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Shawn Fanning, who gained fame after launching early music file sharing company Napster, is in advanced stages of talks to sell his most recent social gaming start-up, Rupture, for $30 million.

The buyer would be Electronic Arts, but unlike first reported by Techcrunch, the deal hasn’t gone through. I reached someone very close to the deal but who requested anonymity, who said “nothing has been signed, but it’s getting close.”

“Is it likely to go through?,” the source continued. “Yes.”

Finally, it looks like Fanning will hit paydirt. Napster went bankrupt after facing insurmountable legal challenges, and Fanning’s second music start-up SnoCap didn’t do very well either, and was reportedly sold for very little to imeem.

We reported on Fanning’s Rupture a year and a half ago, when it first emerged with a goal to bring social networking to popular online multiplayer games like World of Warcraft. It has stayed in a private testing mode since then, having delayed its launch, so Electronic Arts is obviously buying the company for its technology and potential. The area of online social gaming is promising because millions of gamers have formed communities with each other through playing, but their interactions have been limited by the confines of proprietary software.

With social networking and online gaming all the rage (with $1 billion in subscription sales alone), it’s no surprise that Electronic Arts, the giant game maker, which has been struggling to find itself in recent years, would be interested. EA is working on a variety of online games. The company’s Mythic division has been at work on “Warhammer Online” for four years and it expects to launch the fantasy-role playing game in the fall. Spore, another single-player game with online elements, will launch in September. But it isn’t immediately obvious whether those games could use the Rupture technology. Sometimes the technology behind a game on a major title is written in stone years before its launch.

Fanning and co-founder Jon Baudanza will both join Electronic Arts under the planned agreement.

Rupture raised about $3 million last year from Ron Conway’s Baseline Ventures, Joi Ito and Reid Hoffman among others. (Dean Takahashi contributed to this post).

It’s pretty rare that venture capitalists will bet on a company that shows a hint of impropriety. Yet happens occasionally, for companies that don’t push the envelope too far.

In March, for instance, soft-porn site Zivity got $7 million from two prominent firms. The latest is PurePlay, a poker and proto-gambling site that today announces $15 million in funding from Bay Partners and prominent investors including Ron Conway, Peter Thiel and Owen Van Natta.

PurePlay doesn’t do much to distinguish itself in terms of game play: Like Yahoo Games and many other sites, it uses standard poker variants like Texas Hold’em and Omaha Hi-Lo.

What distinguishes the site is that you can actually play for, and win, money in your poker games. That makes it almost unique in the aftermath of recent legislation. Recent laws like the Unlawful Interent Gambling Act, passed in 2005 to limit online gambling, drove the betting sections of huge poker sites like PartyPoker.com out of the United States.

That initial description makes it sound like PurePlay was started to capitalize off the UIGEA. The law has been murky, and so open to infringement. Congress stopped short of defining it clearly in the 2006 law, directing the federal government instead to enforce state laws restricting such activities.

But the site was planned out and started well in advance of those laws, says CEO Jason Kellerman. The trick to PurePlay is that it works off a subscription model, with users paying set monthly fees to play, but gaining the potential to win large sums if they’re good enough to win tournaments.

That general scheme also applies to other sites, like skill-gaming portal King.com, but PurePlay caters exclusively to poker players. And the market is huge: 50 million players, of whom 40 million don’t gamble for money anyway, according to Kellerman.

For that 80 percent of the group who apparently don’t want to pay, though, there’s a hidden motivation to shell out for a subscription fee. In free games, bad play reigns — when the money is entirely virtual, players have no motivation to do well, and make stupid moves that detract from the game. With a subscription fee, players are simultaneously assured that any losses will be small, while also given a better standard of gameplay.

Of that sizable pool of gamers, PurePlay has captured about a million people. It doesn’t disclose how many are paying, but some extrapolation is possible. The company says it pays out over $125,000 each month in prizes. Subscriptions are $20 a month, so if PurePlay gives back 25 percent of its subscription fees, it has around 25,000 paying subscribers; if it gives back 50 percent, then only 12,500 subscribers, and so forth.

For the (likely) vast majority who still prefer to play for free, PurePlay runs its own ad business, which Kellerman says does quite well, generating “hundreds and hundreds of millions” of ad impressions each month. In addition, he says, user growth has been strong, with adoption rates by new visitors “fantastic.”

So if the online poker business can still be so profitable, why isn’t everyone and their brother jumping in? For starters, Kellerman says, the business of growing a poker portal isn’t easy. “It turns out the infrastructure is pretty expensive,” he told me, noting that the majority of initial investment went toward scaling up to meet demand.

Now the “vast majority” of the company’s money is pushed back into advertising. Kellerman, as well as other members of the executive team, have backgrounds in search engine optimization, meaning they pour most of their effort into low-CPA schemes like Google ads.

Of the $15 million invested into PurePlay, the company isn’t disclosing how much went into each round. It’s based in San Francisco.

Buddy Media is a small player in the game of trying to build businesses on Facebook’s developer platform, and on other social network platforms, but it has big plans.

Today, it is rolling out an ad network of its own — meaning it is competing against fairly established companies like RockYou, Social Media, Lookery and others. It has also raised a $6.5 million round of funding led by Softbank Capital, with participation from European Founders Fund, GreyCroft Partners, and angel investors including Ron Conway.

New York-based Buddy Media, the maker of virtual Facebook currency “Acebucks,” bought a set of small applications built by ChipIn, last January, in a bid to grow bigger in the face of market leaders like Slide and Rockyou.

Adonomics, an analytics service for Facebook applications, says Buddy Media has the 33rd largest reach on Facebook, with 5,894,851 total installs and 63,985 daily active users. Adonomics has been criticized for overvaluing Facebook applications (it values Slide at $318 million, for example). But the only people upset about BuddyMedia’s valuation here will be the company itself and its investors: Adonomics pegs it at $964,469.

However, as one of Buddy’s investors says, the company has been approached to do strategic deals with larger companies and instead had its pick of term sheets. The market here is young, there’s still lots of opportunity, and maybe Buddy can yet carve a space out for itself.

Mill River Labs has raised a $900,000 seed round for its start-up information wiki TradeVibes, which just launched in public testing mode.

TradeVibes is far from the only website to offer some kind of company database — read our hot-off-the-press coverage of LinkedIn’s new features, for example — but chief executive David Li’s vision goes beyond creating an information repository. TradeVibes, he says, can become the center of not just business facts, but also debate and discussion.

Investors include the “godfather of Silicon Valley” Ron Conway, Dave McClure, the Kinsey Hills Group and Aydin Senkut’s Felicis Ventures. (Senkut is an investor in VentureBeat.)

Despite some respectable backing — and the impressive history of its four co-founders, who were all early PayPal employees — the Mountain View, Calif.-based company seems to face an uphill battle. For one thing, it doesn’t have the built-in publicity that CrunchBase gets from parent site TechCrunch, and it can’t draw on a large pool of existing users like LinkedIn’s new company directory (the former can be edited wiki-style by users, while the latter should be adding wiki features soon).

Li, on the other hand, is quite aware of TradeVibes’ competitors — you can look them up on TradeVibes’ “Mill River Labs” profile. In fact, the “competitors” page is one of TradeVibes’ best features. Not only can you see a list of competing and related companies, you can also draw up a chart comparing those companies’ web traffic. (See screenshot below.) Other features include a “start-up discovery” function that identifies start-ups in the TradeVibes database that might match your interests, as well as a customizable company information widget. It also helps that unlike some competitors, such as Hoovers, TradeVibes is free.

Above and beyond the individual features (which are mostly useful, but not groundbreaking), there’s TradeVibes general emphasis on social tools. After all, the wiki approach — and Li’s stated desire to “democratize company information” — is the heart of the TradeVibes concept, not an add-on as it is at CrunchBase and elsewhere. Not only can users write and edit TradeVibes company profiles, they can also submit relevant news stories, which other users can discuss and vote on. There’s also a “Bulls vs. Bears” option, in which you can vote on and argue about a company’s prospects.

So the site offers a bunch of interesting, possibly useful ways for entrepreneurs, investors and others to interact, and the whole package is quite intuitive. But, like any wiki, TradeVibes’ real value won’t become clear unless and until it attracts users. If it can’t, anyone visiting the site will find him or herself in an empty room — a nice room, but empty nonetheless. If, on the other hand, people start participating, then TradeVibes could build itself into a fun, informative and thriving community.

Seesmic, yet another video-sharing site that encourages quick, conversational clips that can be recorded and replied to, is opening up for public use, with the waiting period for membership requests down to less than a day. It has also unveiled the names of some high-profile backers — even as it gets slammed by critics (here and here, for example).

Seesmic has been dubbed the “Twitter of video,” for the short snippets of video people post of themselves talking about whatever is on their mind. Others can just skim the videos, or reply to the messages they see, creating back-and-forth conversations.

The criticism is that video snippets aren’t as effective as text snippets. Unscripted recordings can be quite boring, and while short messages work with text (as Twitter has shown), videos aren’t as easily consumable. Other companies have tried, and failed, to do so-called “video mail” before. It’s a simple idea, and so if it were viable, it may have already existed.

However, there’s one problem with these criticisms: The service seems to be catching on with its initial base of users. Our own test of a short, silly recording elicited a half-dozen replies from around the world within an hour. The 1,500-plus alpha-test users pump out a steady stream of videos, which Seesmic edits to produce a daily show. (Although posting is limited to members, anyone can watch videos, by going here.)

With that in mind, we think it’s worth talking about how Seesmic could develop — and start to make money — when it opens fully.

One reason Seesmic may be successful is because it is offering clear guidance: Make it short and digestible. So people have an idea of what to record before they start. However, as more people pile on, the stream of new “conversations” will become daunting and confusing to newcomers. Seesmic is already addressing this by employing video editors to pick through the day’s videos and splice together the best parts. These “shows” can be catchy, if sometimes also odd and amateurish.

In the future, founder Loic le Meur told us, there will be tagged “trees” with different conversational branches. Seesmic would shuffle new videos into certain categories so that, for example, if you were into knitting, you could quickly find your way to videos of people talking about knitting, or actually knitting on camera.

Because users quickly accumulate a group of friends once they’re online, more features will go in to help channel your attention, like a daily, automatic “show” consisting of your closest friends’ video updates for the day. Popular videos by users that you don’t know will come to light separately through the daily Seesmic shows, or in the conversational branches.

New features Seesmic adds come solely from user requests, according to Le Meur.

To monetize, the site has several ideas, including a Flickr-like subscription model with additional features, sponsorships, and charging for mobile versions that send videos to your phone. However, like a number of other services (including Twitter), Seesmic is most interested in building a firm user base first.

The investor list is mostly comprised of high-profile angel investors. Among them are Ron Conway, VC Jeff Clavier, former AOL CEO Steve Case, LinkedIn founder Reid Hoffman and TechCrunch maestro Mike Arrington (who has also given it plenty of coverage).

Despite the numerous video companies already launched, some investors continue to pine after video. Ron Conway, for example, has sprayed money at video companies, saying he still believes video represents a strong trend.

The remainder of the investor list: Jeff Pulver of Pulver.com, Martin Varsavsky of FON, Michael Parekh, Ariel Poler, Dan Gillmor, Steve Garfield, and Mark Pincus. The San Francisco company launched about four months ago.

SodaHead is one of many companies that offers a polling widget that you can embed on a blog or social network. Others include Polldaddy, Pollection, JS-Kit, Vizu, and others. But SodaHead differentiates itself by being focused on social interactions.

Poll Answers

SodaHead pairs polls with features such as discussion forums and Myspace-style user profiles, so users can both vote and discuss the issue presented in the poll, and do things like comment on each others’ profiles.

To demonstrate, here’s a poll with a hot question of the day in the tech blogosphere. Should you, as blogger Robert Scoble thinks, be able to use third-party service Plaxo to remove information from Facebook friends’ email addresses from their profiles (our coverage)? I agree that you should — after all, if somebody both Facebook-friends you and displays their email address on their profile, they are literally sharing it with you already. Not everyone agrees — so, if you want to talk about the issue more, use SodaHead’s forum that comes with this poll. You can either access the forum through the widget or go to it directly, here.

Back to SodaHead, the company. It launched four months ago, and has gained the most traction, it tells us, with musicians and their fans on Myspace. Many artists and managers are looking for new ways to interact with their large Myspace fan bases. Popular acts that use SodaHead include Plain White T’s, My Chemical Romance, Avenged Sevenfold. Others include include Pajamas Media, Hilary Clinton campaigners, OK Magazine, college newspapers and others.

The Los Angeles-based company reports 300,000 monthly unique visitors and 2.4 million monthly page views. It says it has done basically no public relations work, received no press coverage, forged no partnerships and done only limited advertising.

It was founded by Jason Feffer, a former vice president of operations and founding member at Myspace, and Michael Glazer, a former senior vice president of technology at investment bank Jefferies. It has raised $4.3 million from Mohr Davidow Ventures, angel group Tech Coast Angels and prolific angel investor Ron Conway.

Snocap, the company that wanted to let bands set their own licensing terms for music downloads across the Web, has cut its staff by 60 percent, CNET has confirmed.

The San Francisco company has struggled to define a business model amid quick change in the industry, and recently had moved into new areas, setting up online stories for musicians at various sites. It said its technology can track the usage of music online, and ensure that it is being licensed properly, according to copyright. The stores were a way for musicians to sell the music. A good idea, but a fragile one considering it needed to find a way to make money from it.
We’ve been barraged by meaningless press releases from the company - four in the last month alone — that try to drum up publicity. A recent one was for aTreasure Trunk contest at the Treasure Island music festival in San Francisco.

Snocap was best known for being the post-Napster effort by Napster co-founder Shawn Fanning. Fanning had since left the company, however, starting his own gaming company, Rupture.

The blog ValleyWag first reported the story, and said the company is for sale, and a spokeswoman didn’t dispute that.

In September 2006, Snocap announced a deal to sell music on MySpace, allowing bands to sell music for whatever price they wanted, in line with Snocap’s model. Snocap would get a small cut. That deal appears to still be in place.

The company was backed with $25 million from Ron Conway, Morgenthaler Ventures and WaldenVC.

Cake Financial is a new service for helping any stock market investor better manage their own performance.

The San Francisco company lets you import all of your financial data from online brokerage firms into your Cake profile, then compare your performance against other investors using the service.

Cake shows you the historical performance of your portfolio going back as far as ten years, as well as monthly and yearly performance data. You can compare yourself versus friends and family, as well as against stock indexes, or against top investors on Cake.

The service hides each individuals’ net worth, number of shares owned, and other data. You can only see what stocks people have invested in, and when, and how those individuals have performed versus the market. If desired, you can use a fake user name to disguise your identity. (See screenshot below.)

Hedge funds and mutual funds don’t normally provide this level of data analysis; hedge funds also report quarterly results a quarter later. Cake data is live, and lets you import from established sites such as E-Trade or Charles Schwab.

You can also choose to follow other investors, and see what they’re buying and selling from when you log in. Even in testing, the site is already revealing top investors — some of whom didn’t know they were better than their peers until using Cake, the company tells us.

A wide range of other features let you search for and follow users based on strategies, industries and other factors.

Recent studies, such as this one (pdf) by the Harvard Business School, have concluded that especially skillful individuals take advantage of “market inefficiencies” to make more money than everyone else.

Less-stellar investors are already learning from outstanding individuals on Cake, the company says — notably recognizing how a lack of diversity in their portfolios exposes them to extra risk.

So why would top investors join, and let Cake show others their strategies? Bragging rights and public affirmation, of course. Many Cake users are savvy enough at investing that they’re already handling investments for family members and friends, the company says.

Other sites, like Stockpickr, let users pick stocks they would invest in — a different concept from comparing real investments between established individual investors.
Investors include Alsop Louie Partners, Ron Conway/Baseline Ventures and others.

Screenshot of public rankings of investors on the site:

[Update 12/11: Twitter filed regulatory papers saying it had raised $4.8 million in a second round of funding, and that it possibly raise a total of $5.4 million]

Confirming what we first reported earlier this week, the fast-growing Twitter messaging service has raised a new round of funding.

The San Francisco company, which has become popular among people wanting to update online what they are doing at any given point of time, has announced the lead investor on the deal, which we hadn’t known earlier: Union Square Ventures, of New York.

The amount was undisclosed. Other investors include CRV, Marc Andreessen, Dick Costolo, Ron Conway, and Naval Ravikant, among others.

Union Square’s Fred Wilson blogs about it here.

This is an well-timed present for Evan Williams, owner of Obvious, the original parent of Twitter and now large stakeholder, who is getting married tomorrow.

(Updated at bottom with more discussion on differences from Digg, others)

Thoof is the latest company seeking to offer news readers articles that are relevant to them.

The Austin, Tex. company launched today, boasting an approach it says is more useful to the wider masses than competitors such as Digg, Reddit, NewsVine, NowPublic, Topix and others that seek to rank articles. Thoof’s trick is to latch on to information it finds about users’ news tastes, store this information in a place where it constantly updates its list about you, and then steadily improve its service.

It is founded by engineer Ian Clarke, who left the video-sharing site Revver last year, where he had been a co-founder and chief scientist. Two other Revver employees have joined him.

After an initial review of the site, we’re convinced this has great potential, and are keen to see it succeed — because most other efforts have failed to do this job well. By its nature, Thoof does better the more people use it. It depends on user-submitted articles, and so the volume of stories in its system is small at launch. We found no articles on “finance,” for example.

Here’s how it works, and why we endorse the concept.

Like Digg, Thoof provides a synopsis of articles on its home page — this includes headline, brief summary, and tags to designate topic matter. It then provides a link to the article, and sends the reader to the original source.

That’s where the similarities with Digg end. It doesn’t let other readers rank the articles for you. Rather, it offers articles to you based on what knows about you, such as IP address (which provides geographical location), the browser you use, your operating system and the site you were on when you clicked through to Thoof — all of which offer subtle clues about you. Then, additionally, as you search articles, it tracks the tags of the articles you read. Finally, it may soon begin asking you a random question from time to time, to gather more information.

Next, it lets you correct the article summaries. See screenshot below, where the arrows show the multiple ways you can correct a piece. You can propose a change, but it must first be approved vote a vote by members of Thoof’s community. Right now, that community consists of just three people, but Thoof hopes more members will participate as traffic grows. This correction process gives Thoof a leg-up on Digg, which has suffered notorious accuracy problems.

This project is way too early to know whether it will succeed or not. A long-shot? Yes. However, Clarke has put deeper thought into this than we’ve seen in some other throw-it-together jobs on personalized news attempts over the past couple of years.

Before Revver, Clarke built Freenet, a very early decentralized P2P technology designed to let people obtain information on the Internet while avoiding censorship — for use by people in China, for example. He attempted to commercialize the technology, forming Uprizer, but left in 2002 and dabbled in a number of projects.

At Revver, Clarke says he learned the limitations of collaborative filtering technologies used by companies like StumbleUpon and Amazon.com. These services offer you content — music, articles or whatever — based selections by others who have shown similar choices you’ve made in the past. However, the technology slows the more users are added to the system. It also doesn’t work well without the user first surfing for hours — so that the system can track selections.

Clarke also sought to avoid problems faced at other companies: Digg is dependent niche crowd of tech-savvy young males selecting stories, and can’t get out of its rut, he says. It offers no personalization for the rest of the world’s audience. Reddit meanwhile, tends to be politically slanted, and lacks corrective features, thus pointing to the need for editors. Finally, Wikipedia does a good job with editors, but breaks down when dealing with controversy. Some entries, on President George Bush for example, get “locked down” to avoid constant edits by fringe interests. A group of editors voting on changes deals with controversy, Clarke concluded.

Clarke wanted to build an algorithm that can store unlimited amount of information about a user’s interests. Thoof seeks to pinpoint personal tastes in more sophisticated ways, using Bayesian statistics. He points to a company called Cycorp, which is developing large knowledge base, feeding information into it like the “sky” is “blue.” He’s licensing information from a company doing something similar, but wouldn’t specify.

Thoof is built on a Java-based open-source framework called Wicket.

It has raised $1 million from Austin Ventures and angel investor Ron Conway.

.

Ron Conway, the most prolific investor in the latest wave of Internet companies, is hot for video companies, and ways to monetize them.

However, he’s upset by some recent investment practices, he says. Some VCs are offering entrepreneurs cash out of financing rounds, he tells reporter Kara Swisher. Basically, he says, it’s a “cash bonus for going with that VC….a payoff or a bribe… I think payoff is a great word for it.”

He continues:

What’s happening is third-tier VCs are trying to get deals away from Sequoia and KP and offering entrepreneurs some cash as part of the deal. I firmly believe that all the cash going into a company belongs in the company. I don’t want entrepreneurs to be bought off. All the money raised belongs in the company, so the entrepreneur can hire more people and build the company faster, and test out their idea. The entrepreneur taking a million bucks out of the company that should have stayed in the company says the company doesn’t have as much a potential for success.

Elsewhere, he says “entrepreneurs are in charge of the dining room table.” See video above (RSS readers will have to go to site).

While many may support Conway’s point of view, there are many entrepreneurs who vehemently disagree. They’ll argue that giving entrepreneurs cash in a financing gives them enough financial security to focus on the long-term — and thus willing to swing for the fences. Instead of yearning for pay-back for their work, and taking the first offer for an acquisition, they’ll be more likely to want to think really big. There are plenty of examples of this, the main one being Facebook. It is well known the founders took money out of the financing round, and that is arguably one reason why Mark Zuckerberg has pushed aside billion dollar offers, and stubbornly sought the big time. Facebook’s Sean Parker has since become a major proponent of this, helping push it at his VC firm, The Founders Fund.

Update: Another reason this is eye-opening is that Conway is an advisor to Facebook.

Update II: We should note that Parker’s cash-out plan may be intended for companies that are more mature, whereas Conway’s criticism of the cash-out practice (again see video) focuses on seed and first rounds. Now, Parker’s FF class plan technically can be implemented at the first institutional round (many companies are already quite mature by that stage). We’d argue, though, that each entrepreneur has different needs, and VCs should assess each company on a case-by-case basis.

updated

Auction giant eBay has acquired StumbleUpon, an San Francisco company that helps people “stumble upon” and share new sites related to their interests, for about $75 million.

In a statement this afternoon, eBay said the acquisition will give it “exposure to a fast-growing community-based service” that has around 2.3 million users, and that StumbleUpon is attractive because it shares similarities with eBay’s concept of community.

The deal size is not large relative to other deals we’ve seen lately, but it is a big coup for the founders, who moved from Canadian to San Francisco more than a year ago, and were self-funded until March of last year. They raised a round of $2 million or less (update: $1.5 million, we’ve confirmed) from Google’s founding investor, Ram Shriram, Lotus founder Mitch Kapor, Topic founder Ariel Poler, angel investor Ron Conway. (Update: First Round Capital also invested.)

Indeed, they reap a massive profit, something that most start-ups taking venture capital can not afford to do. Companies like Digg, for example, are rumored to be valued by venture investors at more than $75 million. Because VCs have bought shares at such a high price, they won’t let a company sell at such low levels.

The StumbleUpon deal was expected, rumored by several sources, and the price was reported accurately by the WSJ earlier this month.

Once people download is toolbar, StumbleUpon shows you Web sites that you can rate as good or bad. It starts showing you more of the types of sites you appear like, based on those sites have been rated highly by other people that have voted similar to the way you have. It does the same for videos, people and product information.

It makes money by showing an ad every hundred or so stumbles.

With no marketing, the StumbleUpon community has grown 150 percent from last year and
delivers some five million new recommendations a day to its user base, the company said.

As mentioned earlier, StumbleUpon could potentially let people stumble upon eBay products they’ve bought in the past, though the eBay did not mention this in its statement.

StumbleUpon launched in 2001, but only recently caught on in a major way.

Weebly, the free AJAX website creator, has just raised a $650K angel round and launched a way for you to create blogs from within your site.

The move pits the young San Francisco company, which has garnered about 25,000 users, against entrenched players like Google’s Blogger, Automatic’s WordPress and SixApart’s TypePad — each of which have millions of users.

The money comes from Ron Conway, Steve Anderson, Paul Buchheit (a creator of Gmail), Aydin Senkut and Mike Maples. Weebly had received its seed funding from YCombinator.

Weebly’s blog creator deploys the same remarkably simple AJAX-based, drag-and-drop interface that makes their website design tool so easy to use. (See our previous coverage here.)

When creating blog pages, you get the extra option of a “Blog Sidebar,” from which you can drag Twitter, Flickr and del.icio.us Linkrolls widgets (partial screenshot below). Weebly intends to add to this selection of widget defaults, but for now you can add any widget you want by dragging in an HTML box and pasting the widget’s code.

The best thing about Weebly is that you see the effects of your edits at the instant you implement them. Unlike its biggest rivals — including Blogger, which has some AJAX controls — there’s no need to pop up another window, adjust some settings and look at the preview to make sure you’ve nailed it. While Weebly is simple and fun to use, however, you’ll need design skills to create a professional looking blog — with appropriate color matching, and so on.

Weebly, its rival SiteKreator and others represent a move towards the commoditization of basic website design. All of them are in the early stages and do not have wide reach or a robust business model. But they represent a growing, potentially critical threat to web designers not versed in the cutting edge of the art. As these companies — and their much larger rivals — continue to improve on this technology and implementation, this threat becomes even greater.

Corrected: Motwani is merely an advisor

San Francisco’s CastTV, a site that says it can search video better than leading players like Yahoo and Google by turning up Javascript-hidden files and other information, has raised $3.1 million from well-known venture capitalists.

Video search is a huge potential market: Lucrative advertising can be displayed by the search results. Predictably, a gaggle of players are targeting this area. CastTV has yet to launch — it will do so next month with a testing version, and in summer with a fully public one — but it has taunted with promises it can do much more than its competitors.

It digs up online videos buried behind Flash, Javascript and related plug-in technologies. CastTV can find copies of Grey’s Anatomy that Yahoo can not, for example (we saw a demo; see our coverage). It crawls and extracts metadata about files from code contained in their surrounding pages — all of which supplements the things it knows about the video files. This is significant, because some major sites such as USA Today have intentionally stiffed Google and others by hiding behind Javascript. The funding is also notable because the founders last year said they were not looking for capital for the time being.

Details of the investment are here. Draper Fisher Jurvetson led the round. Other investors include Netscape co-founder Marc Andreessen and angel investor Ron Conway. Stanford professor Rajeev Motwani is an advisor.

Among CastTV’s competitors are Blinkx, Clipblast, Pixsy, PodZinger and Truveo (bought by AOL). Many of these players have been encouraged by Google’s failure to offer its video search capabilities to third-party sites, and hope they can license their technologies before Google does the same.

Just when you thought there were too many lightweight wiki companies around, another one is emerging with momentum.

Pbwiki has raised $2 million more from Mohr Davidow Ventures, a Silicon Valley venture firm, as has been reported elsewhere.

Wikis are Web sites that let multiple people edit their pages, the most famous one being Wikipedia. They’re good for people working in small groups on projects. Why would Mohr Davidow invest in this, when you’ve already got a raft of early players, from Socialtext, to Jot (now owned by Google, and closed to new users for now), WetPaint (which just raised 9.5 million last month from competing firm Accel Partners) and Wikispaces, not to mention the fast-growing Wikia (which is, however, slightly different, in that its wikis are structured according to thematic area, much like magazines on a rack, as opposed to individuals pursuing their own projects)? None of them are exactly rollingin the dough.

VentureBeat talked with seed investor Chris Yeh (who invested again in this latest around, along with seed investor Ron Conway), and Mohr Davidow’s David Feinleib. Yeh said Pbwiki has doubled its wiki growth over the past six months, which he believes is faster than chief independent competitors Wetpaint or Wikispaces (Socialtext has focused on corporate customers of late). Pbwiki now says it has more than 200,000 wikis, up from 130,000 in November, when we first reported on the company.

Feinleib said he was impressed with founder David Weekly’s reputation, and ability to get such traction with just $350,000 of seed funding. As for kicking the tires on whether Pbwikis’ numerous wikis were being created by real people, as opposed to spammers/squatters, Feinleib said he typed “Pbwiki” into some search engines and found enough convincing action. Notably, Feinleib said Mohr Davidow is “looking more aggressively at deals like this,” after not having made many new consumer Internet investments recently. However, he said he’s looking for evidence a company can make money, and noted Pbwiki’s premium accounts, which can be bought for between $10 and $35 month for extra features. It is now about break-even. We too opened an account at Pbwiki, and it has an easy feel to it. Like most wikis, you do have to go through the adjustment of figuring out how to create and organize new pages. It has many of the typical Web 2.0 features integrated; you can upload videos and other files into your wiki.

Roundup of the latest action in Silicon Valley & tech:

PayPal’s origin explored, one more time — Online payments company Paypal has spawned more Internet entrepreneurs from its founding team than any other company we know. Yet PayPal had a rushed and tumultuous birth; if you’re curious about yet another version of PayPal history, this is worth a read: Co-founder Elon Musk (pictured here) rejects the version that suggests he was a lesser player.

Wikio, which looks remarkably like Digg, raises $5.3M — Aside from ranking stories in various theme areas, like Digg does, Wikio gives you ways to publish articles and personalize your news page. The Luxembourg-based company has closed a first round by Lightspeed Venture Partners and Gemini Israel Funds. Its team has big-name European new media types: Founder is CEO Laurent Binard, who was founder of Mediapps (European Software Publisher), and chairman is Pierre Chappaz, who was Yahoo Europe President and co-CEO of Netvibes. Wikio’s seed investors include Loic Le Meur (VP Sixapart Europe), Martin Varsavsky (CEO FON), Freddy Mini (COO Netvibes), Ouriel Ohayon (Editor Techcrunch France), and Jeff Clavier.

Infinera, the fiber optic company, to pull IPO trigger — This is the company with the power board, with folks like TJ Rogers and Vinod Khosla, that has raised a huge $315 million in venture backing so far. It is reportedly planning to file for an IPO, at a $1 billion-plus valuation, says LightReading, noting Infinera has sent lock-up agreements to shareholders.

Start-ups are killing big software companies — That’s the only conclusion you can draw if software sales are going up and sales of the big guys, SAP and Oracle, are falling. More here.

Stealth companies of the week — Thealarmclock mentions Ron Conway’s latest company, Portfolia, and Redwood City’s Twofish, but has few other details. Let us know if you know more.

Acquisition environment humming — Dow Jones (sorry, subscription only, so no link) cites analysts and others saying M&A activity remains robust for now. We wrote about secondary activity. There’s a notable quote of Foundation Capital venture capitalist Warren Weiss saying the firm sold five of its portfolio companies in 2006 - and “turned down an extraordinary five offers for every one it accepted.”

Good to have power players on your board — Video company Veoh has not escaped the shakeout happening among video start-ups now that YouTube has emerged as leader, but Veoh backer and former Disney CEO Michael Eisner has a way of making news. When Veoh announced a partnership with Wenner Media’s Usmagazine.com, to create a celebrity entertainment channel on Veoh, the NYT wrote about it (even though there are lots of celebrity entertainment sites already).

Google adds sponsored links to your search history — Details here.

Google in talks to buy Adscape Media, for ads in videogames — The search giant is in talks to acquire the San Francisco company, which delivers online advertising and also places ads within videogames, according to the WSJ. A deal could be reached next week. The company has a member of H.I.G. Ventures on its board. (The WSJ notes that Microsoft last year acquired Massive, a company that delivers in-game ads, for close to $200 million).

Kiptronic raises cash for ad-insertion in podcasts — Our story yesterday, in case you missed it, is here. Kiptronic inserts ads in audio and video files as they’re downloaded for off-line use; this is different from the broadcasting ad-insertion technologies. See Techdirt’s critique of broadcasting hype here. More analysis here.

IBM Joins social networking field — Details here.

ThinkFree wins Web-based office software comparison — Computer World compares various Web-based software packages, and rates ThinkFree (first) and Zoho (second) the winners. ThinkFree edged out Zoho because it is more compatible with Microsoft Office. In a significant partnership with Omnidrive, though, Zoho lets users open and edit documents directly within Web-based storage service, Omnidrive, and then save them too — a first, to our knowledge.

Updated

Ron Conway, a well-known Internet investor, and entrepreneur Jim Pitkow have co-founded a company to stop advertising fraud online. They’ve invested an undisclosed amount of millions, alongside other angel investors.

The secretive Palo Alto, Calif. company, Fraudwall, also appointed former eBay executive Ken Miller as chief executive, the company told VentureBeat last week. Miller, 34, was the first employee at PayPal hired to tackle fraud. He joined in 2000, as PayPal employee number 22, and became vice president of risk management.

The company is saying little about its exact approach, other than to say it is focused on stopping click-fraud, which is when Web site publishers or others click on an advertiser’s ads to force the advertiser to pay more. The problem has caused distrust among some advertisers, and lawsuits filed by advertisers against both Google and Yahoo. Yahoo and Google have chosen to settle such suits, and maintain they’ve got click-fraud largely under control. Google reportedly now maintains fraud makes up less than 2 percent of clicks. (Update: Turns out, the report is untrue; see Google’s response here, which says Google does not know what the percentage of clicks are fraudulent). Though some people contest that, saying Google has a bigger problem than it admits to. Miller says Fraudwall will partner with advertisers, ad networks and search engines to track clicks. The team is already in the “double digits” of employees, and hiring mathematicians and people with roots in online payments fraud.

We think the company may be raising another round of capital, but is not certain.

Both Conway, who invested in search engine Google, and Pitkow, an entrepreneur active in the search industry, have close personal ties to Google, which is one of the leading targets for click-fraud — Pitkow was chief executive of Moreover Technologies, sold to VeriSign in October of 2005. Before Moreover, was chairman of Outride, which was sold to Google. Miller told VentureBeat that Conway is taking an active role in the company, leading its business development — the first time Conway has taken a hands-on role since SnoCap. The two came up with the idea for Fraudwall two years ago.

It joins a field of several players, including the young Clickfacts and the more mature OptimalIQ. (See our piece here.)

It is time for our mea culpa on our coverage of Silicon Valley angel investor Ron Conway.

Not because Conway has become the most prolific investor in Web 2.0 companies, with more than 100 companies backed in less than a year and a half.

But because we’ve been critical of Ron Conway for his investments during the Internet boom, saying they were symbolic of the era’s hubris. During that heady time, he threw lavish cocktail parties, and raised cash from a group of all-stars, including people like Arnold Schwarzenegger, Tiger Woods and Henry Kissinger — which he then invested into start-ups. We’d assumed that Conway had ended up losing money on his hundreds of dot-com investments, a correct assumption until a year or so ago.

Turns out, Conway has made money for his investors, VentureBeat has learned. His first fund, Angel Investors I, raised and invested in 1998, has seen a seven-fold return (7x), and his second fund, raised and invested during 1999, has seen a 1.5-fold return (1.5x). The latter assumes a $500 share price for Google, a company that Conway had backed with a small portion of his funds. That’s quite good, considering most investors in 1999 have seen a return of about 25 cents on the dollar.

Conway is now doing it all again. He’s made more investments than anyone else in Web 2.0, having backed more than 100 companies since June 2005, which is when he sold his interest in first two Angel funds to CSFB, and began investing his own money. Some companies he has backed are Digg, Zooomr, BuzzLogic, Perenety, PBWiki, Rupture and Vizu.

Question: Will he make more money, or less money this time around?

Update & clarification: Upon further reflection, the lesson here is a powerful one, even if it sounds mundane, and that’s to invest for the long-term. We should clarify, we’re told Conway distributed the Google shares to his investors at three different points, varying in prices, and the highest being at just over $200/share. Venture funds are always measured based on the value at distribution (seldom calculated “if held”), and when calculated that way, Conway’s returns are lower than stated above. Still, had you held to the shares he distributed to you, you’d be doing well — much better than we’d assumed just a couple of years ago.