thought he company told us in August it hadn’t closed down — and was just doing a major restructuring — we just tried using it, and got an “all circuits are busy” message, twice.)

The venture round is significant because it brings the company’s total funding up to about $30M over the past year (it got $26 million in April, and $5 million in December, three months after launching).

This latest third round was led by Goldman, Sachs & Co. and Hearst Corporation. Previous investors Comcast Interactive Capital, First Round Capital, IDG Ventures Boston and Liberty Associated Partners also participated.

Jingle says it now enjoys three percent of DA calls in the U.S., accounting for more than 13 million inquiries from more than four million consumers each month.

Among its advertising customers are CBS, which promoted its fall lineup with audio spots in the DA responses, and 1-800-flowers.com and 1-800-Mattress.

Chief executive George Garrick told VentureWire in a story (sub required) this morning that the company’s post-money valuation was “about $150 million.”

[Update: We just got off the phone with George Garrick, who confirmed the valuation was "slightly higher" than $150M. The large amount of cash is needed, he said, to build out the service. Advertisers come later, because they don't take a company seriously unless it can show five to ten million calls a month, he said. And he says Jingle has hit the tipping point, with about 450,000 calls daily. He expects revenue of between $1 and $5 million this year -- he wouldn't specify further -- and "ten times" that next year, he said. He said Jingle is the clear leader in free DA service, in part because of its more recognizable number. InFreeda has shut down, in part because of its less memorable name, he added. Palo Alto's 1-800-411-Save, meanwhile, is only placing between 5,000 and 10,000 calls a day, he said. We've reached out 1-800-411-Save for comment. No one else has raised close to this $30M, he pointed out. His real fear (he corrects; he did not say he feared them) assumption is that the carriers will unveil an ad-supported free DA service, he said.]

Catching up:

YouTube is making $7.5 million a month –Everyone has been guessing whether YouTube is profitable, given the high costs it faces hosting all its videos. This guy says YouTube is doing $7.5 million a month in ads, and is profitable.

FON, the company that wants to encourage people to share their WiFi routers, having problems? — The general manager of US division has left. We’re beginning to think this Fon idea my be too clunky to fly. You buy a router to let other people use it, and it lets you tap into other peoples’ FON routers when you travel. It is a chicken and egg problem; Why buy it, unless you know lots of others have bought it too? Problem is, there are so many ways to get online these days. For starters, FON’s own backer, Google, is building out free networks. Google is using a WiFi router built by Mountain View’s Meraki.

Filmloop to launch online version — Filmloop, which let people create slideshows on their desktops and then have friends see updated versions automatically on their own computers, has created an online (browser) version too. It’s facing plenty of competition, but says more than 1 million users have uploaded 42 million photos.

Time for these podcasting services to make money — Evan Williams, of podcasting start-up Odeo, is making some public confessions about having trouble, and he is shutting Audioblogger, which allowed you to post on your blog via a telephone call. (Details here.) So eyes have turned to how these companies can make money. PodZinger, an audio and video search engine of Cambridge, Mass., has just launched a way for podcasters to insert advertising in both audio and video files. It says it has “content classification” technology which allows it to match ads to the podcaster’s content. It also says it has algorithms for analyzing a user’s “intent” and provides ad matches that way. The content creators, or podcasters, can decide whether or not they want the service, which can bring them extra revenue — which they share with PodZinger.

Ning’s video & photo move — The Silicon Valley start-up Ning, backed in part by Netscape founder Marc Andreessen, gives you multiple tools you build your own web site, as we’ve mentioned. Now it has released more stuff, including letting you customize your own niche, YouTube-like video site, or Flickr-like photo site. The company took us through a demo last week, and it’s easy to use. The video site gives your own embedded player that you can brand as your own, which you can place in your blog or at MySpace — but which runs on Ning’s servers, and so you aren’t paying hosting costs. Ning bets it can cover the costs by taking a share of the advertising revenue. It says its advertising is lucrative compared to some other sites, because its users are creating content-focused sites, and so can be targeted by advertisers appropriately. The ads are generating $2 or more per 1,000 page views, the company said.

Rebtel raises $20 million for (complicated) online calls — Like Jajah, this Stokholm company (co-founder Greg Spector is here in Redwood City office, though) Rebtel lets you make calls cheaply by accessing its own system of low-cost Internet lines. But it gets complicated. It works when you dial a local number it has assigned for the person you are calling (yep, a different number than the one you already have for him or her). Once you call the other person, they have to hang up, and call you back. There’s logic to it: The system is trying to find the cheapest combination of Internet and local lines. It has raised $20 million in venture capital, including from Benchmark and Index. They charge $1 a week, and calls are otherwise free. We’re seeing a lot of these cheaply built phone services emerging; they’ll appeal to the frugal phone user, but not to those of us who want simplicity. (More here).

Asides:

Speaking of ads, there’s not enough place online to host them all — Here’s news that 100 million people watched online videos in July, and evidence that advertisers can’t find enough online inventory to put their ads.

New VC podcast — Levensohn Venture Partners, a venture firm in SF has started a podcast series called VC — Inside Out.

Bono’s direct connection with Apple, gone — Apple said Fred Anderson, who served as the company’s chief financial officer from 1996 until 2004, resigned from the board, because of the option scandal. Anderson remains a partner at the Silicon Valley buyout firm Elevation Partners, which as you’ll remember is where U2’s Bono hangs out, and who promoted the U2 iPod.

Google executive, Marissa Mayer, shows how to hold meetings efficiently — Meetings can be a waste of time. What if your company had the same discipline as Marrisa? You’d get a lot more done. This shows the Google trait of schizophrenia — creativity and discipline in one.

Google has a bunch of new products — No wonder Google co-founder Sergey Brin recently burst out, criticizing his developers for releasing too many products, and not focusing on making them work well. Here’s a recap of last week’s bombardment alone. One lets you restrict the sites you are searching (details here). Next, here’s the latest on the Google gadgets you can put on your Web site (choose from 1,200 of them). Google has also launched an experimental site, called Searchmash, tracking behavior of users off its main site. There’s a new initiative to allow you to build Web apps on top of Google search, whereby Google has opened its APIs to allow an AJAX search box for videos (click on one of the videos to see), for example. Finally, Google launched Code Search, a way to search for source code from around the Web.

Yahoo’s flip-flop– Yahoo has donated $1 million to Stanford University’s John S. Knight Fellowships for Professional Journalists, seven months after handing over information about a professional journalist to Chinese authorities. You may view it cynically, but this is a good move, nevertheless — it is earmarked to support journalists from countries where there are restrictions on freedom of the press.

Podshow, a company that promotes podcasts and finds sponsors for them, has raised $15 million more in a second round of venture capital from its big-name investors, following up on $8.85 million in a first round last summer.

Dan Primack has the scoop.

This is, frankly, surprising, because the business model still hasn’t been proven for this medium. This is a lot of money. There are other players out there, too, like Odeo (funding from Charles River & others) and Podtech (raised $5.5M from USVP & Venrock).

But then a number of investors see a land-grab going on here, an effort to be the primary destination where thousands of individual musicians and other content producers will come to provide their wares, and where millions of listeners will want to download them. We just saw Digg founders launch Revision3 to go for this market in the video area. And like Podtech, Podshow is working with bigger companies — in PodShow’s case, mainstream media companies — to help them produce and distribute podcasts. PodShow is also buying up other podcasting companies, so the cash could be meant for buying up more sites to become the biggest player. Its programming is extensive.

Still, we agree with Dan’s skepticism, as the whole premise of the Revision guys (they raised only $1M, see link above) is that it really cheap to launch these sorts of services. According to Dan:

I just struggle to see venture-type [return on investment] for most of these deals, unless they can be flipped before Yahoo, Google, etc. put down their tall glasses of content Kool-Aid. This isn’t to say that the podcasting market is inherently unprofitable, because it isn’t. VC-backed companies, however, are supposed to produce something a bit more exciting than respectable margins.

Some VCs agree with me, but it is clear that many others do not. Case in point is PodShow inc., which recently raised $15 million in Series B funding. This follows up on an $8.85 million Series A deal from last summer, from Kleiner Perkins, Sequoia Capital, Ram Shiram and Jerry Newman. All four are back this time around, but an undisclosed lead came aboard at a major pre-money valuation step-up.