VentureBeat

Here’s the latest action:
–Jajah gets shut out of eBay
–German cell-phone software vendor buys iPhone game maker
–Verizon secretly pressuring FCC Chairman to renege on wireless opening?
–Facebook advertisers are “selling shovels to other miners”
–Ballmer: Ads to make up quarter of Microsoft business
–Research firm Gartner predicts continuing chip-industry slowdown
–Google’s DoubleClick acquisition may face still more hurdles

Jajah gets shut out of eBay — This was pretty predictable. As reported earlier, Jajah released a button aimed to give small businesses the equivalent of a free 1-800 number. eBay vendors could use it to let customers call them for free from their eBay page. However, eBay owns Skype, a competing service to Jajah, and quickly stripped Jajah’s buttons from the site within 24 hours.

German cell-phone software vendor buys iPhone game maker — The German company, Shape Services, has bought New York-based iPhone Applications List, showing how the iPhone has generated a platform of its own that’s creating quite a bit of excitement, and could eventually rival the iPod ecosystem. There’s an estimated $1 billion in sales annually of iPod add-ons, according to Dow Jones.

Verizon secretly pressuring FCC Chairman to renege on wireless opening? — News reports suggest Verizon is lobbying behind the scenes, perhaps even in violation of FCC rules, to have the FCC water down provisions that would open up the 700 MHz spectrum to competition. The FCC has opened the spectrum to bidders in an auction, where the highest bidder gets to offer services over the spectrum, but must also let other service providers access the spectrum too. Verizon, a carrier worried that regulation would let Google or others encroach on its wireless turf, apparently is seeking to make the FCC ease up on a key requirement: that the winner of the bid (Verizon presumably thinks it can win the bid) must open up devices and applications if they use the spectrum. Now Google is crying foul.

Quote of the day: Facebook advertisers are “selling shovels to other miners” – You’ve got to like the analogy by the New York Times’ Brad Stone in his piece about Facebook. He likens Facebook application hype to the 1849 gold rush: “Some [Facebook] developers report earning tens of thousands of dollars in advertising with the applications they have created. Yet their applications are mostly running ads promoting other Facebook applications — a situation that recalls the earliest Gold Rush miners, who earned a living selling shovels to other miners.” Overall, very few people found significant amounts of gold.

Microsoft’s chief executive Steve Ballmer says advertising will make up a quarter the company’s business within a few years — Details here. “Over time, all ad money will go through a digital ad platform,” Mr. Ballmer told a gathering of European ad agencies and clients. “All media goes digital; all advertising goes digital.”

Google remove all ads from its social-networking service, Orkut – This is just the latest sign that social networks are having a much harder time being monetized than people appreciate. Users post pornographic images, and advertisers don’t want anything to do with this. Google said advertising appeared on only 1 percent of Orkut pages. The site is popular in Brazil, but has been accused of containing child pornography among other illicit material. According to research firm comScore Inc., Orkut attracted visits from about 25 million people in August. Perhaps never before has there been such a disjunct between a site’s popularity and such a depressing amount of money that can be made from it.

Research firm Gartner predicts continuing chip-industry slowdown — Already down 4.3 percent from predicted levels, chip equipment orders will stay at their current low levels until late next year, according to Gartner. The research revised capital spending forecasts for the semiconductor industry, trimming off $4.7 billion for a predicted total of $54.6 billion next year. Slowdowns in the chip industry have, in the past, foreboded a slowing of the entire tech industry.

Google’s DoubleClick acquisition may face more hurdles — Not just one, but two committees in the House of Representatives are considering holding hearings over Google’s proposed buyout of DoubleClick. The House Energy and Commerce and House Judiciary committees are reviewing the case, following a hearing last week by the Senate Judiciary’s Antitrust, Competition Policy and Consumer Rights Subcommittee. The hearings may have been sparked by rivals including Microsoft and Yahoo, who are actively making arguments against the acquisition to Washington’s lawmakers. It’s a good thing for Google that the company has already been busy hiring lawyers and lobbyists in Washington; it’s got some catching up to do.

If there’s one thing tech aficionados dislike about the iPhone, it’s the slow cellular service provided by its carrier partner AT&T.

So 17-year-old George Hotz worked through the summer to hack the iPhone, successfully converting it to use another network: T-Mobile. He’s since published details online about how to do it. Mercury News story here.

Meanwhile, another group, called iPhoneSimFree, said Friday it will sell software to people wanting to unlock iPhones in large quantities. This follows a move by a Czech company called Bladox, which two weeks ago to started selling a $80 device called a Turbo SIM, that lets the iPhone run on another network. The company has reportedly been overwhelmed by orders, according to the New York Times. None of this is sanctioned by Apple or AT&T, of course. It shows that people want choice.

The latest action:

Skype for iPhone — SHAPE Services, a Stuttgart, Germany-based company, known for making mobile IM clients, has announced Skype for iPhone, an iPhone-optimized Web site that allows you to access Skype via the iPhone’s browser. Om has details.

Gbox, offering digital music without copy-protection — Gbox, a Cupertino, Calif. startup is apparently being used by Universal Music Group in its efforts to sell music without DRM. GBox has been secretive so far. AP has the details. Gbox will get referrals through ads to be listed beside Google results when people search for certain types of music. Songs at Gbox cost 99 cents each. It will launch Aug. 21, and is negotiating with other labels.

Gbox’s parent is Navio, a company we wrote about a year ago. See that story for the other notable features it offers. Navio has raised nearly $40 million, including $25.4 million in a second round of funding from WK Technology Fund and VantagePoint Venture Partners.

Yahoo thinking of giving up its paid search business to Google — Kara Swisher has details about supposed memos circulating at Yahoo, over at AllThingsD.

Google is closing Google Video Store — Users who have already bought videos through the store will be compensated for no longer being able to access those videos, but only with Google Checkout credit. Of course, this isn’t that great if you don’t happen to use Google Checkout.

The first hotel in space — Slated for a 2012 opening, ‘Galactic Suite’ will cost about $4 million for a three-day stay, according to Reuters. “But they may have solved the issue of how to take a shower in weightlessness — the guests will enter a spa room in which bubbles of water will float around. When guests are not admiring the view from their portholes they will take part in scientific experiments on space travel.” Company director Xavier Claramunt wouldn’t reveal his backer, but said a “space enthusiast” provided most of the $3 billion needed to build the hotel. The article is pretty vague on other details: “An American company intent on colonizing Mars, which sees Galaxy Suite as a first step, has since come on board, and private investors from Japan, the United States and the United Arab Emirates are in talks.”

BarCamp Block – The event for geeks is taking place Aug. 18-19. No superstar keynote speakers, no pre-programmed agendas. Back at SocialText offices in Palo Alto…”only this time, we are expanding it to the entire block to include the offices and boardrooms of many other tech startups who have benefited from BarCamp.” BarCamp leaders include Chris Messina, Ross Mayfield, Liz Henry, Tantek Çelik and Tara Hunt. Details here.

FlickIM is a new lightweight chat feature designed specifically for the iPhone.

It’s more nimble than competitors, and lets you exchange YouTube videos and Apple movie trailers.

More significantly, it’s the first feature produced by a group of nine young developers led by two former UC Berkeley students, Darian Shirazi and David Macintosh, both 20 years old. Their company, Next3, seeks to make communications easier for the 20-something generation, and has just raised $1.6 million in a first round of financing led by Alsop Louie Partners.

The company is building a more ambitious application, to be released in September, though it remains quiet on details.

This chat application took them a week to build, but the diversion was worth it because it fills a void on the iPhone, they said. While iPhone handles SMS well, it doesn’t have a good chat application. The iPhone is the phone of choice for the super-connected generation, said Shirazi, and he already all his friends at Facebook and elsewhere are using it over competing chat products, such as Meebo, he notes. Whereas FlickIM takes four seconds to load using AT&T’s Edge network, Meebo can take more than 20 seconds — in part because Meebo seeks to support multiple features and IM clients. FlickIM is designed to focused on one thing, said Shirazi: It only supports AOL’s AIM, because that’s the biggest, most popular IM platform.

FlickIM lets you manage several chat windows at once, fitting six conveniently on the screen (you click orange bubble icons to select the window you want to participate in).

To send a Youtube video over chat, a user creates a link by writing /Youtube/movie name. Or for an iTunes trailer, you type /t/trailer name. It uses a Google API to find the video, a technology is good enough to find most videos being searched for on a first try. FlickIM will soon create a feature that gives you an easier way to determine whether you’ve selected the video you’re searching for. It is built using Amazon EC2, to help it scale.

Shirazi recently wrote a an opinion column for VentureBeat about the importance of “nationalism” as a driving force for start-ups. Earlier he worked at Fotodunk, which was sold to music service iLike (our coverage here).

Here’s the latest dirt on the iPhone and iTunes:

IPhone battery replacement hurts — After your iPhone’s one-year warranty expires, its batteries can be replaced for $85.95, but only after you ship it to Apple for three business days. But who wants give up their phone for three days? The company said the battery should last 300 to 400 full charges before it needs to be replaced, meaning that it is likely to die right after the warranty expires. Ouch. Why aren’t these things replaceable?

IPhone very profitable — Apple charges $599 for the 8GB version of its iPhone, but it only cost $265.83 to make, according to a break down of its parts by research firm iSuppi. The firm broke apart the phone and tallied up the cost for various parts. Of course, it doesn’t include marketing costs. Some of the findings: $76 comes from Samsung parts, including the devices’ flash memory, SDRAM memory module and its application processor. The antenna is provided by Infineon. The display provided by Germany company, Balda, at $27 per phone (see Mercury News story). The company has thus made millions in profit already, considering estimates that it sold 500,000 to 700,000 over the first weekend.

Iphone compatible with Microsoft Exchange Server — Details at ZDNet.

The Universal Music Group puts Apple on notice — The major label said it will not renew its annual contract to sell music through iTunes. Instead, it has reportedly negotiated a right to allow it to remove songs from iTunes on short notice if the two sides do not agree on pricing terms in the future.

Updated

Today the arrival of the iPhone will leave time for little else.

Here’s a smattering of companies already exploiting the iPhone’s launch for a little publicity of their own:

Zoho offers iPhone version — The Pleasanton, Calif. online web application company is offering its Zoho office applications for the iPhone, called the iZoho. This allows users to view documents (and edit docs), spreadsheets and presentations. Zoho says it has simplified its interface especially for the iPhone.

Visto Mobile announces support for iPhone — Corporate email can be accessed through an IMAP connection to the iPhone’s built-in email application (announcement here).

Etelos has customer relations management (CRM) for the phone — See here, and here.

Updated to correct for an error in the New York Times piece:
EMI Music and Snocap announce MyStore partnership — Snocap will sell the label’s music through its MyStores, online stores that people can add to blogs or Internet sites. This time, it will play music from a major label that is compatible with the iPod. So far, Snocap has only sold independent label music in the MP3 format (NYT has details.)

More here from Read/WriteWeb on the iPhone development frenzy.

Update: Cellswapper lets you exchange your phone contract, letting you get out of your current plan by finding someone else who will take it over — so that you can afford the rather expensive iPhone, and not pay a termination fee. (Our coverage here.)

The first iPhone reviews are out.

See the New York Times David Pogue’s review here. He says the hype is justified:

…E-mail is fantastic….The Web browser, though, is the real dazzler. This isn’t some stripped-down, claustrophobic My First Cellphone Browser; you get full Web layouts, fonts and all, shrunk to fit the screen. You scroll with a fingertip —much faster than scroll bars. You can double-tap to enlarge a block of text for reading, or rotate the screen 90 degrees, which rotates and magnifies the image to fill the wider view…

However:

Then there’s the small matter of typing. Tapping the skinny little virtual keys on the screen is frustrating, especially at first…The BlackBerry won’t be going away anytime soon.

(image above courtesy of NYT’s Christopher Capozziello)

Internet radio site Pandora announced tonight the launch of a new service for mobile phones, finally taking the popular music site beyond its core internet audience.

Pandora’s site is a favorite among music lovers: It lets you discover new music based on your tastes and create custom playlists. However, until now, it hadn’t offered a decent mobile service — which raised questions about how it plans to maintain its edge, given the emergence of the Apple iPhone and others, such as Microsoft’s Zune.

Now you use it on your Sprint phone. Clumsily called the Pandora Everywhere Platform, it also integrates with a music-streaming hardware system made by Sonos, designed for home entertainment systems — and soon, with a new wifi-connected portable music player powered by another startup, Zing.

Pandora claims around 7 million users, and no doubt some of them will like the service. However, the move to hardware does put it in competition with the iPod and the iPhone, raising questions about the uptake; in fact, Sprint’s involvement suggests that this is an also-ran move on the part of the carrier, in reaction to AT&T’s 5-year deal with Apple.

Indeed, this has the signs of being hurried. At a product launch presentation tonight, the company said the deal was wrapped up over the over the last week and a half. Maybe Pandora’s cave to the record labels earlier this month made the company look like a less risky partner: As we reported, Pandora recently agreed to their demand that it block foreign listeners due to the difficulty in enforcing US-based licensing agreements abroad.

The Oakland, Calif. company is a classic start-up story that will be helped by these new partnerships. The service is a great way to find new music that you’ve never heard of. However, as mentioned, we have to wonder if these additional ways of accessing Pandora will be so valuable that people will choose to use it in addition to (or even instead of) iTunes.

The company is also losing money, despite running display advertising on the web. These services are a new revenue stream. The Sprint service is free for the first 30 days, then costs then costs $2.99 per month on top of a Sprint Power Vision data plan.

Apple’s Steve Jobs ridiculed the Microsoft’s Zune, saying by the time you finish fiddling with one of its main features, “the girl’s got up and left.”

Microsoft chief executive Steve Ballmer now laughs at the iPhone (click image above for video), saying it is “the most expensive phone in the world” — even after being fully subsidized (with the Cingular plan) — and that it doesn’t appeal to business customers because it doesn’t have a keyboard. How vulnerable the iPhone looks, now that the hype dies down — even without Ballmer chiming in.

Roundup of Silicon Valley news:

Google’s Larry and Sergey were more interested in technology than Yahoo founders — There’s a revealing 2000 interview with venture capitalist Michael Moritz posted by PodVentureZone, comparing Google’s co-founders and Yahoo’s. He was an investor and on the board of both, and says Larry and Sergey were closer “to the sheet metal, closer to the hardware.” He calls Sergey a “tough, little guy”:

I think Larry and Sergey have a much more pronounced interest in the core technology than Jerry and David. I think Jerry and David had and have an extraordinary and fervent interest in having a fabulous service for their customers, but they’re less interested in developing the raw underlying technology that I think Larry and Sergey are. I think there’s a reason that Larry and Sergey stayed longer grinding through their PhD stuff at Stanford than Jerry and David. And Larry and Sergey are much closer to the sheet metal, closer to the hardware. Don’t forget, Yahoo has never had its own search technology….

Google leases San Francisco office, finally — The search engine has been looking for an SF property for some time, in order to retain young workers who prefer to live and work in the City — instead of trekking down to boring Mountain View. It has now leased 210,000 square feet, for about $35 a square foot, at the waterfront property south of Market St., Hills Plaza. It could host 800 of Google’s employees.

Berkeley regulates nanotechnology — The city of Berkeley, Calif. is regulating nanotechnology, fearful of the new properties generated by the clusters of atoms or molecules sized at a billionth of a meter. At that small size, compounds can take on different, sometimes unpredictable characteristics, leading scientist and Kleiner Perkins venture capitalist Bill Joy, among others, to fret about the potential for nanotechnology — when combined with biology — to self-replicate uncontrollably. This threatens to make humans an endangered species. Here are more details (via NYT) on Berkeley’s efforts to regulate the “molecular foundry.”

NetSuite appoints Billy Beane to board — Netsuite, the maker of online software for small businesses, is considering going public, and has added Billy Beane, the Oakland A’s general manager, to its board. Beane was made a legend in Michael Lewis’ book MoneyBall: The Art of Winning an Unfair Game, which explained Beane’s strategy of picking players using unorthodox metrics and minimal amounts of cash. Beane says he is drawn to Netsuite because it is backed by Larry Ellison, and has an unorthodox means of selling software — doing it online, instead of via disks that must be installed on PC. We hope Beane doesn’t really think selling software online is that revolutionary. It’s been around for a while.

Newspaper industry forms two opposing camps — The newspaper industry remains in decline, but the newspaper companies can’t seem to stop squabbling. It appears two rival camps have emerged. The three largest newspaper publishers, Gannett Co., McClatchy Co. and Tribune Co., are reportedly forging plans (WSJ sub required) to sell advertising jointly on their newspapers’ Web sites — to attract big advertisers that don’t want to hassle with dealing with each company separately. Currently, national advertisers buy the bulk of their online display ads from folks like Yahoo, Time Warner’s AOL or Microsoft’s MSN, the story correctly reports.

However, Yahoo has announced plans to work with nine other newspaper publishers to build a similar one-stop-shopping spot for advertisers, as we reported. And ClickZ reports there’s bad blood between these smaller publishers and the big three, stemming from the fact that the Yahoo group was excluded by the big three from their CareerBuilder and Cars.com/Apartments.com properties.

OpenView Venture Partners spams web sites — A bizarre thing for a venture firm to do, but maybe not. Gossip site Valleywag reports that Boston’s venture firm, OpenView, spammed it. It seems OpenView sent a computer generated email to Vallewag, saying the firm wanted to invest without really knowing what Valleywag does. This is the modern version of the cold-calling that many later-stage firms have done over the years. We’ve sent emails and made calls to OpenView to confirm, and will report if we hear back.

Venice Project, based on Mozilla framework, but where will it get content? — More details from Om and the WSJ on the Venice Project, the TV-video company being created by the Skype/Kazaa co-founders. We can’t shake the feeling, however, that this project is deluged with competition in ways that Skype and Kazaa were not when those services became popular.

Flock co-founder Geoffrey Arone leaves — Arone, who was holding the fort at the new browser company, Flock, after former CEO Bart Decrem left last year, and other key developers departed, has also gone. We haven’t talked with Flock, but this may suggest the new version of the Browser, due out soon, may not be everything its investors had hoped. We’ve tried reaching Arone, but he did not respond. He is becoming Entrepreneur in Residence at Bessemer Venture Partners (via Techcrunch).

Music recommendation service, Pandora, ruins it, with advertising — Ads on a Web page are fine, but not when they are spliced into music you’d like to listen to. Geek Limit has the latest on Pandora, which tailors music to your tastes, which is inserting short audio commercials inserted into your audio streams. This is part of Pandora’s effort to experiment for ways to make revenue, at a time when music sites are consolidating (see news on AOL Music and Napster)

Second Life hype spurs odd behavior — Banks Wells Fargo and ABN AMO bought islands recently within the virtual world. Feeling the pressure, BNP Paribas decided it needed to buy an island too, VentureBeat has learned. More bizarre is the answer given by Sun Microsystem chief executive Jonathan Schwartz, when asked by the NYT about why Sun bought land in Second Life. He essentially didn’t have an answer, making vague references to how Sun was a new media company and needed to have presence online (read whole response here). His conclusion:

…I’m not going to advertise during the Super Bowl. What a waste of money. Where am I going to advertise? I’m going to buy land in Second Life.

iPhone reality setting in — Some good coverage lately of the Apple iPhone’s similarity to the Macintosh Computer which, like the iPhone, was designed in secrecy, introduced with wild hype and at a high price. But the shortcomings of the Mac eventually cost chief executive Steve Jobs his job. The Mac’s predicted sales never materialized in part because of expansion limitations, and now people are pointing to the iPhone’s limitations. It won’t allow third party applications to be installed. According to Jobs in the NYT, “These are devices that need to work, and you can’t do that if you load any software on them.” He said some outside software may be introduced, though it will be controlled by Apple. Others say this may not be a big deal. Install an Adobe Flash player that allows a bunch of Web services, for example, and Apple may get around some of the shortcomings.

Skype a disappointment? — Here’s a good summary in BusinessWeek of how Skype may not qualify for the $1.5 billion in earn-outs that were part of its deal with eBay, given lackluster performance. This is off-topic, but we also noticed an intriguing ad placement in the BusinessWeek story. Check out screenshot below, which shows an ad for Branson’s Virgin right next to a paragraph staying Branson is a visionary. Has contextual advertising really gotten this good? Or did this involve a human being?

Here’s the latest wrap-up of Silicon Valley tech news:

Cisco sues Apple over iPhone name — Who cares? If Apple loses, it will come up with a different name. Like, ApplePhone, or iPodPhone. Details of suit.

Yahoo signs deal with Akimbo to deliver video to televisions — Just the latest move in a huge number of deals pushing video to your TV. More details here.

Avvenu shares music via link in email — Avvenu, a Palo Alto start-up has been around for a while, but has introduced a new service for sharing music. By downloading a free music player, users can select tracks they wish to share (250 for free) and send links to friends via email. Recipients click on the link to listen for up to five days. Users sharing their music must have iTunes software downloaded, though recipients don’t. Works on Windows mobile software, too.

The latest on Jeff Bezos’ space project – Here’s the scoop from Amazon.com’s Bezos on Blue Origin, which reveals a cone-shaped vehicle to be used “to lower the cost of spaceflight so that many people can afford to go and so that we humans can better continue exploring the solar system.” Tests have already been made, though the program has some ways to go.

MyBlogLog sold for reported $10M, after no venture capital, and then spammed — The service, which lets bloggers and others see who is reading their blogs, and where those readers tend to go afterward, has sold to Yahoo for a reported $10 million. MyBlogLog became popular last year, after its little widget started showing up on blogs with the pictures of their readers. Some 45,000 bloggers had signed up for it. Om talked with chief exec Scott Rafer. Lately, though, some have showed it is relatively easy to spam.

Update on Techdirt’s analyst service — As reported (see here), Techdirt raised $600,000 to build out its Insight Community product, which hooks up expert bloggers with companies that seek their advice. Mike Masnick (left), of Techdirt, who has built the company without outside investments over the past decade, tells VentureBeat he finally bit the bullet, realizing it made sense to raise money to help build out the project — given all of the interest he’d received in it. It is still in testing mode, but he’s now building more interactive features, letting people in the network communicate with each other, rather than limit it to one-to-one relationship originally envisioned. Entrepreneur Mark Fletcher, one of the investors, joins the board. Also, investors were all outsiders. Insiders didn’t participate, as suggested earlier by the PEhub report, Masnick said.

Slideshow company Slide raised $20 million — We’d reported Slide’s venture round last year. Reports suggest Slide raised $20 million, giving it a valuation afterward of $60 to $80 million. This gives it some runway, even as competitor Filmloop lays off most of its workers. Here is our earlier story.

Weatherbill, an online site to sell weather insurance policies to individuals and businesses — Sounds boring, but it has all the Map mashups and other Web 2.0 candy to make it worth a look (via Techcrunch)
It has raised a first round of round of financing from NEA, Index Ventures and a number of angel investors.

Second Life has opened its application to developers — Many people find the virtual world Second Life difficult to get the hang of, which has no doubt limited its growth. Now it has opened its software for developers to provide alternatives. It isn’t clear whether this will spark a vibrant developer community or not.

Podzinger searches words in YouTube videos — Podzinger gives you a way search for words that are mentioned in YouTube videos. Podzinger has a tab letting you do this on its front page, and it tells you how many minutes and seconds into the video the reference is (although we couldn’t figure out how to zip automatically to the reference, like Pluggd does). More details here, at Splashcast blog. Blinkx is another company that searches audio and video files.

PayPerPost drops its purchase of Perfomancing assets — Details here.

Aaron Swartz, of Reddit, not done dreaming — Good piece in the Chronicle mentioning the impressive rise of Swartz, who built his first web site at 13, got bored, and then, circuitously, ended up building Reddit, which was bought by Wired Digital. Now 20, he says he’s headed back to academia soon. Re hanging out: “I’m so shy I don’t even hang out with the people I know now.”

Hype at Asiatech? — Days ago, we reported on the purchase of software developer Mediabolic by Macrovision. Sources told us the return was marginal, giving later investors slightly more than the money they invested. But it was no where near a two-fold return claimed by AsiaTech investor Katherine Jen in an interview with VentureWire recently, they said. Jen did not respond to a request by VentureBeat for comment about her “2x return” claim.

See Jobs’ demo of iPhone — It is striking, and worth it. See here, and click on “touch navigation” for starters.

Updated

A recent internal review by Apple concluded chief executive Steve Jobs didn’t do anything wrong even though he knew about the back-dated stock options. The review suggested Jobs didn’t appreciate the full consequences of what he was doing.

However, that doesn’t seem to square with fresh reports suggesting Jobs is strongly aware of the significance of back-dating, and has been for some time. John Heilemann in New York Magazine, reveals Steve Jobs pressured Apple’s board to reprice stock options as early as 1997:

Or so Jobs told Time magazine that August: “To restore morale, Jobs says, he went to the mat with the [Apple] board to lower the price of incentive stock options,” the magazine reported. “When the board members resisted, he pushed for their resignations.”

This revelation follows other troubling evidence that Jobs benefited from repriced options over time. A lawsuit filed last week, alleges, for example that from 1997 to 2004, five of seven grants by Pixar (where Jobs was owner and board member) were recorded at the lowest possible price within the months they were granted, and four of the seven were recorded at the lowest price within the fiscal years.

And at Apple, he exchanged his option for 10 million shares of restricted stock in Apple, netting $300 million in profit on stock sales on March 19, 2006, just a day after the Wall Street Journal first reported evidence of widespread backdating among U.S. corporations, the lawsuit points out.

Finally, even the impartiality of Apple’s internal review has come into question: Members of the special committee that oversaw the investigation — and more broadly, the board itself — have multiple potential conflicts of interest, the Merc points out.

What do VentureBeat readers think? How do you balance the tremendous benefits we get from having Jobs stay at Apple and continue to enrich our lives with things like the iPod (and iPhone, if it lives up to its hype), and the need for justice that lawsuits and — likely further investigations - are clamoring for?

(Illustration by Demetrios Psillos)

Updated

Apple has not let us down.

Chief executive Steve Jobs said the company will launch its own phone, dubbed the iPhone, and that Cingular Wireless will provide the phone service, ending weeks of speculation.

It will do much more than make calls and play music. It aims to be a full-fledged smart phone, and is underpinned with some elements of Apple software, such as its Safari browser, which could expose mainstream users to Apple’s eco-system in more varied ways. This may radically rewrite the digital balance of power, what with Apple simultaneous unveiling of its iTV device — which lets you transfer to your TV content from multiple PCs, outside sources, or Websites such as Apple.com. It contains a 40 gigabyte hard drive, and will cost $299 and ship in February.

From the WSJ, which first broke the news:

The iPhone, which is less than a half-inch thick, has no keyboard or dial pad. Instead, it uses a 3.5-inch wide touch-sensitive screen to make calls, watch videos or listen to music. It comes with a two-megapixel digital camera built into the back and can connect to the Internet using Wi-Fi wireless technology.

The iPhone, which will be available in the U.S. in June and later this year in Europe, will come in two versions. A model with four gigabytes of storage space will cost $499, while a version with eight gigabytes of storage will cost $599.

The phone will automatically synch a user’s media — movies, music, photos — through Apple’s iTunes digital content store. The device also synchs email content, Web bookmarks and nearly any type of digital content stored on a computer. “It’s just like an iPod,” Mr. Jobs said, “charge and synch.”

It will detect location, and Yahoo will provide Web-based email, while Google will provide maps — thus ensuring the buy-in of those two companies as supporters of the phone. Jobs says he wants 1 percent of the phone market by 2008. The company is negotiating with Cisco to be able to use the name “iPhone.” Cisco owns rights to the name, and recently introduced its own WiFi phone under the same name.

Here’s more, from the NYT:

iPhone rests heavily on a high-resolution touch screen that makes it possible to use a finger to control the phone. It also has several more subtle features, including sensors that track light and movement to prompt the phone to control screen brightness and physical orientation and other aspects of its operation. For example, when the phone is placed next to the user’s face, the keyboard is automatically turned off.

One of the immediate questions that analysts and industry executives posed about Apple’s new product was why the designers eschewed the higher-speed Cingular digital cellular 3-G network. Mr. Jobs said later models would support additional networking standards.

Apple’s shares soared more than six percent after the announcement. And in a sign that the market sees Apple likely to take market share away from others, shares of smart phone leader Research in Motion, which makes the Blackberry, plunged by about seven percent.

The latest roundup of Silicon Valley tech stuff:

YouTube myth debunked; idea really came from HOTorNOT — Remember the Pez dispenser story eBay fabricated to drum up a catchy media story about its founding? Turns out, the same thing happened at YouTube. The founders, Chad Hurley and Steve Chen told us and many others that their idea for YouTube came during a party, and their frustration at not being able to upload videos of it. Now Time reveals the truth, based on its own conversations with the founders, was much more complicated:

Chad and Steve both say that the party did occur but that [third co-founder Jawed] Karim wasn’t there. “Chad and I are pretty modest, and Jawed has tried to seize every opportunity to take credit,” Steve told me. But he also acknowledged that the notion that YouTube was founded after a dinner “was probably very strengthened by marketing ideas around creating a story that was very digestible.”

No company, of course, is ever founded in a single moment, and YouTube evolved over several months. Chad and Steve agree that Karim deserves credit for the early idea that became, in Steve’s words, “the original goal that we were working toward in the very beginning”: a video version of HOTorNOT.com.

DFJ backs Indian electric carmaker — The Silicon Valley venture firm helps pump $20 million into India’s only electric carmaker, the Reva Electric Car Company.

Jason Calacanis looks into advertising — Like media entrepreneur John Batelle, who moved from Industry Standard to FM Publishing, entrepreneuer Jason Calacanis has also realized the advertising industry is what really drives money in the media industry. So Calacanis, who previously formed media companies Venture Reporter and Weblogs, moderate successes, apparently wants to hit it big finally. Now at Sequoia, looking for his next big idea, Calacanis posts from his blog:

I’m looking for two full-time researchers in Los Angeles (i.e. folks who could work with me on a daily basis) and I’m trying to dig deeper into statistics and testing. Specifically, I want to deepen my knowledge around advertising using A/B and multivariate testing…

The Google mobile phone? — The Observer of London writes that European phone giant Orange is in talks with Google to create a mobile phone, and held preliminary discussions. There’s a lot of hype on this story; note it is poorly sourced, and note also the reference to “preliminary.” Google has good reasons to talk with everybody, but no reasons to get into the hardware business. Sure, it will deliver its search capability to anyone who wants it. Yes, it bought Reqwireless, a mobile browser company earlier this year, but the stated reason was to acquire talent, and don’t forget Google has been fixing its search for mobile phones for some time. Google bought Android, which supposedly tinkered with a mobile operating sysem. But Google is likely want to develop just that, to provide its search and other software in more sophisticated ways over a phone. Finally, phone theorists will point to Google’s purchase of Switzerland’s Endoxon, announced yesterday, which makes software to display maps on computers and mobile phones. But a hardware phone? Don’t think so.

The rush toward copyright violation prevention technologies — Yesterday, we wrote about a new start-up Attributor that is fingerprinting audio and video files to help content owners stop pirating. MediaHedge is another entrant in this area.

Text messaging people in other cars — Using the license plate of cars to text people occurred to us a few days ago while driving. After a few seconds deliberation, though, we dropped the idea, thinking it was silly: The only times it would be used, we realized, would be to send hate messages (an unprintable version of “your driving stinks”) or obnoxious come-on messages from guys leering at cute babes. Yet, coincidentally, just a couple of days later, we see that a company is indeed trying this long-shot idea.

News-ranking site Digg has upgraded video and podcasting features — See details here.

Linksys’ Internet iPhone — Linksys, the Cisco-owned unit that makes routers for homes, is selling new phones that enable calls through eBay’s Skype service and Yahoo’s Messenger. The phones carry the iPhones trademark is owned by Cisco, and thus raises doubts that the supposed Apple phone — rumored to be coming, perhaps next year — will carry the same name. What’s wrong with “iPod Phone”?

Google to deliver 3D images of moon, Mars and other planets — Details of the agreement with NASA here.

MySpace made available on Cingular — Details here.

Tom Perkins to publish memoir, beginning with HP scandal — The big-name venture capitalist, founder of Kleiner Perkins, who blew the lid off the Hewlett-Packard spying scandal, is writing another book. Gotham Books will publish his memoir, “Valley Boy: The Education of Tom Perkins,” in fall 2007. It will begin with his resignation from the HP board. The Merc has details.