VentureBeat

With over 30 million monthly unique users, Digg is a juggernaut of a site. Despite perpetual rumors of an imminent acquisition by major players like Google or Microsoft, the social voting site is now gearing up for a major expansion on its own. And it’s just secured a big round of funding to make that expansion possible.

Interestingly, almost half of Digg’s users are outside of the U.S. now, the service claims on its blog. So one of the big pushes for an expansion of the site into 2009 will be an emphasis on local — both in tastes and languages, something that I’ve noted in the past would likely be a good idea. Mixx, a Digg competitor, had placed an emphasis on local news early on, but that site still has nowhere near the traction of Digg.

When asked about what specific areas of the world the company may target first with its expansion plans, Digg would only say that it hasn’t announce a roll-out plan yet.

Other efforts in Digg’s expansion include improving its recently launched recommendation system — which a couple months in seems to be working pretty well. This will coincide with more efforts to make it easier to discover and organize the huge amount of data that Digg amasses on any given day.

Expanding community outreach programs and working on new tools for publishers are two other areas Digg says it will focus on.

Naturally, to handle all of this new work, the company is also hiring. It will also be moving into a larger office in the San Francisco, Calif. area next year.

Digg’s new $28.7 million round was led by Highland Capital Partners. Existing backers Greylock Partners, Silicon Valley Bank and the Omidyar Network also participated, according to The New York Times’ Bits blog. Digg has raised a total of $40 million now in three rounds.

While Digg declined to comment on where this latest round puts its valuation, one thing is for certain: If a big player is still looking to buy Digg, the price just went up. Digg seems content to go it alone for the foreseeable future.

[photo: flickr/ericskiff]

Here’s the latest action:

Scrabulous returns as Wordscraper — The popular Facebook application was redesigned and relaunched less than 48 hours after it was taken down due to a potential legal tussle with Scrabble-maker Hasbro.

Dell tests digital music player — The computer maker stopped selling players in 2006 due to disappointing sales, but it has a new offering that could go on sale as early as September.

Job site Monster acquires search company Trovix for $72.5 million in cash — Monster says the acquisition should help it deliver more relevant search results for employers and job seekers. The Mountain View, Calif., Trovix, had raised $18.25 million in funding from 3i Group, Granite Ventures and U.S. Venture Partners.

Forrester Research buys Jupiter Research for $23M — Forrester plans to incorporate Jupiter’s team into its marketing and strategy division.

FBI warns of new Storm worm — The Storm worm is a dangerous botnet, so if you get an email entitled “FBI vs. Facebook,” don’t click on the link.

Mobile-chip maker ARM’s new licensee likely to be Apple — Apple’s acquisition of PA Semi earlier this year makes the deal seem more likely. As an ARM licensee, Apple would be able to tinker with ARM’s architecture and processor cores.

Intel working on third-generation Classmate PC — The latest version of the low-cost laptop, which is aimed at schoolchildren, could be available next month.

Omidyar Network backs nonprofit Endeavor – The VC firm from eBay founded Pierre Omidyar has committed up to $10 million to Endeavor, an organization that supports entrepreneurs focused on emerging markets

Activision Blizzard lets go of Bourne game license – The newly-merged game company dumped the license just a month after the release of the first game based on the popular film franchise.

Are communication companies the new OPEC? — The answer is yes, argues Columbia Prof. Tim Wu, because bandwidth is becoming a precious commodity.

Facebook chooses Intel servers – The Xeon 5400 processor-based servers will cover the social networking site’s hardware and software needs.

Leading broadband provider offering stake to Western investors — International cable operator Liberty is one of the contenders for a 20 to 25 percent stake in Akado.

Are blogs to blame for Cuil backlash? — The harsh reaction was caused in large part by the tech media’s over-the-top hype of the search engine’s launch, Sarah Lacy says. She makes a strong case, but loses points for not including a Cuil-related pun her headline. (The company’s name is pronounced “cool,” so the comic possibilities are endless.)

China to limit web access during the Olympic games — Apparently, the ability to access an uncensored version of the Internet wasn’t included in China’s promises to allow the foreign news media to “report freely” on the games.

YouTube’s Steve Grove weighs-in on voice-to-text –Grove offers some interesting examples of how metadata has always been important on Youtube, once you get past his explanation of YouTube’s new text-search feature for political videos (which was already announced).

Updated

Seesmic, a startup that lets users post short video comments and snippets, has raised $6 million in a second round of funding. The new round was led by Omidyar Network, the firm created by eBay founder Pierre Omidyar, and Wellington Partners.

The San Francisco company has been dubbed the “Twitter of video” — through its platform, users can easily record and post short video segments to their blogs, social networks or to the Seesmic site itself. You can also post video comments on blogs (like VentureBeat) whose discussions are powered by Disqus.

We’ve been a bit skeptical about whether this will take off, because it’s not clear that videos are as effective and easy a way to communicate quick thoughts as, say, a one-line text comment on a blog or a short post on Twitter. In comment threads, if people aren’t willing to take the time to watch your video, a commenter can become cut out of the conversation. I haven’t seen a lot of use in VentureBeat’s comments either, although that may be because we haven’t done much to promote it.

Seesmic says the platform provides video to 1,500 sites and blogs.

The company also just released a promising new feature — an embeddable video that can include threaded comments. That means an entire conversational thread can be viewed by playing a single video. This idea has some problems too, because sites may not want to see too many user comments disappearing into one video. But at least Seesmic is trying out different ways to make the commenting process more organic.

The new round brings Seesmic’s total funding to $12 million.

Update: Seesmic founder Loic Le Meur offers his account of how the deal fell into place here. I love the fact that after Seesmic’s first round, Omidyar wrote a comment on Twitter asking, “How come I didn’t get to invest?”

Update 2: To help counter some of our skepticism, Seesmic has sent along some other numbers to show their traction: The site gets 120,000 unique visitors per month, 69,000 video posts per month and around 3,600 new users.

The IGNIA Fund has raised $20.6 million that it plans to invest in companies targeting Latin America’s poorest residents. The round was led by Omidyar Network, the philanthropic investment group created by eBay founder Pierre Omidyar. IGNIA’s financing is already larger than the $17 million that Omidyar Network helped raise for a similar fund in India, and it plans to raise more — $50 to $75 million in all, starting with a second round this summer.

Co-founder and managing partner Alvaro Rodriguez Arregui has plenty of experience with both microfinancing (namely, trying to improve a country’s economy by lending to small businesses) and bigger corporations; he is the chairman of the microfinance group ACCION International, but has also worked as the chief executive of Farmacias Benavides, supposedly the biggest drugstore chain in Latin America. IGNIA is the first social venture fund targeting this region, and it will take microfinancing to the next level, Arregui says.

“The best way to reach scale is through commercial means,” he says. “[Profitable] returns are a means to an end.”

The idea is to invest in commercially-promising companies that will serve what IGNIA calls “the bottom of the pyramid” (i.e., Latin America’s low-income population), and, therefore, improve the lives of that population while making money. The fund will invest between $2 million and $10 million in its portfolio companies, with initial investments as low as $500,000.

IGNIA says it will initially focus on companies in Mexico (where the fund is based), with investments in health care, education, housing, nutrition and basic utilities. Arregui says he can’t get any more specific until the fund announces its first investments.

IGNIA should attract both do-gooder investors and those looking for a financial payoff, he adds. Bringing on backers with different goals seems like a risky mix, but I’m definitely rooting for the fund to succeed. And at least it’s kicking off at a time when Latin America is becoming more hospitable to venture investment.

Google.org, the Omidyar Network and the Soros Economic Development Fund are creating a $17 million investment company that will provide capital to small and medium-sized businesses in India.

Microfinance lending schemes, or those that give money to small, traditional businesses, have been active in India for years, while venture firms and other investors have been pumping millions into Indian technology startups and later stage established companies. This fund is intended to bridge the gap between personal lending and larger business investments.

The fund wants to help businesses grow enough so that they decide to take “commercial capital,” the organizations said in a joint press release. “With this investment, we will meet the huge demand to serve smaller businesses in India that have little access to finance,” says Neal DeLaurentis, Vice President of Soros Economic Development Fund.

In this country of well over a billion people, $17 million can hardly meet the demand of every quality small to medium-sized business that needs a little capita.

Separately, see bottom for a very good report (click on image to download) from Arun Natarajan’s group, Venture Intelligence, on the state of investments in Indian economic infrastructure, which says private equity firms invested Rs. 130 billion last year in the country’s core infrastructure, but that the country actually needs about Rs 1,900 billion ($475 billion) over five years.

Here’s a look at some recent VentureBeat stories about what “commercial capital” has been up to in India:

Venture Capital: Inventus Capital Partners, a Silicon Valley based venture firm started by well-known Indian entrepreneur Kanwal Rekhi, raised $44.2 million last month for a first fund targeted to eventually total between $125 million and $150 million. It initially aimed for $150 million to $175 million, but prospective limited partners thought that was too much for a first-time fund looking to make initial investments of $2 million (our coverage).

Cleantech: Clean energy storage company Deeya raised $15 million last month (our coverage); the company is based in Fremont, Calif. and Guragon, India.

Life Sciences: MPM Capital, a VC firm that focuses on health care investment, recently said it plans to make a number of investments in Indian life sciences companies to the tune of around $20 million each. “India is a highly under-penetrated market for life sciences,” one MPM Capital partner told reporters (our coverage).

Telecommunications: Indian telecommunications company Reliance Communications invested an undisclosed amount in Silicon Valley company Stoke, which is building a technology that allows multiple telecom networks to talk with each other — from WiFi, WiMax and others (our coverage).

Click on image below to see full report (downloads pdf) from Venture Intelligence.

updated
Metaweb Technologies, the San Francisco company developing an open shared database called Freebase to store and edit the world’s information, has just gotten a big boost from Benchmark Capital and Goldman Sachs.

The two firms have invested in a $42.4 million second round of capital for the company, VentureBeat has learned. The company could not be reached for comment. A partner at Benchmark was reached, but he declined comment. [Update: Benchmark followed up Tuesday confirming the news.] This follows a $15 million investment two years ago. Besides Benchmark, the earlier investors also include Millennium Technology Ventures and Omidyar Network.

The investment is considerable, and comes at a time when a number of experts are betting that a more powerful, “semantic” Web is about to emerge, where data about information is much more structured than it is today. People are still waiting for the “killer app” that will exploit this new sort of web, but it’s generally believed that a database such as Freebase or Twine will be needed for this to happen.

[Update: I should clarify: Twine is not so much a database as it is an application. But the linking of data -- through relationships -- is similar, and thus the easy confusion. Conceivably, Twine could use the Freebase database, and is thus complimentary. See comments below. Twine's Nova Spivack says it best: "Twine is more like a semantic Facebook, and Metaweb is more like a semantic Wikipedia." Metaweb is a content repository and Twine is an app that uses content for specific purposes.]

VentureBeat writer Chris Morrison once described Twine:

Let’s dumb this down to a very concrete example. In Twine, I might be identified as “Chris Morrison,” and then labeled with the markers “writer,” “venturebeat,” “male,” “technology,” “charming” and “good-looking” (all true, of course). Twine would set me apart from the many other Chris Morrisons running around.

Both Freebase and Twine have drawn considerable hype (see coverage when Freebase was announced last year). Freebase is essentially building a Wikipedia-like database, but with much more power. While volunteers are madly writing up entries on Wikipedia — and very good one at that — there’s no system on Wikipedia that can tell the functional relationship between two related pages — i.e., something telling it “here are all the entries about males who are good-looking and who write about technology.” Freebase has the ability to do that.

Here’s a video tour of how it works. Freebase categorizes knowledge according to thousands of “types” of information, such as film, director or city. Those are the highest order of categorization. Then underneath those types you have “topics,” which are individual examples of the types — such as Annie Hall and Woody Allen. It boasts two million topics to date. This lets Freebase represent information in a structured way, to support queries from web developers wanting to build applications around them. It also solicits people to contribute their knowledge to the database, governed by a community of editors. It offers a Creative Commons license so that it can be used to power applications, on an open API.

Search is an example of an application it can make more powerful. See the screenshots below, which show you the example of a search at Freebase for the word Manhattan. Freebase lets you further specify that you’re looking for a film, as opposed to a location, and it rearranges the results accordingly — something you can’t do with Google.

Freebase “knows” Woody Allen is an director, and then knows other directors. It also knows Allen’s place of birth, and it can take you to that city, where you can find other people born there, and so on. Everything is connected.

MetaWeb is run by Thomas Layton (pictured here), who became CEO last year, after he left another Benchmark company, OpenTable.

[Updated: We've corrected the article below, based on further reporting. Regulatory filings about venture capital financings are tricky, because they're often late, and misleading. That's why the proposal to bring more transparency is a good one.]

Federated Media, a popular but sometimes controversial ad network for blogs, has raised another $4.5 million in funding, according to PE Hub’s read of the company’s recent regulatory filing.

Returning backers include New Enterprise Associates and Omidyar Network, according to the filing; FM has raised nearly $3 million to date, PE Hub reports. [Update: We're told NEA didn't invest, and its not clear why PE Hub reports this. The lead investor in FM has always been Panorama Capital, a group formerly part of JP Morgan Partners.].

Disclosure: VentureBeat uses FM services.

(Update: Apologies, we’d meant to put a questionmark in the headline, so we’ve fixed. We’re checking on this rumor, but now we’re getting more doubts about this supposed sale)

Here’s the latest in Silicon Valley tech world:

Video site MetaCafe to be sold for $200 million? — That’s what this site says. We reviewed Metacafe, which recently moved to Palo Alto, here.

Common Sense Media, a site where families can review movies, films, TV shows, games, raises $4.25 million — The cash for the San Francisco company comes from the Omidyar Network. Christine Herron, an investor at Omidyar, has spoken highly about this company; the investment comes as little surprise.

Lots of VC deals — If you haven’t kept up with our left column lately, here are links to the venture fundings of PayByTouch, MontaVista (from a couple of days ago), and Pinger (we’ve since confirmed details of this one), respectively. Also Zipcar, largest car-sharing service, raises $25 million. This is the second round of venture backing for the company, and it comes from Greylock Partners, Benchmark Capital and Boston Community Ventures.

Has Google invested in Chinese peer-to-peer company Xunlei? — That’s what the rumor is. Xunlei is reported to have seen between 75 million to 100 million downloads of its software, and has raised previous funding from Morningside and IDG Ventures.

Google’s vanishing click-fraud case — Bizarre story about how Google has apparently dropped a click-fraud case. Michael Bradley, 32, reportedly was caught red-handed while trying to extort money from Google — investigators allegedly taped him across from an office at Google where he’d visited and threatened distribute a click-fraud technology he’d developed, unless Google paid up. The article makes your think Google found the technology so scary that it cut some sort of deal with Bradley, to avoid legal proceedings that would have brought the technology to light.

Yahoo’s woes in china continue — Yahoo China President Xie Wen has left “for personal reasons,” only 42 days after he had joined the company.

Jason Calacanis joins Sequoia Capital as entrepreneur in residence — Calacanis recently resigned from leading AOL’s Netscape property, and said Tuesday he’ll be joining Sequoia Capital, the big-name Silicon Valley venture capital firm. Previously, he founded Silicon Alley Reporter magazine and was a co-founder of Weblogs, a network blogs sold to AOL last year.

AskCity looking pretty good — Last week, we reported IAC and its search property, Ask, were launching a local portal site. It has launched, and it looks very useful. As mentioned, it makes sense for IAC to merge its various properties: Now you can select a restaurant, book a reservation through OpenTable, do a search for nearby events, such as a concert, book a ticket through Ticketmaster, find a map to chart your nights traveling, and do all this during one search session — and all at IAC’s properties.

We’ve put green arrows on the screenshot below to highlight the notable parts. At right is a place you can easily annotate it all for friends (place markers, or draw boxes on a map, and so on). On the left, you’ll see the four categories of search: businesses and services, events, movies, and maps & directions.