VentureBeat

A new report by eMarketer forecasting physical, online, and mobile sales of music through 2011 paints a bright future for mobile music sales, and music labels seem to agree.

The most striking fact is the prediction that by 2011, the majority of music sales, 56.5 percent, will be online or mobile, with physical music sales falling by nearly two-thirds from 2006 to 2011. Also worth noting is that by 2011, mobile music sales will draw nearly even in sales to online — $7.3 billion in mobile sales versus $7.5 billion online. Scarier for the music industry as a whole, however, is that total music sales will decline by over $5 billion dollars from 2006 to 2011, with the skyrocketing growth of online and mobile failing to replace to revenue lost to slumping physical sales.

Nokia’s Comes With Music plan, which promises users of Nokia Music Store-compatible handsets a year’s worth of free downloads, has proved attractive to labels worried about these falling revenues. Warner Music Group, the third-largest record label, announced on Monday they would be releasing their catalog to the Finnish handset manufacturer. This means three out of the Big Four record labels, Universal, Sony BMG, and now Warner Music Group, have released their catalogs to Nokia’s program. The last remaining holdout, EMI, is said to be in licensing talks.

What’s attracting them? Perhaps the fact that the labels are taking a pound of flesh from Nokia in the deal. The Register reported in April that Nokia’s agreements with labels means the company must offer a wholesale per-unit price after a set number of downloads, rumored to be 35. In other words, in addition to the per-handset fee Nokia is already paying to labels, if any Nokia handset users decides to download more than 35 songs, Nokia must pay extra. And remember, these downloads will be free to the user, meaning there’s little reason not to download as much as possible. As the Register puts it, “Nokia is left with a crippling liability, which punishes it for the very user behaviour it’s trying to encourage.”

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The holiday break felt especially long this time, so here’s a longer roundup than usual — of everything you may have missed over the last few days:

Ebay’s Kijiji tries to tar Craiglist’s reputation — The NYT has a story about Kijiji, a competitor to online classifieds company Craigslist. The remarkable thing about the story is that it lets Kijiji executives associate Craigslist with offers of “sadomasochistic encounters and prostitutes,” without some sort of response from Craiglist. Kijiji, meanwhile, is positioned as family friendly.

Nokia has agreed to acquire Apertio, a UK mobile data network management provider for about €140 million — Details here.

IBM has acquired Israel’s data storage technology company, XIV for a rumored $350 million — Details here.

Venture firm Sevin Rosen splitting apart — All four of the venture capital firm’s Silicon Valley firm are leaving the Texas-based firm, including Nick Sturiale, the investor in Xensource, the virtualization company recently acquired by Citrix for $500 million. Sturiale will be a managing director at Carlyle Venture Partners, we’ve confirmed. The split was first reported by PEInsider.com. It’s part of a longer process of decline at the firm, and of general hardship in the venture industry right now.

Blekko is the umpteenth start-up to go after Google — Never mind that Google has won the search engine wars, or that Microsoft and Yahoo have poured tens, if not hundreds of millions, into trying to keep up, or that scores of other companies have launched to fulfill every conceivable search engine niche. Start-ups trying to take on Google keep coming. The latest is Blekko, a secretive company to be launched by Rich Skrenta, who co-founded the Open Directory Project and news site Topix. Skrenta says Google doesn’t have any competition, but we’re wondering where he was when a tsunami of search engines that hit in 2006, not to mention new ones like Mahalo last year and now Wikia Search to emerge in a few days. Anyway, it’s always great to see people think big, and we wish him well. He’s raised $2 million in seed funding from Ron Conway’s Baseline Ventures and two early Google employees, David DesJardins and Jeremy Wenokur. [Image is from the placeholder on Blekko's site]

Peter Thiel says venture industry need to be shaken up — The WSJ has a notable story about Peter Thiel’s view on the weaknesses of the traditional venture industry. However, the piece also says the value of his seed investment in Facebook has increased more than 50 times, which seems understated based on Facebook’s reported valuation of $15 billion now. You’d think the a seed investment would have been made at far less than $100 million, and that the value of his investment may have increased 1000-fold or so. We’ll do some checking on that…

Google’s corporate blogging outshines most others — Here’s a piece about how well Google’s corporate blogging effort is doing, and how few others are manging to do the same.

Marc Canter gets $400,000 for his PeopleAggregator.com — Canter has been working his platform, which is supposed to encourage more open social networks, for some time now. Here he writes his latest thoughts, and discloses his funding. See our previous coverage.

Dash Express, the Internet-connected GPS navigation device for your car, to sell for a whopping $600 — The Silicon Valley company, Dash, has raised closed to $42 million in backing from big-name venture capital firms Kleiner Perkins and Sequoia Capital. But who is going to buy this device at such a price, when you can get mobile phones or devices that offer much the same thing — more phones are GPS enabled and they’re sporting services like Google which provide increasingly accurate local search? And the Internet connection on Dash is unlikely to reliable while driving around. Dash lets you do things like find a Chinese restaurant while driving somewhere, but you can do that easily on a phone. In addition to the $600, Dash charges fees of between $10 and $13 a month, GigaOM reports. (Our previous coverage ).

The Google investing Mafia — The New York Times has the story about all of the former Googlers who left to start investing in companies, including Chris Sacca, Aydin Senkut, Paul Buchheit, Georges Harik, Satya Patel, Salman Ullah, Sean Dempsey, and Andrea Zurek. Only PayPal has rivals Google in spawning so many eager investors and entrepreneurs in the Internet industry. Particularly noteworthy is the example of Meraki Networks, the WiFi router company, which is both co-founded and backed by ex-Googlers.

Edgeio’s asset sold — Looksmart acquired most of the assets of Edgeio, the online classifieds company that shut down a couple of weeks ago.

Google Android smartphones phones could launch in February, according to rumors by APC — Although, while Google’s Android is stumbling on deadlines, phone standards around Linux are being rolled out by a consortium including Orange, France Telecom, MontaVista, and Access. The group has included an APIs for telephony, messaging, calendar, instant messaging, and presence functions, as well as new user interface components.

Netcape dies, while co-founder Jim Clark stumbles in real estate pursuit — Netscape, once a leading Web browser, has finally shut down. This comes, coincidentally, as one of its co-founders, Jim Clark, who left Silicon Valley a few years ago saying the tech industry boom was over, stumbles on his subsequent endeavor: real estate. The founder of Silicon Graphics, Netscape, and WebMD went to build condos in Florida, starting a company called Hyperion. The New York Times reports about problems the company is having repaying a $110 million loan and with customer complaints.

Google about to sign deal with Japan phone giant NTT DoCoMo — This will give Google a potential 48 million in a market where Yahoo has traditionally dominated. Details here.

Web 2.0 Summit, co-hosted by O’Reilly Media and CMP, kicks off this Wednesday at San Francisco’s Palace Hotel. A who’s who list of Web 2.0 digerati will converge for three days of deal making, partying and more deal making.

If you didn’t have the budget to nab one of the $3,595 tickets for the event, fret not - VentureBeat reporters will be on hand to bring you frontline dispatches.

In preparation for the event, here’s a quick preview of what’s expected during the week, which includes some product launches by MadeIt, Userplane, Radar and Nokia.

Facebook’s Mark Zuckerberg, Google’s Marissa Mayer and Microsoft’s Steve Ballmer will all be speaking — and ears will be perked for the latest on reported acquisition talks between Microsoft and Facebook, and Google’s response to this.

EBay’s Meg Whitman will be speaking Thursday, right before her company’s Q3 earnings announcement the same day. Friday’s Wall Street Journal had an article about eBay’s struggle to juice its slowing growth rates. We also hope the moderator asks her questions about the departure of Skype founder Niklas Zennstrom, and about eBay’s associated $900 million write down. Speaking of Mr. Zennstrom, the Skype founder curiously disappeared from Web 2.0 Summit’s list of speakers sometime over the last few days. As recently as last Wednesday according to the Google cache, Zennstrom was listed as a speaker at the conference, where he was to participate in a session entitled, “Show Me.” Oops. Today, all references to Zennstrom are removed from O’Reilly’s conference agenda.

Wednesday evening, MySpace will host a dinner with News Corporation CEO Rupert Murdock and MySpace CEO Chris DeWolfe. We hope he speaks about his pending acquisition of the Wall Street Journal, and how he sees his new media properties meshing with his old media properties.

Several companies are expected to show off their latest Web 2.0 wares.

Thursday night, at a party promoted here, MadeIt.com, a new Web 2.0 online invitations site, will make its public beta debut. MadeIt.com plans to take on market leader Evite.com by adding social networking features to “keep the party going” after the party’s over, such as online photo sharing, video sharing, slideshows, story sharing, message boards and widgets. The company was founded by CEO Stephen Weir and his advisor, Jonny Hendriksen. Weir tells VentureBeat the company has been self-funded to date with about $80,000 in capital. The company is looking to do a seed round of up to $300,000 in the next three months to get to proof of concept stage, at which point it may seek a Series A. However, it enters a very crowded sector, filled with the likes of Socializr, Renkoo, Skobee, MingleNow and the related events sites such as Going.com.

On Wednesday morning at an invitation-only breakfast, cell phone maker Nokia says it will introduce a new N series handheld computer that promises to marry the mobility of a multimedia device with the Internet (yes, this is frustratingly vague, but we don’t know anything else). Other handheld computers in N Series family combine many of the features of an Apple iPhone - such as Internet browsing, photos, videos, games and maps, without the phone part.

Userplane, which provides hosted communications applications such as chat, messaging and voice recording for online communities, plans to announce Userplane Feeds, a collection of free APIs so that developers can build the applications into their own sites.

On Friday, Radar Networks’ CEO Nova Spivack, who in a previous life founded EarthWeb, will unveil and name the company’s first Semantic Web application, most likely an online personal data organizer, according to a July feature in the recently shuttered Business 2.0 magazine. The San Francisco company, which is backed by Paul Allen’s Vulcan Capital, Leapfrog Ventures and angel investors, has been in stealth for a few years, yet has been been aggressively promoting its business, technology and ideas for the Semantic Web for quite a while (this is one of those “pseudo stealth” companies, promoting itself in public relations pitches to media outlets, even as it feigns secrecy). Friday’s anticipated announcement will also mark the start of the private beta for the not-so-secret service. In addition to naming its first product, the company says it will announce a strategic partnership. Stay tuned for later this week when VentureBeat’s Chris Morrison reports on Radar Networks’ product launch and tells us if the company’s first Semantic Web application is ready for prime time.

We’ve noticed a couple passes listed for sale on Craigslist here and here, or you can always crash the conference and join the unofficial Web 2.0 Summit LobbyCon unconference in the lobby of the Palace hotel.

Mark Coker is a contributing writer for VentureBeat. He’s founder of Dovetail Public Relations, a Silicon Valley technology marketing firm. He has no clients among the companies mentioned in the story, nor among their competitors. More on Mark at http://www.linkedin.com/in/markcoker

Here’s the latest action:
–Jajah goes after Skype’s turf on eBay
–Nokia buys Navteq, what does Google do?
–YouTube intros Adsense
–Yahoo lags on universal search
–Viacom backs DRM
–Technorati’s new CEO
–Costs of a start-up

Jajah tries to exploit Skype dissatisfaction, releases button for eBay — Now that eBay has admitted the Skype acquisition didn’t pan out as expected, and that the Skype co-founder Zennstrom has left earlier than the desired retention date of 2008-2009, eBay is probably pretty fed up with the Skype story. Well, Jajah, a competing Internet service, is rubbing it in. It is bringing its new button (see our coverage) eBay, an invading what should be Skype’s turf. As we mentioned, Jajah’s button is perfect for small businesses wanting a toll free 1-800 number, just the sort of customers eBay has, and which Skype was supposed to serve. From Jajah’s statement: “With Buttons, JAJAH goes beyond Skype –beyond the headsets to calls received on all phones, beyond the regular quality concerns and beyond the limitations of the closed nature of the Skype userbase. Unlike other Internet calling solutions, JAJAH Buttons on eBay: 1. assures the merchants privacy 2. can be customized by when they want to receive calls and from what countries 3. it does not require a download, headset, contract or broadband and 4. works on every phone….” The list goes on. here’s an example.

Mobile-phone company Nokia has agreed to acquire electronic mapping company Navteq, for $8.1B– This should shake things up a bit. Google uses the mapping-navigation software from the company, and it comes at a time when Google is about to release a major mobile phone offering (depending on the market, Google will offer varying services; few people believe its actually manufacturing its own phone; it will leave that part to the vendors). Now Nokia has swallowed it, and it could leverage this against Google, or in talks with Google about services offered with its phone. Navteq’s technology is behind vehicle navigation devices and is allowing mobile-phone applications with location-awareness, good for things like shopping, emergency services and targeted advertising. Statement is here.

YouTube introduces Adsense to run alongside videos — It’s just the latest effort by Google to monetize YouTube after it shelled out $1.6 billion for the company.

Yahoo introduces “universal search” features — Yahoo continues to lag behind the rest of the field on innovation on its search results. Google, Ask and Microsoft have all introduced something that has come to be known as “universal search,” or providing all kinds of content in results beyond the traditional ten text links. So now Yahoo jumps on the bandwagon and is now also offering things like video and images in its results when you search for certain things, such as rock bands. It’s also introducing something called “suggestive search,” a technology that guesses what you’re typing in the query box if you’ve already written a word and hesitate for a second. It gives you more clues to what you’re trying to find, and is an obvious feature to offer. Yahoo’s market share in search continues to drop. It won 19.9 percent of total search market share in August, down from 24 percent the same month last year, according to Neilsen/NetRatings.

Technorati gets a new chief executive — The blog search engine has lost its way, recently redesigned its site, but has yet to articulate a clear direction. It’s not certain what a new chief executive Richard Jalichandra can do to help it turn around. Announcement here.

Viacom CEO Phillipe Dauman says company will stand by digital rights management — As companies like Apple and Amazon do their utmost to abandon DRM, Viacom will continue the battle in its support. Speaking at an antipiracy summit, Dauman said that his company prefers to deal with the piracy issue in a free market, rather than introducing new laws. However, he also suggested that piracy might be better addressed through international trade agreements, seemingly implying that sites like the Pirate Bay could be stomped out by placing more pressure on their home countries. Dauman’s speech shows that the internet’s copyright battles are far from over; he called the upcoming court decision on Viacom’s case against YouTube, now owned by Google, a “landmark case that will clarify the rights and responsibilities of all media and content owners.” A decision against Google could carry serious implications for dozens of smaller sites. Via CNET.

Costs of a start-up, broken down —Redfin’s Glenn Kelman breaks down the various costs, from rent to salary and more, of a start-up. So when your VCs and advisors are asking you to come up with those dang financial models, you have somewhere to go. Very useful.