VentureBeat

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.

[Editor's note: This is an op-ed piece by Nick Sturiale, a partner at the venture capital firm Sevin Rosen Funds. Among his investments was Xensource, the company recently acquired by Citrix.]

Across Silicon Valley, a crucial gathering occurs dozens of times every day: the venture-backed startup board meeting.

Drive past office buildings on highways 101 or 280 on weekdays, and you can almost feel the nervous energy radiating from corner conference rooms.

It’s a solemn convention where investors and management review a company’s progress and fulfill their fiduciary role for stakeholders.

Regrettably, these meetings often end up a waste of time, and not for dubious reasons. Well meaning CEOs frequently underutilize their board and subsequently set up a dynamic that can lead to directors questioning whether the CEO should be replaced.

Some CEOs use their board principally as an approval body for annual plans. Others take it a step further and rely on their board as a strategic advisor, an executive recruiter, a Rolodex for business partnerships, and counselor for follow-on financings. But many often miss the opportunity to build trust and an effective working relationship.

Earlier, when I was a start-up CEO, I felt like every board meeting was a de-facto management performance review. In fact, before each encounter, I’d imagine my investors humming Janet Jackson’s tune “What have you done for me lately?”

To avoid setting yourself up for failure, here are three highly simplified rules for running a superior board meeting and building a high-trust relationship with your outside directors:

1. Recast the agenda. Many meetings follow this agenda: A detailed department by department operations review with little actionable data at the board level. Several vice presidents stand up, dutifully review their slides and give a blow-by-blow account of how much activity they’ve got going on.

This dwelling on the operational minutia can create a misperception of business momentum – “look at all this activity, good stuff must be happening!” As a result, there is little time for discussing the hard or difficult issues impeding the company’s development: business model weakness, sales friction, investment opportunity costs, competitor moves, product engineering risks and management team holes.

The agenda should invert the topic and time allotment – to 20% presentation and 80% conversation.

One way to drive the agenda is to focus it around a key question or two. What are my (CEO) biggest worries? Why are we not growing faster? Where should we place our discretionary investment bets?

2. Enlist the board to help to solve the problem. Some CEOs struggle with how much to share with their board – assuming problems exposed reflect poorly on the CEO and management’s performance. Part of their ambivalence lies in a contradiction: Boards like to see that their CEOs are more paranoid than they are, but also want their CEOs to come up with solutions and carry an air of poise and confidence. So how a CEO discloses and characterizes a problem to his board is the problem…and the opportunity. The idea is to enlist members in helping solve the problem because when a board works on a problem it becomes invested in the outcome.

Otherwise, when problems finally emerge – as they always do – without early board involvement, these problems are perceived as “surprises.” Too many surprises and the directors begin to question whether the CEO is going to scale. Moreover, when directors develop a divergent and inconsistent set of opinions about how the company is faring, dysfunctional group behavior ensues and suddenly CEOs can lose control of their company.

The best boards develop a common insight around the key dynamics driving the company’s business. Common understanding is achieved by providing a holistic view set of snapshots/test results on how the company is faring and not cherry-picking the easiest results to measure. For instance, many startups tend to focus a great deal on quarterly bookings and less on market share, competitive position and trailing assumptions. One way to avoid this is to create a leading and lagging business indicators dashboard. On a table, contrast a column of leading metrics, such as the growth rate of leads, pipeline, bookings, average first order sales cycle against a column of lagging measures such as the growth rate of revenue, channel sell through, reorder cycle time, market share, customer profitability and satisfaction level. Using a dashboard, you avoid missing the early warning market signals where you are growing, meeting plan and celebrating, when in reality you are losing market share and your place in the league standings.

3. Ask your board to come prepared. Like a typical class setting where students have a mixed understanding of course material, some directors bring a deep grasp of your business and provide high impact counsel; others exhibit a superficial knowledge and bring a low value-added perspective. Never assume each director comprehends your strategy – often they do not. Keep in mind, you live and breathe your companies 24-hours a day, your board does not.

Guide your board to come prepared: Afford members the opportunity to prepare and request they come informed and ready to contribute. E-mail a packet with a one-page cover summary ahead of time (at least 24-hrs before the meeting, preferably sooner). Specify key issues, concerns, decisions that need attention/approval and areas the CEO wants specific help.

Also, regularly communicate with directors outside the meeting and review the competitive landscape and state of the business. The goal is to create contextual understanding to generate as many insights or “truth seeking moments” as possible such that the board discussions never gets caught up in low-level debates based on hearsay and opinion.

Recast the agenda, enlist the board to help solve the problem and ask them to come prepared. Employ these steps and you’ll create a board that operates as one of the biggest weapons in your arsenal.

Updated below

Citrix Systems is acquiring XenSource, an open-source “virtualization” company that lets multiple operating systems operate on a single server, reducing costs.

The price, at $500 million, is a whopping return for Palo Alto Calif.’s XenSource, which formed less than three years ago, and raised $40 million in financing. The company was spun out of Cambridge University effort. It competes directly with VMware, the hot industry leader that went public yesterday with tremendous interest from investors.

The market is huge, because less than 10 percent of Windows-based servers have been “virtualized” and so these companies have plenty of room to grow without having to claw at each other.

Citrix is a large company that delivers Windows applications to large companies, and it has long sought a server virtualization technology to complement its offering in order to speed up the delivery of those applications from more efficient servers. (Citrix also plans to move to virtualize the desktop itself, which is considered another huge, lucrative market but is essentially unserved right now.)

Besides saving costs through consolidating the amount of hardware you use, virtualization also helps with things like disaster recovery of files.

The deal is a big win for Nick Sturiale, partner at Sevin Rosen Funds, and Kevin Compton, a former partner at Kleiner Perkins Caufield and Byers, who seeded XenSource with its first financial backing. Compton invested on behalf of that Kleiner, but also Radar, his own firm (Radar invested more money than Kleiner, so this is a big win for Compton personally). It’s a big deal for Sturiale, too. He’s one of the younger partners at Sevin Rosen, a firm that has struggled for direction of late, and which recently decided to not raise a new fund. This deal helps give Sturiale the track record needed to continue in the competitive venture industry, even if it’s without Seven Rosen. Other investors include Ignition, New Enterprise Associates and Accel Partners.

The key connection, though, was Compton. He’s a board member at both Xensource and Citrix, which certainly must have helped things along.

Update: As of this writing, Compton’s bio — link above — still says he’s on the board of Citrix. However, we’ve been informed by Nick Sturiale that Compton is no longer a board member there. We’re not sure when exactly he left.

Update II: Compton left the board two years ago. He’s had less to do with Kleiner recently, so it doesn’t surprise us that he failed to update his Kleiner bio. More notably, it turns out that Sevin Rosen had a partner who was a board member at Citrix (see comment below), which really does make this a shot-gun wedding, doesn’t it ;-)