VentureBeat

Mobile search and advertising company Jumptap has raised $26 million in a fourth round of funding led by AllianceBernstein, with all previous investors participating.

The company has positioned itself as an alternative to Google’s search and ad services for mobile devices. The largest carrier in the country, Verizon, is partnering with Google for these services. But Jumptap has business relationships with AT&T and 16 other carriers of various sizes, and has said it reaches around 150 million mobile subscribers.

Jumptap’s other partnerships include a deal with iPhone analytics firm PinchMedia. Startup competitors include Medio.

Previous investors have already put a total of $25 million $73 million into the company, and include: General Catalyst Partners, Summerhill Venture Partners, Redpoint Ventures, Valhalla Partners, and WPP.

Spending in IT trends downward — Growth in spending is slipping from 7 percent to 5 percent this year, according to a Goldman Sachs report summarized on CNET. Cost cutting measures are getting the most new investment, with server virtualization topping the list.

Google may start auto or music service — Having successfully predicted that Google would start Google Health and a virtual world, which turned out to be Lively, research firm Hitwise has turned back to its data to predict the search giant’s next moves. The results suggest something related to either autos (perhaps bad news for these two ) or music (which could affect many more companies).

Yahoo may want to buy Demand; Demand may not want to sell — Demand Media, a large domain speculator and advertising business that qualifies as one of the Internet’s most heavily-funded companies, may be on Yahoo’s acquisition radar, reports TechCrunch. One small problem: Demand don’t wanna sell, at least according to All Things D. Were the acquisition anything more than pipe dreams, Yahoo might offer up to $2 billion.

Senator grills ad startup over privacy — “Deep” targeting firm NebuAd may not survive in its current form, if the chair of the Senate Commerce Committee has his way. The Senator took issue with the startup’s tracking of users’ surfing in a hearing on Wednesday morning, and especially with the company’s opt-out policy, which he said should be opt-in, only. We’ve previously covered the company’s technology in some depth. Separately, Facebook’s privacy officer testified on his own company (transcript here), and Google and Microsoft said that they would support new privacy legislation.

Senate approves expansion of Internet surveillance –Also on Wednesday, the Senate passed expanded wiretapping provisions to allow more government surveillance of citizens, just hours after the Commerce Committee was criticizing businesses for making efforts to do the same. Neither opt-ins nor -outs from FBI snooping were discussed.

Gaming investor? Headed to E3? Don’t bother — Long-running and highly successful gaming conference E3 has turned into a lame duck, according to Wedbush Morgan analyst Michael Pachter, who told TheStreet.com that the event is “virtually useless for retail and investors.” Of course, some might argue the booth babes are reason enough for a visit.

Could all Internet traffic be encrypted? — If the famed Swedish file-sharing community the Pirate Bay has its way, the answer is yes. The group is proposing a network-level encryption plan called “Transparent end-to-end encryption for the Internets”, or IPETEE, in response to a local law that allows Sweden to snoop on the Internet communications of its citizens. Incidentally, the idea would also put a stick in the spokes of US surveillance programs, as reported above. But the plan may never see the light of day; NewTeeVee has more, including a brief history of TPB’s failed schemes.

Former Virgin exec joins Valhalla to invest in mobile — Saj Cherian, a former executive at Virgin Mobile USA and NBC Universal, has joined Virginia-based Valhalla Partners as a principal. Cherian will focus on mobile investments. MocoNews has a brief interview.

Venture capitalists: Now with less arrogance — The latest bubble to deflate for VCs is their egos, according to the Silicon Valley Venture Capital Confidence Index. Early-stage investors are bummed out over a lack of exits, particularly through IPOs. The full .PDF report is here, while ZDNet has a shorter summary.

Zimbra wins a battle in the educational email market — Yahoo-owned Zimbra has won a pretty significant victory with a decision by Stanford University to use the service over its competitors, which TechCrunch names as Gmail and Microsoft Exchange.

A tale of private equity gone horribly wrong — John Devaney lost his investors’ money. Not part of it; not most of it; all of it. Normally investors would pull out when things looked bad, but Devaney froze their funds before managing to lose them. Today’s feel-good private equity story is at the New York Times.

After years dominated by lumbering giants like Peregrine Systems and BMC Remedy, the customer service market is ripe for innovation, say executives at a startup called Parature. The company bootstrapped itself for several years, but chief executive Duke Chung sees a coming “land grab” as more companies enter the field and start targeting the smaller customers who have traditionally been ignored.

In order to keep up with the competition, Parature has been raising substantial amounts of cash — a $13.5 million first round back in 2006, and now $16 million led by Accel Partners.

The Vienna, Va. company says that through its software-as-a-service model and multi-tenant server architecture (in which a single server is used by several companies at once), it’s able to provide customer support software at a much lower price than the competition, putting it within reach of smaller startups that would normally just use email and in-house solutions. That setup also allows Parature to deploy and update its product much more quickly than traditional companies.

The startup has been refining its core product for several years, which emphasizes the customer service “portal” it creates for each client. By creating an easy-to-navigate site where users can find the information they need, and where members of the community can help each other through forums, Parature “deflects” numerous requests, freeing customer service representatives to focus on longer-term issues like improving the portals.

(There are other startups trying innovative approaches to customer service too, such as Satisfaction, a San Francisco startup that allows consumers to drive the service process.)

Accel Partner Rich Wong describes Parature as a company with the potential to become “the Salesforce.com of customer service” — namely, the pioneer and leader in providing customer service through a SaaS model. He was also impressed that, unbeknownst to him, several Accel companies like Trulia and Coremetrics were already using Parature.

Parature’s background is in many ways a classic startup story. Its founders, who initially saw Parature as a way to deliver tutoring software, started the company in a Cornell dorm room. Although its early offering was little more than instant messaging software and service, Parature started building momentum early on; a division of Hewlett Packard was its 14th customer, and started paying before the team had left that dorm room.

That momentum has continued building — the Vienna, Va.-based company now boasts more than 650 customers and has helped served around 10 million customer service requests to date. Much of that demand comes from Linden Lab, the company behind the enormously popular virtual world Second Life.

The company was already pretty successful in 2006, when it had around 300 customers, Chung adds. But he and his cofounders realized that they were losing potential clients to the larger salesforce of competitor RightNow, and if they wanted to continue growing, they needed to bulk up Parature’s sales team too.

“We were losing deals because we weren’t at the table,” Chung says.

He says his long-term goal is to one day make a similar boast to McDonald’s — “I’d like to eventually be able to say we served 1 billion customers.” That’s a distance off, but it sounds like Parature could one day make that dream a reality.

Existing investors Sierra Ventures, Valhalla Partners and angel investor Ching-Ho Fung also participated in the new round.

updated
IBM has invested in open-source database company EnterpriseDB, part of the giant company’s effort to hold its own in the fast growing Web application services market.

IBM typically does not invest in start-ups, but it has watched on as competing server company Sun acquired the popular open-source database company MySQL. Databases are a key component of the “stack” required to run applications on the Web, basically a place that stores the information that is called upon by servers when people visit the Web site.

IBM participated in a $10 million third round of investment into EnterpriseDB, which also included prior investors Charles River Ventures, Fidelity and Valhalla Partners.

Open-source, cheap tools for Web developing have become very popular, as they are forming the base of some of the fastest growing Web companies, from Facebook to Google.

MySQL has been a hit, because it is so cheap, letting Web developers use a basic version for free, or charging about $599 if it used commercially. EnterpriseDB, which is also open-source, charges closer to $1,000 for its basic version, justifying the higher price by saying it offers more features that make it more like the robust databases offered by Oracle. EnterpriseDB is still much cheaper than Oracle, however.

However, there’s been some criticism of EnterpriseDB’s claim to be open-source. Its products are based on open-source PostgreSQL technology, but EnterpriseDB adds its own improvements on top of PostgreSQL, additions which it does not make open-source, and for the most part hasn’t contributed back to PostgreSQL to make that product better (only very recently did it contribute some improvements).

Notably, Sun Microsystems had been a big supporter of PostgreSQL, offering it with its Solaris 10 server operating system, and partnering with EnterpriseDB. However, with Sun moving to acquire MySQL, the relationship with EnterpriseDB has cooled somewhat. To make things more complicated, IBM also has a relationship with MySQL, bundling it into many of its servers — which is unlikely to change.

The New Jersey-based EnterpriseDB has seen slower growth that MySQL, having 200 customers after raising $37.5 million. MySQL raised about $40 million, before selling to Sun for $1 billion last month (see our coverage ). MySQL says some 100 million copies of its product had been downloaded (see our coverage), though only a small portion of users request support or pay for the product.

Clarification: EnterpriseDB’s CEO Andy Astor got back to me and contested my point that EnterpriseDB hasn’t been contributing back to PostgreSQL. Here are a few lines his company’s PR representative sent me:

EnterpriseDB is the single largest contributor to the PostgreSQL community project, measured by financial contributions, resources, and technology contributions. It has regularly contributed back to PostgreSQL since its launch in May, 2005, so the statement that “only very recently did it contribute some improvements” isn’t quite right. Last week, in addition to the Series C financing, EnterpriseDB announced that it has open sourced its business intelligence/data warehousing technology, GridSQL, which is now available on SourceForge: http://www.enterprisedb.com/about/news_events/press_releases/03_25_08c.do

…Finally, here’s the blog from Matt Asay, one of the open source industry’s most vocal “purists” who applauded EnterpriseDB’s recent announcements: http://www.cnet.com/8301-13505_1-9902671-16.html. Matt writes: “EnterpriseDB deploys the same hybrid model as Zimbra, SugarCRM, Funambol, and others. While I’m not a big fan of hybrid models, the reality is that it’s an accepted, successful model within commercial open source. If it means that EnterpriseDB and these others also contribute ever growing mountains of open-source code, which it does, then I can accept that.”