VentureBeat

Genomatica creates renewable chemical from sugar water — While most chemicals are petroleum-based, several startups are trying to create new alternatives. One of the first to succeed is Genomatica, which says it has a cheap process to make 1,4-butanediol, a component chemical of many common materials, from sugar and water, potentially disrupting a $4 billion industry. More on Genomatica’s process here.

Gaming becoming ubiquitous — A national survey showed that almost all teens play games.

MySpace Music may get another delay — The launch of MySpace’s online music store will likely be pushed back a week or more, yet again. For a laugh, check out our coverage from way back in April, when this launch was expected to happen within five days.

Windows 7 coming along — Microsoft, on the other hand, is shattering expectations by actually hitting its deadlines. Development of Windows 7, the replacement for the unfortunate affair known as Vista, is reportedly humming along, with a potential delivery date as soon as the end of 2009.

Lehman’s venture arm may live — Failed investment bank Lehman Brothers may not drag its venture unit to the grave with it, according to peHUB.

New game advertising startup launches — Worlds and Games, a stealth-mode San Francisco startup by two gaming veterans, is launching today with a focus on advertising in and around games. GameDaily has an interview.

Houses approves cleantech credits, offshore drilling — A bill allowing both offshore drilling and an extension of the Federal cleantech investment credit has passed the House of Representatives. However, it still has to pass muster in Senate, an undertaking similar bills have failed before.

Khosla talks down fashion-based cleantech — The cleantech investor disparaged some of today’s most popular alternative energy icons at a recent talk, including solar panels, the Pickens Plan, and the Prius.

Adobe profits down, but not out — The software giant’s quarterly profits fell seven percent, yet beat the Street’s expectations. Acrobat and LiveCycle drove profits, according to the company.

WebMD buys QualityHealth owner for $50M — Online health firm WebMD has shelled out $50 million for Marketing Technology Solutions, a venture-backed company that owns health information portal QualityHealth.com.

ZocDoc, the startup that helps users schedule doctors’ appointments online, has raised $3 million from Khosla Ventures.

The New York startup launched last September at the TechCrunch40 conference, and chief executive Cyrus Massoumi says growth has been climbing at an average rate of around 50 percent per month since then, both in terms of users and doctors. There are now 90,000 appointments available on the site, and 35,000 patients have used ZocDoc in the last 30 days.

So far, the service has been limited to New York, but Massoumi says the new backing should help it grow more quickly, both by adding more specialties and moving into new geographic areas. In the short-term that means expanding into New York’s neighbors, including parts of Connecticut and New Jersey; in a year or so, Massoumi says he’d like to start planting seeds — i.e. open the service –in other metropolitan areas. The greatest demand from site visitors is for service in Washington, D.C. and San Francisco.

There are other medical directories out there, including the recently launched Google Health, but Massoumi says ZocDoc is the only one that lets you actually schedule appointments through the site.

At first, I wasn’t certain why patients would need this kind of thing. Is it really that hard to pick up the phone, especially when you only see doctors, dentists and other medical specialists every few months? But I’ve been lucky for the last few years, and all of my medical experiences have been best-case scenarios. As Massoumi points out, things can be a little tougher when you need to find a doctor right away, or if you don’t have time to call during regular business hours, or if you’re trying to see a doctor on the weekend or the holidays. That’s the advantage of searching ZocDoc’s large database and finding available appointments on the site whenever it’s convenient for you.

This is ZocDoc’s first round of funding, and it’s impressive despite being relatively small. Khosla is a recognized name in VC. In this case, he’s expanding beyond cleantech, the area he’s been focusing on.

Here’s the latest action:

Facebook suspends RockYou’s Super Wall – The social networking site has turned off the Facebook application’s viral aspects, like invitations and notifications, presumably as part of its efforts to crack down on spammy app activity. RockYou chief executive Lance Tokuda says he’s working with Facebook to get the suspended features restored soon. The move follows the shutdown of RockYou competitor Slide’s Top Friends application at the end of June due to a security issue. (Top Friends is back up now.)

Vinod Khosla joins Obama — The famed venture capitalist spread his bets during the primary season, giving the maximum amount to Hillary Clinton, John McCain and Barack Obama. But now he has taken sides, in a way, by joining Obama’s India Policy team. The alliance makes even more sense because Khosla has been a big booster of biofuels like ethanol, and the Obama campaign is closely linked to ethanol, at least financially.

VeriSign brings back Jim Bidzos as interim chief executive –  Bidzos, who was the company’s founder and first chief executive back in 1995, is replacing William A. Roper, who resigned early last week. VeriSign manages the .com and .net domains, and Roper had been working to pare the company back down to its core focus. As for why Roper left, Bidzos says, “I don’t think it was fair to have him around while we were looking for a replacement, so he chose to leave.”

Leapfrog launches its web-based portable gaming system — With the Didj, educational gaming company Leapfrog is targeting 6- to 10-year-olds, the demographic that has embraced the Nintendo DS game system.

Vodafone buys a controlling stake in Ghana Telecom — Vodafone is buying a 70 percent stake from the local government for $900 million. The mobile network company says Ghana is one of the most attractive markets in Africa, because of its young population and low mobile penetration.

Privacy advocates like Google’s new privacy link — Google’s privacy policy hasn’t changed, but the search giant is linking to it from its main page. A number of privacy groups praised Google’s decision, albeit rather faintly. For example, Pam Dixon of the World Privacy Forum called privacy policies an “important tool” and noted that displaying such policies is standard practice among most Web sites. In other words, everyone’s glad Google made the move, but the company probably shouldn’t spend too much time patting itself on the back.

Study shows airports are a prime hunting ground for laptop thieves — Apparently, more than 10,000 laptops are reported lost each week at the United States’ 36 largest airports, and 65 percent of those are not reclaimed. In fact, VentureBeat’s own Eric Eldon had his laptop stolen at SFO earlier this year.

Sequoia Capital makes three more hires — The additions include Warren Hogarth, who will focus on cleantech; Christopher Lyle, who will focus on public market investments; and Michael Dixon, who will focus on systems and software investments. Meanwhile, David Su, one of the founding partners of Kleiner Perkins‘ China Fund, has left the venture firm for reasons unknown.

PlyMedia raises $6 million for video layers — The company, which adds interactive layers such as speech bubbles to online video, has raised $6 million from Greylock and Elron Electronic Industries, according to TechCrunch’s sources. Other interesting companies in this space include ad company Veeple and commenting company Omnisio.

Lifestream.fm relaunches with new features and German support — The lifestreaming site was acquired by the social bookmarking company Mister Wong back in April, and now it’s relaunching in invite-only mode with new support for comments, filtering, more comprehensive searches and German.

Here’s the danger in becoming a well-known venture capitalist: You may well become the locus for heated debates over cleantech and environmentalism, even when you’re not expecting it. That’s what happened to Vinod Khosla yesterday, when the Wall Street Journal lashed out with a short hit piece on his policies titled “Khosla’s Conspiracy”.

The motivator was a lengthy interview in last week’s San Francisco Chronicle, in which Khosla, asked whether biofuels are driving up food prices, agreed that they are but said the much greater problem is the price of oil used for transportation. He also suggested that a PR campaign has been organized to smear biofuels. That’s where the WSJ took offense:

Spiking food prices, global shortages and Third World riots have managed to elicit repentance from some ethanol evangelists. Not Vinod Khosla…

“Food prices have been going up,” Mr. Khosla conceded. “But there are massive PR campaigns trying to ascribe most of the blame to biofuels.” Apparently “lots of people” are behind the plot, though Mr. Khosla singled out one: “Clearly, the American Petroleum Institute has been very, very concerned about food prices, and you wonder why.”

Gosh. API is a trade group for the oil and gas industry that is radioactive on Capitol Hill. But we didn’t realize that API’s tentacles were wrapped around the World Bank, the International Monetary Fund and the USDA, all of which blame ethanol for inflationary pressures on food prices. …

Like other green venture “capitalists,” Mr. Khosla now claims that corn ethanol is merely a springboard for the cellulosic varieties, which don’t draw on food stocks. Of course, his investments in such fuels also come with their own handsome subsidies. As long as he’s on the federal dole, perhaps Mr. Khosla should take a vow of embarrassed silence.

In short, the WSJ is agreeing that there’s a PR campaign — but thinks that Khosla, rather than the API, is the master manipulator. True enough, Khosla has stood apart for his interest in biofuels, and helped make himself a strike-point for debate with several doozies, like saying last year that many hybrid-electric vehicles won’t make a difference and repeatedly insisting that corn-based ethanol is necessary to create distribution channels for future, next-generation biofuels.

But is the WSJ right in its own implied assertion that food-based biofuels are a villain? Not really. Essentially, Khosla is right: Food often moves hundreds or thousands of miles from where it’s grown to its target market, so quadrupling the price of transportation fuels over a few years’ time would have driven up prices without the help of biofuels. For its own reasons, the WSJ doesn’t deign to address that argument. Khosla, for his own part, has been bright enough to avoid investing in first-gen biofuels like corn ethanol.

To address these points, and some others of his own, Khosla issued a rebuttal, sending it to us and some other news outlets. We’re reprinting it, with editing to take out some less substantive portions, after the jump.

Read the rest of this entry »

Where is technology headed?

The Churchill Club of Silicon Valley just wrapped up one of its most anticipated events: the Annual Top Ten Tech Trends Debate. Five well-known and opinionated venture capitalists weighed in on what trends will take flight and what trends will fizzle out in the months ahead.

(The VCs are pictured, from left to right: Steve Jurvetson, Vinod Khosla, Josh Kopelman, Roger McNamee, Joe Schoendorf.)

The audience of around 300 people was asked whether it agreed or disagreed with the VCs’ predictions. I’ve ranked them below, according to how well they were accepted by the audience.

Last year’s predicted trends included a shakeout of Web 2.0 companies and the rising economic power of Brazil, Russia, India and China.

Trend 1: Customer data stored by different service providers will be combined to create more intelligent services. Josh Kopelman, managing partner at First Round Capital, a seed-stage venture fund, who founded online retailer Half.com (sold to eBay after a year for $300 million) said such customer data includes your financial records, dinner reservations, preferences in the iTunes store, random searches on Google and much more. In this way the Internet goes from satisfying explicit user needs (like searching for a friend to add on Facebook) to satisfying implicit needs (like telling who you should add and why adding them would be helpful to you).
Audience: 95 percent voted “Yes”.

Trend 2: Oil will have increasing difficulty competing with biofuels made from cheap non-food crops for transportation. Vinod Khosla (pictured left below, beside Kopelman), founder of Khosla Ventures, which focuses on alternative fuels and green technologies, said coal will become less competitive compared to reliable solar thermal and other alternative energy sources.
Audience: 90 percent voted “Yes”.

Trend 3: Water technology will replace abating global warming as a global priority. Joe Schoendorf, partner at Accel Partners, previously vice president of marketing for Apple, said the world is running out of usable water and this will kill millions more people in our lifetime than global warming.
Audience: 80 percent voted “Yes”.

Trend 4: The mobile device industry’s migration to smart phones will produce great disruption for big industry players. Roger McNamee, co-founder of Elevation Partners together with U2 lead singer Bono, and early private equity investor in technology, said the disruption will exceed what the PC industry experienced as it moved from character mode to graphical interfaces. Shifts in the competitive balance will hurt Motorola, Microsoft and probably LG Electronics, Samsung and Sony Ericsson. Apple, Nokia, Palm and RIM will do better. [McNamee's firm is an investor in Palm]
Audience: 75 percent voted “Yes”.

Trend 5: Booming market for healthy aging technologies Steve Jurvetson, managing director of Draper Fisher Jurvetson and well-known for his founding investment in Hotmail, said a booming market in such technologies will allow people in their 60s and beyond to continue working and living a good life. Every 11 seconds, a baby boomer from the 1940s turns 60. These people have time and money and are Internet-savvy, so they represent an enormous market for services like mental exercise programs and online education in various topics. It fits into a larger vision that could also include an eBay for information services that exceeds the market for physical goods.
Audience: 70 percent voted “Yes”.

Trend 6: Four-fifths of the world population will carry mobile Internet devices within five to 10 years. Schoendorf said mobile Internet devices are rapidly becoming the leading device category.
Audience: 50 percent voted “Yes”.

Trend 7: Algorithms will be constructed to develop new industrial chemicals, new biofuels and eventually artificial intelligence. This was Jurveston’s prediction.
Audience: 50 percent voted “Yes”.

Trend 8: The mobile phone is your most important device. This prediction by Khosla is similar to Trend 6, but he predicted an even more intimate connection with the phone: Mobile phone applications will extend beyond e-mailing to include a virtual credit card, your ID, access to location systems and personal information filing systems. If you lose your phone, your data on it will all be backed up on a network so that you can load it all on to a new phone. Ten years ago people thought it would be ridiculous to have a camera in your cell phone, in two years you will have two cameras per phone – one for taking photos of yourself, and one for taking photos of others.
Audience: 40 percent voted “Yes”.

Trend 9: There is going to be a venture capital shakeout. Lower costs and barriers to entry for startups will have a dramatic impact on the venture capital industry and lower returns. This was Kopelman’s prediction.
Audience: 40 percent voted “Yes”.

Trend 10: Within five years everything that matters to you will be available on a device that fits on your belt or in your purse. This was McNamee’s prediction, and it’s similar to Trend 8. This will cause a massive shift in Internet traffic from PCs to smaller devices.
Audience: 30 percent voted “Yes”.

[Photos by Cecilia Aronsson]

Here’s the latest action:

1. Bubble Video singer gets $3M
2. Bahu, a social network for European high schoolers
3. Vinod Khosla upset with California regulations
4. Technorati revises its front page yet again
5. Smilebox, a software download for sharing photos, videos and other media, raises $7 million
6. Microsoft announces display advertising on MSN Mobile
7. Competitious relaunches as RivalMap, gives you dashboard to track your competitors
8. Worst case scenario: The next Great Depression
9. Verizon to take over all your Internets

YouTube takes down “Here comes another bubble” video — Remember the fun video that circulated Silicon Valley last week, about us being in another bubble? Well it has just been taken down after someone told YouTube it violated some sort of copyright. Too bad, because the snippets in the video were so brief it’s hard to understand how any of it could be considered a rip-off. Kara Swisher posts about it all here. In fact, this weekend, we bumped into one of the singers in that video, Tom Shields (pictured left) of the Richter Scales, and he was pretty bubbly himself that the video had already got more than a million views (it hit Yahoo’s front-page); the take-down request certainly didn’t come from his side.

Speaking of Tom Shields, he just got $3M for YieldEx — While Shields’ video got hit with the take-down notice, the a capella singer has other things to be thankful for. Shields recently left his role as venture capitalist at Woodside Fund, and has founded a new company called YieldEx, which is still early, but aims to help Web site owners maximize their ad revenue. He’s mum on the details, but VentureBeat hears he has $3 million, mostly from Woodside. (See Shields’ blog here).

Bahu, a social network for European high schoolers — The Paris social network has gotten a first round of financing from Lightspeed-Gemini Internet Lab. The amount of the round was undisclosed. The site appears to have more MySpace than Facebook (it wants users to be able to promote their music, artists and writing). It said it had two million unique visitors in September.

Vinod Khosla upset with California regulations — The aggressive investor in clean-technology companies says that some of his solar and other companies are contemplating moving out of state. Details here

Technorati revises its front page yet again — Technorati, the blog search engine company, apparently doesn’t know what it wants to do. It keeps changing its face, and now looks quite similar to Techmeme, a site that focused on ranking popular blog and mainstream tech news. Technorati has raised a total of $21.6 million in venture capital across three rounds of financing. Techmeme has raised next to nothing.

Smilebox, a software download for sharing photos, videos and other media, raises $7 million — Smilebox is a Redmond, Wash. company that lets family and friends share your media inside digital scrapbooks, slideshows and photogreetings via email and blogs. It features designs from folks like Hallmark, Making Memories and others. The round is its second,and comes from Bessemer Venture Partners. It reports 1.3 million monthly users. Details here.

Microsoft announces display advertising on MSN Mobile — Paramount Pictures and Jaguar Cars North America are among the first companies to launch a campaign on the service, Microsoft said. Technology for it comes from ScreenTonic, a leader in mobile advertising in Europe that Microsoft acquired.

Competitious relaunches as RivalMap, gives you dashboard to track your competitors — We’ve covered Competitious in the past. Yesterday the company announced a new release, called RivalMap. It gives a web-based tool to manage information and knowledge about their competitors. More details at http://www.rivalmap.com and a video tour here http://www.rivalmap.com/tour/video. The company told VentureBeat several months ago it had raised angel funding. It is now looking to raise venture funding/

Worst case scenario: The next Great Depression — A diseased housing market and a weak dollar have economists and Federal officials chewing their fingernails, as evidenced by the latest quarter-point rate drop in interest rates, designed to stimulate the economy by making borrowing cheaper (thus encouraging spending). Predictions of recession are also on the rise, but just how bad could it get? If you’re prone to worrying, don’t ask Overstock.com CEO Patrick Byrne, who thinks we might be on our way back to the Great Depression. Better drop the Web 2.0 stocks and start investing in those canned food startups, if he’s right. More on his ideas from GigaOm.

Verizon to take over all your Internets — Verizon, which is one of the country’s major internet service providers, has deepened its re-direct scheme, where it seeks to exploit mistakes by users when they are typing in words by redirecting them to pages filled with ads where it can make money. The ISP is now hijacking valid attempts from users to reach web pages through simply typing in a domain name, e.g. simply typing ‘google’ in the site bar. They’ve also made the opt-out process nearly impossible, according to ClickZ. The re-directs lead to pages with Verizon’s own advertising. This comes after Verizon was forced to stop its earlier “Site Finder” initiative.

Vinod Khosla, a well-known venture capitalist and one of the most prolific investors in green technologies, has declared personal war on oil and coal.

He also thinks the environment can be helped by stressing efficiency and finding breakthroughs in new materials.

But hybrid electric cars won’t succeed, he said in an interview. You have to pay $5,000 more on a Prius in order to save half a ton of carbon a year, which is more than most consumers will go for, he explained. Buying hybrids “is mostly about personal guilt trips.” It’s like wealthy investors giving money to “art museums instead of to starving people” in Africa, he said.

“Are electric cars going to make a difference any time soon? No. Are they going to be material? No. If something costs $2,000 more, nobody buys it.” He said these cars are likely to get a one percentage point market penetration. “It’s not going to be reach the average person in Mississippi. That’s what I call my Mississippi test.”

His remarks are significant because numerous auto-makers are in the process of making hybrid-electric cars, or cars that run only partially on gasoline. Others are making fully electric cars, and several are venture backed. Google has added to the excitement by awarding money to green transportation ideas. Tesla is making a sports car electric vehicle, and has lots of venture backing. It’s hard to hear above the buzz. Zealots of a three-wheel electric car made by Venture Vehicles recently severely criticized VentureBeat (see comments) for questioning the look and viability of the three-wheeler after it got venture capital.

Some have criticized Khosla for driving an SUV.

Khosla also singled out wind power, saying it is in the same camp as electric cars. Utilities are dabbling in the sector, using wind for between one and two percent of their grid capacity. “But they think of it as a tax,” Khosla says.

Instead, Khosla been making some huge bets on solar, ethanol and bio-fuels.

Ausra, an ambitious Silicon Valley company wanting to build a solar thermal electric power plant double the largest ever built, has raised somewhere north of $40 million in a first round of capital.

However, just as Ausra was preparing to make its announcement Monday that it has applied for a permit to produce a record 175 megawatt plant, its Oakland Calif. competitor, BrightSource, stole some of the thunder late last week by saying it has applied to build a larger, 200 megawatt solar plant and two smaller ones.

The Ausra investment is significant, though, because it’s the largest best so far made by Khosla Ventures, the firm started by successful venture capitalist Vinod Khosla. Khosla has made dozens of investments in the area of green technology, but the size of his bet on this technology reflects his enthusiasm for the Palo Alto, Calif. company, he said. He invested $25 million of the total.

Another top venture firm, Kleiner, Perkins, Caufield & Byers, joined in the investment too.

Solar thermal is different from photovoltaics, the popular technology used for residential solar power. Ausra’s solar thermal technology uses large mirrors, made of steel and glass, to concentrate the sun to heat water into steam. (See Forbes’ explanation of how the two processes are different). Ausra’s process drives a turbine with the steam, to generate electricity. Notably, the energy can be stored in pressurized tanks, so that electricity can be generated day or night. The electricity can also be transported for long distances. In an interview, Khosla and Executive Vice-President John O’Donnell told VentureBeat that if a 92 square mile region of Nevada were covered with the technology, Ausra would be able to fulfill the nation’s entire electricity needs. (They are actually half-serious about this being a possibility, pointing out that much of Nevada’s land is owned by the federal government. Only 10 percent of that land would be needed.)

The technology has been around since the 1990s, when Ausra’s founder David Mills, conceived the idea at Sydney University, and worked on it with scientist Graham Morrison between 1995 and 2001, but Ausra was formed late last year. Khosla and Kleiner Perkins’ Ray Lane met with the company and moved it to the U.S from Australia.

The idea is to help California utilities meet requirements to install 17 gigawatts of clean power by 2020.

Within a year, Ausra will match the price of natural gas plants, which generate electricity at about 9.2 cent per kilowatt hour, O’Donnell said. Within three years, it will match the cost of coal-fired plants, which is about 6 to 8 cents per kilowatt hour (without clean coal processes such as carbon sequestering or gassification). Existing competing solar plants, including one in Nevada, generate electricity at between 16 and 22.4 cents per kilowatt hour.

Among Ausra’s competitors is Brightsource, formerly named Luz II (which we covered here), backed with $30 million from VantagePoint Venture Partners and others. The difference is that Ausra has cut the cost of producing the solar reflecting mirrors — making them on a mass production line, in return for slightly less efficiency, says O’Donnell. (Here’s a Pdf presentation about the company, including a look at its technology.) Ausra said it wants to build a 175 Megawatt plant, more than twice as large as the reigning champ, an 80 megawatt plant in the Mojave desert built in the 1990s.

Other players include France’s Acciona Energy, which recently raised $266 million in debt-and-equity project financing facility to cover the capital costs of constructing a 64-MW solar thermal plant in Nevada (see overview here), and Seville, Spain’s Abengoa Group, which has built a plant in Europe. There are several other smaller players, too.

Last week, we pointed to the teary-eyed speech by the well-known venture capitalist John Doerr, arguing for ways to stop global warming.

Now here’s his famous former parter, Vinod Khosla, who left Kleiner Perkins two years ago to invest aggressively in alternative energy, speaking on biofuels.

This is worth watching. He is introduced by Larry Page, co-founder of Google, which Kleiner Perkins backed when it was a tiny company. Page explains that was a skeptic about biofuel until he was converted several months ago by Khosla and Richard Branson. Branson burns $1 billion of fuel a year, and feels bad about it, and sees biofuels as a good alternative, Page explains. It’s a long video: 1hr 8min.

For RSS readers, a link is here.

Mark Wendman has posted the related powerpoint.

In separate, but related: Acumentrics Corporation, a Westwood, Mass. company, has built a solid-oxide fuel cell company that runs on pretty much anything: natural gas, propane, ethanol, diesel, biogas, and biodiesel. It consumes half as much fuel as a comparable small-engine generator, per kW, and produces half as much CO2 while doing so. We haven’t looked into this company yet, but are relying on a story by Treehugger.

FatKat is the latest company aiming to make sense of the exploding amount of information on the Web and elsewhere to help you make better investment decisions.

It has yet to launch, but the Wellesley Hillis, Mass. company is worthy of mention because it builds on work by technologist Ray Kurzweil, who has given substantial thought about future trends. It is also backed with $2 million from some well-known investors, including Silicon Valley venture capitalist Vinod Khosla and former Nasdaq chairman Michael Brown, according to PEHub.

That said, there is no evidence that Kurzweil and his backers can apply his prolific inventiveness to push things forward in the already advanced field of “quant” investing, which is the area FatKat is targeting.

Quantative investing is already applied an estimated trillion dollars of market funds, and the trend is expected to grow, the company says on its Web site. Such investing consists of using math and science to recognize patterns in stock market developments, and then using algorithms to make investments based on those patterns. Here’s the company’s summary of quant investing to date. FatKat appears to want to pull big names and minds together, and build a technology that boasts just enough of an advantage that it can convince investors to use it.

The latest investment is part of a $2.4 million third round of financing by the company, according to a regulatory filing. Other backers include Teradyne co-founder Alex d’Arbeloff, funds controlled by Revolution Health exec and nanotech expert, and Zyvex CEO James Von Ehr, PEHub’s Alex Haislip reports.

Latest round-up in the world of tech:

Defense Department’s Grand Challenge moves downtown — The great annual race of robotic cars, until this year held in the desert, is moving downtown. The DARPA-sponsored event awards the winner $2 million. Unmanned vehicles will attempt to avoid people and buildings instead of boulders and sagebrush, with no remote control or other human interference. (See Merc story here.) The goal is to help the Defense Department fulfill a Congressional mandate: that one-third of combat vehicles be unmanned by 2015. Guess this is a sign of the times: While the U.S. military rolled through the Iraqi desert with no problem, managing street warfare is more of a challenge. Meanwhile, a Jon Feiber, a venture capitalist sponsoring one of the competition’s entrants, suggests the project could help with traffic congestion. Another possible payback my be fuel efficiencey, if cars are pacing themselves at optimal distances from each other, and at optimal speeds.

Speaking of traffic, look at Wikipedia’s — Google traffic going to Wikipedia is exploding, with Wikipedia now the No. 3 website in Google’s downstream, after Google Image Search and MySpace, according to HitWise. That’s phenomenal, for a non-profit company that has less than ten full-time employees (Ars Technica has good summary. It’s costly, too. Wikipedia’s bandwidth this year is expected to cost up to $100,000 a month, and it’s running more than 350 servers. With annual costs at about $5 million a year, but incoming donations at barely $1 million, something might crack soon — the company says it only has three to four months of cash left. Put two and two together: If Wikipedia’s getting that much traffic, all is has to do is put up a few Google ads. If anything, Google will look more favorably at sending even more searchers over to Wikipedia — and monetizing the site would be easy. We don’t know founder Jimmy Wales’ personal motives, but publicly at least, he’s proclaiming he doesn’t want to let ads onto the site.

Fancy that, hedge funds are actually useful — The NYT cites a study showing that hedge funds boost the value of companies they invest in, at least in the very short run, on average, and holding on to the gains for at least a year.

For the green tech fans — William Hudson writes an engaging piece about the challenges faced by ethanol and other forms of alternative energy. He concludes with what we all should know, i.e., that the sun is where the magic is. Future breakthroughs will be around how we harness its immense power. That’s why investor Vinod Khosla is pitching the benefits of solar lately, and this goes beyond the solar panels we traditionally associate with solar.

Visto gets $35 million more, to sue? — When we asked the mobile messaging company Visto last Wednesday whether the Redwood City, Calif. company could comment on reports it had gotten $35 million more in venture capital, a spokeswoman said she couldn’t comment on “speculation.” Two days later, on Friday, the company issued a press release confirming the investment. So why was Visto so secretive, seeking to avoid acknowledging the December funding? Well, as Valleywag points out, the lead investor, Altitude Capital Partners, turns out to be a specialist in investing in companies with patents and “historical litigation.” We’ve already mentioned how Visto appears to be going down litigation path. It hasn’t made money in ten years, so perhaps this is the only way?

New York is back — Here’s a good story about New York’s reemergence as a technology hub, given its weight in the publishing and advertising worlds.
This, though, after the NYT recently wrote about Silicon Valley as the new hegemon.

Sparter, offers virtual currency trading — While auction giant eBay decided to ban sales of virtual property, there’s a new company, called Sparter, that is stepping in to let gamers trade virtual currency. The company has received venture capital funding from Bessemer Venture Partner, and while it wants to work with IGE, a service that lets gamers trade in their virtual currencies for one game in exchange for another, Sparter apparently wants to also let you bypass IGE, letting you trade directly with other gamers. (Via Virtual Economies.)

Latest green technology developments:

Vinod Khosla is rocking after barely two years — Khosla (pictured below), the Silicon Valley venture capitalist who hit it big during the telecom boom in the 1990s, turned two years ago to embrace green technoloy. We thought his outlandish bets on untested technologies such as celulosic ethanol - which most experts caution will be only be commercially viable in two years, at the earliest — would take some time to show results.

Yet his investment in Cambridge, Mass.-based Celunol last year (we believe it was May; we’re checking) as part of a $60 million venture capital round, has already yielded fruit. San Diego’s Diversa just bought the company for about $182.45 million. Cellulosic ethanol is a process that uses non-food plants and other waste to make ethanol, and it is much more efficient, and thus better for the environment, than regular corn-based ethanol.

This is good news — and it’s bound to set a wave of green-colored VC lemmings in his direction.

This will too: Boston’s EnerNOC, an other energy company, has filed for a $100M initial public offering on the Nasdaq. It helps manage power supply and demand on the grid, helping make it more efficient. The company had raised around $28 million in funding since 2003 — from Foundation Capital, Draper Fisher Jurvetson, Braemar Energy Ventures and DFJ New England — another solid result.

Green tech investments tripled last year.

Update: George below rightly points out there were other invetsors in Celunol besides Khosla Ventures. Others wre Braemar Energy Ventures (yep, same Braemar that backed EnerNOC), Charles River Ventures and Rho Ventures.

Update II: We’re still waiting for public documents to confirm how long Khosla and other investors will have to hold their stock (see comment below), but we’re told it is six months. Moreover, we’re told Khosla made about five times his investment in the company, and that he first invested about two years ago (keep in mind that he invested in a portion of the $60M, and that some of the $60 million my have included prior money before the company was restarted by venture investors).

As for the Diversa-Celunol merger rationale, here’s what we’re hearing: You need three components for biochemical cellulosic process: a) pretreatment b) efficient bugs and c) low cost enzymes. Celunol provides technology for the bugs (from University of Florida research), while Diversa provides low-cost enzymes.

Green activity continues at a torrid pace, from expansion by green investors like Vinod Khosla into bigger offices, to the embrace of green business models by struggling telecom companies. Are we getting a little heated?

Khosla finally leaves Kleiner nest — Vinod Khosla (pictured left), one of the most successful venture capitalists during the telecom boom of the late 1990s, split from venture firm Kleiner Perkins a couple of years to go out on his own, launching Khosla Ventures. Until now, though, he’d stayed in a back office of Kleiner Perkins’ digs on Sand Hill Road. Now, having hired several partners, and adding two more employees recently, Khosla is finally leaving — into bigger offices. He’s making way for Steve Westly, the former eBay exec and state Controller, who is taking over the back office with his new investment firm. All three — Kleiner, Westly and Khosla — are targeting green technologies.

And when the big guys go green, so do lots of others — Zolo Technologies, once a struggling optical communications companies, has reinvented itself as a clean technology company. The Boulder, Colo. company just raised $12.5 million more from its original Silicon Valley investors Canaan Partners, Crescendo and Morgenthaler, among others, to help it sell sensors that make coal-fired power plants more efficient.

Targeted Growth raises $22.3 to boost yield for fuel crops — The Seattle company has patents for technology that boosts the yields in crops such as corn, soy and canola, so that production of renewable fuels like ethanol and biodiesel doesn’t hog as much of the human food supply.

Nicely colored fluorescent bulbs? — Several people reading our recent piece about the energy benefits of fluorescent blubs complained about their bluish-white color. Assemblyman Lloyd Levine, who is proposing legislation to phase out regular incandescent bulbs, responds that Wal-Mart and Home Depot carry plenty of colors to “please just about anyone.”

Green limousine service arrives in Silicon Valley — PlaneTran, a Boston company, has just opened operations in the valley to allow executives to call up a hybrid Prius to chauffeur them around, to the airport or on other tasks — instead of a regular limousine, which can guzzle up to four times as much gasoline. Here’s the story.

Silicon Valley venture capital firms like Kleiner Perkins Caufield & Byers, and lone ranger investors like Vinod Khosla, continue to push for legislation that irks the oil industry.

The New York Times has the latest, citing Kleiner Perkins’ partner John Denniston (pictured here) arguing that renewable biofuel companies like Altra should get some of the subsidy for gas alternatives, and that it shouldn’t all go to the oil industry.

Mr. Denniston also wants to see a change to the so-called blender’s credit, a 51-cents-a-gallon subsidy that goes to the company that mixes gasoline with ethanol, typically one of the major gas companies. He would like that money to go to producers like Altra. And he wants the subsidy to rise when the price of oil falls, or drop when oil prices rise.

Not surprisingly, the oil companies are not ceding any turf. Edward Murphy, group director for refining and marketing for the American Petroleum Institute, an industry trade group, said the venture capitalists were “somewhat naïve”…

Tortilla prices are going up, causing hardship for the poor in Mexico, apparently because of all the use of ethanol in the U.S.

The U.S. is making lots of ethanol out of corn, to use as an alternative to gasoline — creating a shortage of corn for people wanting to make tortillas. Indeed, there some 100 more ethanol plants being planned, which will eat up even more corn — and this comes despite doubts about whether using corn ethanol for environmental reasons is really worth it. It has marginal benefits.

Besides, UC Berkeley’s Tad Patzek has long warned there isn’t enough land to grow all the needed corn, and that continued production could lead to grotesque and obscene environmental destruction.

At the same time, as we’ve discussed before, the infrastructure corn ethanol production creates may be helpful, because it paves the way for the efficient distribution of the different cellulosic ethanol, which can be made from waste, residue and plant parts other than the corn kernel itself — and is much more beneficial to the environment. In other words, the corn ethanol boom is a stop-gap measure which, while costly in the short-run, could lead to huge paybacks in a few years. (See the argument of Vinod Khosla here). Although, even here, Patzek appears to disagree; there’s not enough land to produce these alternative plant sources, either, he says.

Other notes on the “global warming” front:

–Oil and gas industries are still getting subsidized, too, which helps make those fuels cheaper, and so provides less incentive to find alternatives. House Democrats are locked in a fight to change that.

–Meanwhile, a promising bipartisan climate change bill has just been introduced by Senators John McCain (Rep.) and Barack Obama (Dem.). This is significant because they’re both strong candidates for the U.S. presidential elections next year. It calls for mandatory caps on greenhouse gas emissions from power plants, industry and oil refineries.

The legislation would require that US greenhouse gas emissions be cut by 2% every year. The senators say that as a result of these cuts, emissions would drop back to 2004 levels by 2012, and to 1990 levels by 2020.

By 2050, the equivalent of 2100 metric tonnes of carbon dioxide would be emitted each year, down from 6100 metric tonnes in 2004, they say. In contrast, the United Nations’ Kyoto Protocol, which the US has not ratified, requires that parties return their emissions to 5% below 1990 levels. Whether or not this Kyoto target will be sufficient to avoid a global temperature rise of 2°C • often used as a threshold beyond which the world would face “dangerous climate change” • is cause for debate.

Slide, the San Francisco start-up that lets you create slide shows from your photos or other content, has raised a large third round of funding from Khosla Ventures and Mayfield Fund.

The amount remains undisclosed, but we’ve heard it is more than the company got for its second round, which was $8 million. That gives the company near or north of $20 million in total funding, putting it comfortably on the list of best-funded Web 2.0 companies in Silicon Valley — and apparently making it the biggest of any of the latest generations of photo-related sites.

The site lets you push slideshows, onto your blog for example, or to share your favorite photos with friends and family. But it also lets you pull them, accepting a slideshow of images fed from your friends