That means that customers of many popular international online retailers may soon begin noticing increased relevance in offered recommendations and more tailored virtual storefronts based on their shopping preferences and habits.

RichRelevance helps retailers increase sales and customer engagement by recommending the most relevant products to customers. It delivers over one billion product recommendations daily and the company boasts a client base that includes Walmart, Sears, and Target.

The San Francisco-based company’s strategic acquisition gives it an immediate presence in several new countries, including India and Australia, while also increasing its client base by over 80 companies. Argos, La Redoute, and Halens are among the companies joining RichRelevance’s client roster through this transaction. It now has customers in 29 countries.

“The combination of RichRelevance and Avail brings tremendous value to our clients in the EU and around the world,” said David Selinger, chief executive of RichRelevance, in a statement.

“Global retail is undergoing a sea of change, and there has never been a more exciting or interesting time to be in the retail sector. Tremendous shifts in consumer behavior have put pressure on retailers to adopt new high-impact strategies driven by technology, data and measurement. This acquisition rounds out our ability to support the complete topography of our retail partners’ needs in the EU and across the globe,” he said.

The combined company ranks first for personalization in both the Internet Retailer 500 and Internet Retailer EU250.

According to the company’s press release, it is planning on keeping key Avail executives and talent throughout the company, from engineering to finance. Avail’s chief executive Pontus Kristiansson will continue to guide strategy and oversee daily operations of his company.

Scope Capital and Headwaters MB acted as financial advisors to Avail during this transaction. The acquisition price was not disclosed.

Image credit: RichRelevance

That’s going back to the future, according to Monetate: going back to a time when all commerce was personal.

But there is a yin and a yang here.

While we may want personalized experiences, and we want websites to be smart — to know us, essentially, and act as an intelligent, solicitous person might — privacy is part of the picture. A good third of us don’t want our website activity tracked, and a quarter of us don’t want the websites we shop to personalize our experience at all.

Monetate has four tips for online retailers:

1. Use marketing automation technology and big data to assist with personalization
2. Target segments with relevant content based on what you know about them
3. Don’t think of channels, think of customers first
4. Be in it for the long haul, not the quick win

All the data, in visual form:

photo credit: crsan via photopin cc

“We’re driving multiple billions in value on an annual basis,” RichRelevance CEO David Selinger told me on the phone yesterday. “Generally, we provide a 3-15 percent increase in revenue for our customers, and one recent client — a top-five Internet retailer property saw over 11 percent revenue lift.”

How?

Selinger, who led Amazon’s product personalization engine team, calls RichRelevance’s secret “ensemble learning.” It’s a machine learning engine that observes what people buy over time, as well as what they shop, but don’t buy. By seeing trends both within individual shopper’s buying experiences and across multiple shoppers, RichRelevance makes smart recommendations that are likely to appeal to buyers, thereby boosting its clients’ revenue. Other companies in the space include companies like PredictiveIntent and Barilliance,

A billion product recommendations a day is a significant milestone, and with 73 percent revenue growth and 43 percent customer growth in the past year to go with it, the company is hiring a new president to help increase growth.

“We started the year with about 150 people, and have already grown 20 percent in head count,” Selinger says. “We’re growing quickly, but the amount of opportunity in front of us is growing even quicker.”

Eduardo Sanchez, formerly the executive vice president of Microstrategy and of Lawson Software, and chief operating officer of Cartesis, was about to start his own data-based recommendation engine, but he realized the space was growing too fast. So he decided to join them rather than beat them, according to Selinger.

Image credit: Shutterstock/Buying online

Path announced this morning that Path 3 is now available, and the focus is the the type of intimate, free-form communication that happens in person. As the private social network says, “There is so much more than words that pass between us. A smile or nod or encouraging gesture – these allow for true connection and understanding.”

To enable that in a more organic — and non-Facebook way — Path has introduced private messaging. Despite the name, it can be used for both one-on-one and one-to-many communication, but the defining characteristic is that it is very free-form. Ye good olde fashioned text or photo-based status update looks almost a little limited in comparison.

A brand new language?

In the new Path, messages can be text or photos (of course) but also voice, location, a cartoon-style sticker or badge that communications your emotions of the moment, a song, a book, a video, your location, or even a movie clip you’ve found online.

In other words, just about anything but the pat on the back.

And a brand-new monetization

One of the new communication channels Path is adding is stickers, kind of a next-gen emoticon.

“These are pieces of art to be used in messaging. They are expressive and fun, and they communicate what words can’t,” Path says.

You get two free “packs” just for being a Path member, but other packs are available as well, at extra cost. Some of my favorites are designed by Hugh McLeod of GapingVoid fame, but stickers from other artists such as David Lanham and Richard Perez are also available. Path didn’t release any pricing information yet.

The new version of Path is available immediately for iPhone, and “coming soon” for Android.

Marc Price is Openet’s CTO for the Americas.

In today’s day and age, consumers like personalization. From tailored music selections on MP3 players to customized ringtones, people know what they want when it comes to digital content, and how they want to enjoy it.

It won’t be long before television is no different from music services, either. In fact, it’s already happening. An everyday task like watching TV will soon become personalized with the introduction of technological advancements such as flexible ad insertion systems that personalize TV commercials, and new TV platforms, like Airplay via Apple TV, that deliver “long-tail” video content to all screens – the big screen, tablets, smartphones, and more.

Here’s why consumers will embrace a personalized TV experience:

An enhanced user experience

Soon, you’ll be able to request that your TV turn off commercials you despise and instead, play commercials you may actually want to watch, tailored to interests you choose to share. If you don’t have a cat, do you really want to watch ads for cat food? This applies to both live TV and time-shifted TV, where sometimes ads are no longer appropriate to recorded content. Imagine watching a show on your DVR, and being able to decide you don’t want to watch a commercial for a “sale on cars this weekend only” when the show was recorded last week. Gracenote is already set to bring this level of personalization into your living room, having debuted its ad replacement system at CES this year and is expected to ship hardware by the end of 2013.

Better service

Consumers distrust big brother when they don’t understand, or have control over, what data is being used, or how. Personalized TV services will take off when there are clear details around opt in and opt out mechanisms regarding how consumer data is to be collected and leveraged in creating a better service experience. For example, details have emerged on Intel’s smart TV platform that is said to display targeted ads based on facial recognition, gender, age range, etc. Although it won’t capture information down to the individual level, the general concept still has people skeptical. The more opt in and opt out elements that are placed under users’ control, the more they will be used, to the benefit of the consumer and the industry alike.

Consumers will be in the personalization driver’s seat

It will soon be possible for consumers to set up their own TV viewer profiles based on what they care about. And this is not just for ads! Consumers will be able to change their TV viewing experience around the electronic programming guide, recommendations, and even how search works and prioritizes responses. Apps like NextGuide from Dijit are currently available that enable users to find and browse shows on TV and online that are relevant to their interests. This concept, and the current apps available, will make content discovery of more relevant programming easier, as well as improve relevant advertising.

Tailored delivery of ads based on specific devices

As consumers add more devices, the personalized TV experience will make it possible for tailored ads to be delivered in customized ways to each of these devices. Consumers’ appetite for ads on mobile devices is not the same as for the living room TV. Mobile, despite rapid growth, accounts for just 1 percent of total ad spending worldwide, according to eMarketer. Advertisers will gain a channel to more devices, as opt-in mechanisms enable more sophisticated users to decide what is acceptable to achieve the right service experience at the right price. At the same time, measurement across devices can be centralized. Tailored delivery will ultimately improve the user experience, reducing total ad time, and reducing or eliminating ads that aren’t relevant. This also provides value for service providers, enabling ads on platforms beyond the living room TV, and enabling comprehensive measurement – inclusive of broadband/online and mobile channels – an elusive goal today. Inevitably, consumers will soon be able to interact with brands on the devices of their choice.

Final word

Personalized TV is better TV, as the concept enables you to find and enjoy the content you want, on the devices you want, and with more relevant advertising when you want it. Soon, the days of six straight commercials focused on medications for seniors’ ailments during the 6 o’clock news will be a distant memory. Technology allows us to live in a world where one size does not fit all, and that includes television.

Original TV Image via zayats-and-zayats/Shutterstock; Illustration by Tom Cheredar

Marc Price is the chief technical officer for the Americas at Openet, and has more than 20 years of experience working extensively with customers to define strategies and deploy world-class solutions for mediation, charging, rating, billing, and policy. He has helped some of the largest North American and European service providers to achieve business success. Before joining Openet, Marc was the lead software architect for a market-leading convergent real-time rating and billing system for service providers. Marc holds degrees in mechanical engineering and international relations from the University of Pennsylvania.

You chose one of three or four channels, spent your money, and hoped for the best. The awesome and awful new digital reality, however, is that the number of channels is now infinite, and customers interact with you in multiple separate ways. Good luck tracking your spend, understanding who you’re contacting, and determining your overall return on investment.

That’s a problem that companies like CrowdTwist are starting to address.

“In the last 10 to 15 years the ecosystem has exploded,” CrowdTwist CEO Irving Fain told me last week. “There are new channels popping up every week, and consumers are spending time with brands in new places … engaging with brands like the Miami Dolphins across eight to 10 channels, which makes them look like eight to 10 people.”

So what CrowdTwist does is aggregate those channels, and the people in them, so that brands know that Bob, Bo, and BJ are all one person, creating value for your brand by tweeting about you, sharing you, and pinning you. It starts with a loyalty program, which CrowdTwist provides as white-lable software-as-a-service for organizations like the Dolphins and the X Factor.

People join the program and connect their social media identities, helping the brand see them as one individual. Why? They get points, which lead to discounts and special retail offers. But they also get exclusive access to opportunities that others can only dream of.

“We had fans that helped bring the American flag out into the Dolphins’ stadium before a game and meet them team,” Fain said. “One flew all the way in from California. These are rewards you just can’t buy.”

Knowing who your customers are is important, but knowing what they’re doing is even more important.

Loyalty program on steroids?

“Loyalty programs were created to measure consumer impact,” Fain says. “But the only point they could identify me was when I spent money. So there was a 1:1 correlation between dollars spent and customer value.”

That doesn’t reflect a customers’ true value when you take into account word-of-mouth, social sharing, and the impact that one customers can have on two, five, or a hundred others. So CrowdTwist has created what Fain calls an “Impact Score,” which measures individual consumers’ impact on a brand, beyond their spend.

“In one program, the average spend was$45,” Fain told me. “One woman spent $43, so in a traditional program you would have just ignored her — she was completely average. But it turned out she had impacted over a thousand dollars all on her own.”

Once you find super-sharers like that woman, Fain says, you can start to create “look-alike” models by finding common trends around those consumers, creating profiles of what they look like, how they act, where they are, who they are. And then you can focus your marketing dollars, retention efforts, and campaigns on those who are most likely to “infect” others.

“In one example, a consumer that checks in on Foursquare at Zumiez spends five times more than others,” Fain said.

Second screen

Understanding your customers and where they are also helps you understand where to meet them.

“The second screen becomes another touch point in which consumers and fans are engaging with the brand on a day-to-day basis,” Fain said. “We want to measure that.”

For X Factor, mobile app usage grew from under 40 percent in week one to over 60 percent by week two. Fans “syncing” their apps to the show increase almost 20 times during the first hour of the live show, as fans unlocked bonus features and content.  ”The X Factor did a really strong job of integrating mobile into the show, and then we were able to provide Fox with the data to let them know what worked and what didn’t work,” Fain says.

The Miami Dolphins provided an interesting insight into fan behavior. CrowdTwist saw an “enormous” uptick in site traffic before the games, but during the game, most of the traffic — and the chatter — moved to the social networks: Twitter and Facebook. Traffic dropped, but social mentions were up. Then, after the game, fans returned to the website for analysis, video highlights and interviews, and more.

“Watching sports is a fundamentally social endeavor,” Fain explains. “Prior to the game it’s about personal information, content, consumption … then when the game actually starts to happen it becomes a social endeavor — relating with other people. Then after the game, people return.”

The goal is personalization

All this aggregation of social data, web data, app data, and personal information sounds like classic big data: vast, impersonal, and perhaps even clinical. But the focus and the plan is actually quite different.

“It’s really about aggregating the information across all these systems and bringing it back to individual people … about actually improving personalization,” Fain says.

If you know that a customer who checks in spends more, you can spend some time saying hello and getting to know him or her. (How many store and restaurant managers actually know who is the Foursquare mayor of their location?)

And if you know that Bob and BJ are the same person, you can send him one message, not two, and be much more aware about what he already knows about you, and does for you. Which means you can, essentially, be more real and personal.

At least in theory. Once you’ve got this data, the really hard work is using it well.

photo credit: Haags Uitburo via photopin cc, San Diego Shooter via photopin cc, Ernst Vikne via photopin cc

Startups often say their technology will change the world — a claim that seems wildly optimistic at best.

But step into the San Francisco offices of Change.org, the online petitioning site that is arming ordinary people with the tools to start revolutions, and you’ll be swept up by the mission. You won’t be alone. The movement is about 25 million people strong and is growing at a rate of 2 million memberships per month.

Can an individual spark a revolution?

Governments and corporations, they say, will be forced to listen if hit by thousands of signatures on Change.org, an army of Twitter and Facebook fans, and a few well-placed newspaper articles.

I meet Ben Rattray, the company’s charismatic CEO (pictured above), in his corner office. He’s weary from frequent travel: we joke about the “networking opportunities” during the red-eye flight from New York to San Francisco on Sundays. It’s typically jam-packed with tech execs returning from East Coast trips.

Directly behind his chair, a single photograph is framed in an otherwise sparsely decorated room. It’s the face of Molly Katchpole, the 22-year-old nanny who took on Bank of America. In November 2011, Katchpole’s victory was affirmed when 300,000 people signed her petition and the bank dropped its new $5 monthly debit card fee.

This is one of many recent campaigns that caught the attention of the global media. On Change.org, a trio of high school girls secured CNN’s Cindy Crowley as the first female presidential debate moderator in 20 years. One of the site’s members rallied hundreds of thousands of people to put pressure on the South African government to crack down on “corrective rape,” a term used to describe the horrific practice of a man raping a lesbian with the aim of ‘turning’ her heterosexual.

Something has shifted in recent years. Political activism is no longer the realm of the youthful and naive. Obama’s election and re-election were fueled by social media, and protests against SOPA and PIPA were staged on Twitter. Social media has created a culture of transparency that is making a site like Change.org truly effective.

“The strong thesis we hold is that people aren’t born apathetic, they are trained to be,” said Rattray.

“If you show them that their voice matters, you can radically change behavior.”

The company is hiring at a rate of two people per week and forecasts revenues of $15 million this year.

The blurry line between profit-making and change-making

And this is where Change.org has faced some criticism. Some say the company has crossed the line between change-making and profit-making; Clay Johnson, author of “The Information Diet” told the Wall Street Journal he has “huge problems” with the site as it is a “lead-generation business disguised as a social-change organization for whoever is willing to pay them for the email addresses.” He continued, “It’s dangerous to monetize ‘change’ because there’s an economic incentive to sensationalize.”

Certified as a B Corporation, the company makes its money through their cause-based ad model. For instance, the World Wildlife Fund might place a sponsored ad on a campaign that supports the environment, or might pay for Change.org to promote an existing campaign. It’s not dissimilar to sponsored tweets or sponsored links on Google.

Rattray claims the company is less concerned with the profit motive than with maximizing impact. To deflect critics, he uses the example of an ongoing engineering project to build a mobile offering that can be deployed in developing countries. This is not intended to make money.

He says Change.org, as a revenue-generating and angel-funded business has been able to offer its employees a competitive salary and benefits. Meanwhile, nonprofits are struggling to hire and maintain talent.

Why work at Change.org?

This week, the company brought on a high-profile CTO, Tom Hughes-Croucher, to lead the engineering efforts. The new hire has a strong reputation in the open-source community, and has worked as a technical evangelist at Joyent and Yahoo.

On the engineering roadmap is a plan to incorporate machine learning so members will be matched instantly to a petition based on their pre-existing interests.

“I’m really excited to be starting at Change.org because I know we have such an amazing opportunity to have an impact on the world here as well as some really interesting engineering challenges that come at the scale we operate,” Hughes-Croucher said.

Still, the company has not been able to lure quality engineers that are interested in a sky-high salary and large chunk of equity. “Eighty percent really care about the equity upside and a massive exit,” Rattray told me. “For the 20 percent that care about the mission, we are the fastest growing company in this space.”

The company has openings in communications and marketing, business development, customer support, and engineering. Check out the full list here.

“Startup culture” is a new series that highlights what it’s really like to work at a Bay Area startup. We’ll be profiling a startup every two weeks. Please send your suggestions for the most rockin’ office spaces, startup happy hours, or company perks via email (christina@venturebeat.com) or Twitter (@chrissyfarr). 

Gravity is inescapable, especially if we’re talking about the content personalization startup that goes by that name.

Three-year-old Gravity has secured $10.6 million in new funding to expand more rapidly and bring its so-cool-it’s-creepy personalization technology to even more publishers.

Founded in 2009, Gravity performs semantic analysis on social updates and trending topics in aggregate to automatically identify a person’s interests. That data is then used in tools that help publishers make content recommendations, customize homepages, display viral stories, or serve ads.

“We’ve always believed that digital experiences shouldn’t be one-size-fits-all,” CEO and co-founder Amit Kapur said. “The next major shift beyond the social web will be the personal web. Gravity’s platform helps drive that evolution by helping every website and application tune itself for you and deliver you content you’ll love.”

Gravity, which competes with Facebook in some respects, currently serves up more than 25 million content recommendations to more than 200 million people. Partner publishers include CNNMoney, The Wall Street Journal, and TechCrunch.

The Series B round was led by GRP Partners; existing investors Redpoint Ventures and August Capital re-upped in the round. Gravity has raised more than $20 million in funding to date.

Gravity image via Shutterstock

Nara.me is a Cambridge, Mass.-based brain trust of astrophysicists and neurosurgeons dedicated to creating “a more personal, actionable, and liberating web to achieve a life well found.”

It’s also a startup that’s just sealed a $4 million first round of funding — quite the healthy amount in today’s venture capital climate.

It is moreover a nifty web app that aims to make the Internet more personal, more useful, and more interesting for each individual by organizing information the way the human brain organizes it. Currently, Nara is starting out by organizing 50,000 restaurants in 8 cities. In the near future, that data set will be expanded.

“The plan is to perfect restaurant recommendations and expand soon into other lifestyle categories — hotels you should stay at, concerts you should attend, wines you should try, etc.,” a Nara rep told VentureBeat via email. “The scale and potential for this technology and brand is limitless.”

Here’s a nice little demo video showing more of what that means:

“Nara is all about ‘finding,’ not searching,” said Nara CEO Thomas Copeman in a statement today. “The Internet should work for you, not the other way around.”

“With Nara’s brain-like learning algorithm, we’re able to transform the search process so that the computer can identify and organize things on the web that are more relevant to you,” said Nara CTO Nathan Wilson. “Our patented algorithm and personalized search platform are truly unprecedented in the market and represent a new direction for machine intelligence compared to some earlier approaches.”

Nara was founded in 2010. Its team is, we are told, “a collective of computer scientists, creative artists, neuroscientists, astrophysicists, and technology and Internet veterans.” The company is advised by executives from companies such as Expedia, Intuit, and Sprint.

The startup’s funding has come from Peter de Roetth and other angel investors.

Although the app has been in stealth mode, it’s now available for beta testing. You can sign up now on the Nara.me homepage.

Image courtesy of Chepko Danil Vitalevich, Shutterstock

Twitter has snatched up the talent behind social marketing automation company RestEngine.

“We’re very excited to announce that the RestEngine team is joining the Twitter flock! Just over two-and-a-half years ago we founded RestEngine to help social app publishers send targeted one-to-one emails based on a subscriber’s social graph,” the company said in an announcement on its website. “We’re thrilled to now focus our email skills and marketing automation know-how on a much larger scale at Twitter.”

RestEngine is said to be especially adept at helping developers with targeting, filtering, and personalization, areas that Twitter has shown plenty of interest in of late. Earlier this month, Twitter released a new Discover tab to better predict stories people want to see. And, of course, the information network has a big business interest in improving how it targets ads — ahem, “sponsored” content — to its users.

Three of RestEngine’s four-man founding team are migrating to Twitter. Co-founder Joe Waltman is going on an entrepreneurial hiatus, according to TechCrunch. TechCrunch calls the deal an acquisition, but we’re going to peg this as an acqui-hire. Here’s why: Twitter made no noise about its get (not even a tweet), the RestEngine service appears to be shutting down, neither Twitter nor RestEngine is lobbing around the “acquisition” word, and one of RestEngine’s co-founders is flying away.

Twitter has made a few other buys this year. The information network purchased social news aggregator Summify in January and blogging platform Posterous in March. The former seems like it would tie in nicely with RestEngine’s personalization capabilities.

Photo credit: FadderUri/Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

A team of former Googlers has launched an iPhone app, funded by Google Ventures, for recommending experiences you might want to partake in.

Stamped connects to your Facebook and Twitter networks. It seeks to turn the social services into fun and useful sources of experience recommendations, but in a structured way. With luck, the makers hope, Stamped will eliminate the last minute group text messages and chain emails searching for the best places to eat, movies to watch, or the best art galleries.

“While there’s lots of ways to do shouts or check-ins about places that appeal to a small demographic of extroverts that like to tell everyone where they are, we still look for better ways for people to put their thumbprint on things, places that they like,” Google Ventures partner Rich Miner told VentureBeat. “I think Stamped makes that real simple. And with a very simple, straightforward metaphor that everyone likes to tell people about the things they like.”

As Google employees, founders Robby Stein, Kevin Palms and Bart Stein impressed the team at Google Ventures with their technical know-how and product chops, Miner told VentureBeat. Google Ventures and Bain Capital put an undisclosed Series A investment into the company, which is based in New York, in April.

In a  blog post the founders of Stamped write:

The problem we’re trying to solve is noise. Specifically, there’s too much of it today when you try to discover something new online, whether it be a restaurant, book, movie, or song. What does 3 stars from 70 strangers mean? Is that good or bad? Can I trust this person’s opinion? Who is he/she? If you’ve ever asked these questions, you’ve experienced the weaknesses of current review and rating sites.

What sets Stamped apart from other recommendation services such as Alfred, the digital concierge, is that with Stamped users start off with 100 points called stamps, and can earn more when friends engage with their recommendations. This is similar to “gamification” strategies that are a bit of a business trend at the moment.

Stamped recommendations are not just plain text, like Tweets or Facebook status updates, they are connected to structured data from sites like Google, iTunes, Amazon, or Fandango. That makes the recommendations easier to connect smoothly with an online purchase or other actions, such as bringing up a map.

The news comes on the heels of the sale of Hunch, a personalization and recommendation service, which eBay today bought for a reported $80 million.

Hunch switched gears from a question and answer service to one that personalized the web to each individual. Hunch co-founder and chief executive officer Chris Dixon wrote on his blog last October that personalization was so important to many companies that they were hiring senior executives as the head of personalization.

No one knows more about what you’re likely to enjoy than your friends, and Stamped and Google Ventures think they may be onto something. Merely acquiring the name Stamped.com couldn’t have been cheap, and it’s unlikely that Google would put money behind a me-too recommendation service just because the founders used to work at Google.

Home page image via vipa/Flickr, hands via Roobee/Flickr

Today at DEMO, MashON is releasing a beta version of a new “shop in a box” tool called Dabble, which can be quickly integrated into any web shop including those running on mobile and tablet platforms.

MashON started in 2005 with a product called Comic Book Creator, which allowed people to manufacture their own comic books using licensed intellectual property (IP). Now MashON has over 350 products that can carry your brand, including clothing, home decor, kitchen and sports equipment. Shoppers can customize the available products by selecting colors, images and other options. MashON manufactures and ships the products on demand.

Dabble is a HTML 5 plugin that’s embedded into an existing web store to allow shoppers to customize products. The store owner selects the products and customization options such as colors and images using an administration dashboard.

Dabble’s cart adaptor interacts with your native cart (currently Magento, with Shopify, DemandWare and Yahoo adaptors to follow) so that all transactions are processed entirely within the store. Once shoppers start to order, Dabble handles the manufacturing and shipping. During its beta period, MashON won’t charge a subscription fee for Dabble.

The main advantage for customers is that they don’t have to manufacture, warehouse or ship merchandise, and they can integrate Dabble into an existing store. MashON claims that competitors like Cafe Press and Zazzle require shoppers to come to their stores to buy rather than integrating into the brand’s store. Another competitor, Spreadshirt, pointed out that this is not true of their product. Typical customers are TV studios, music artists, sports celebrities and toy companies and already include MGM Studios, The Jim Henson Company and Penguin Publishing.

MashON was founded in 2005, is based in Los Angeles, is privately funded and has 28 employees.

MashON is one of 80 companies chosen by VentureBeat to launch at the DEMO Fall 2011 event taking place this week in Silicon Valley. After our selection, the companies pay a fee to present. Our coverage of them remains objective.

RapLeaf’s data collection methods have raised privacy concerns in the past. The company came under fire in October 2010 for linking Facebook user ID information collected from banned Facebook apps into its own database of internet users. Rapleaf sells data to clients seeking personalization for ads, content and more.

“We have a great responsibility to protect privacy and data with all of our customers, and startups participating in the fund will be subject to the same data protections as our largest customers,” a RapLeaf spokesperson told VentureBeat.

The fund is part of RapLeaf’s strategy to grow the number of companies using its data.

The company said it hopes to fund 50 to 100 startups with the new initiative. The new fund provides up to $15,000 in cash grants, free data, and services to entrepreneurs. RapLeaf said there are many advantages for those who are chosen, such as access to RapLeaf’s network of partners, access to its customers and joint marketing opportunities.

The fund is being launched in conjunction with several partners, including North Bridge Venture Partners, Rembrandt Ventures, Founders Fund, Highland Capital Partners, SoftTech VC, MIT Entrepreneurship Center, Harvard College Entrepreneurship Forum, Stanford BASES and others.

The San Francisco-based company has a total of $15 million in funding.

That sounds similar to promises I’ve heard from many other companies, for example the content-sharing service Twine (which was acquired by Evri) and personalized news-reader MeeHive (which was shut down by parent company Kosmix).

But Kapur said previous attempts have just “nibbled at the edges” of the bigger problem. Gravity is part of the latest wave of companies trying to manage the ever-growing flood of content on the Web, he said. The first great innovation for handling all that content was search engines, followed by sharing on social networks.

Kapur argued that the next solution is embodied by music service Pandora — instead of asking users to search for music or recommending music based on the preferences of friends, Pandora plays songs that you’ll probably like, based on what it knows about your own taste and interests. Kapur said Gravity is like Pandora, but for the rest of the Web, not music.

Specifically, Gravity has built out a language model (it currently contains 100 million phrases, Kapur said) showing how different interests fit together. So Gravity knows that the phrase “free throw” is related to basketball, which falls under the broader category of sports. Then for each user, Gravity can build out an “interest graph” of everything you seem to be interested in based on public social network content — your messages on Twitter, your check-ins on Foursquare, your status updates on Facebook, and so on.

Gravity is launching its first product today, called Twinterests, which builds an interest graph based on user’s tweets and allows them to compare those interests to their friends’. Coming soon is The Orbit, a personalized Web newspaper.

These are really just demonstrations of Gravity’s technology, however. In the long-term, Kapur said he wants to turn Gravity into a service for Web publishers to personalize content for their readers. Imagine coming to VentureBeat and hitting a “personalize” button, then watching the page rearrange itself to highlight the stories that are of greatest interest to you.

Kapur previously served as the chief operating officer at MySpace. Gravity was co-founded by two other former MySpace executives, Jim Benedetto (former senior vice president of technology) and Steve Pearman (former senior vice president of product).

Gravity has raised $10 million from August Capital and Redpoint Ventures.

Dixon (pictured here, left) wrote an answer that is instructive when read closely:

We’ve talked to probably a hundred large websites about partnering and have found that personalization/recommendations is at the top of the priority list for almost all of them. It has surprised us, for example, how many large sites are either a) building significant internal operations to add personalization/recommendations to their sites or b) have recently hired senior executives to be “head of personalization.” … [P]eople seem to see personalization/recommendations as so important that they want to do it themselves. So our take is that what we are focused on is going to be a central theme in technology over the next few years and we are very well positioned having been working on the problem for almost 3 years.

Meanwhile, in the search space, technology like what we’ve built at Hunch is becoming increasingly important.

Dixon goes on to cite Google CEO Eric Schmidt on how mobile search will increasingly be personalized and anticipate users’ questions — something close to what Hunch does, in other words.

Reading between the lines here, Dixon seems to be saying that Hunch has found it challenging to sign partnerships for its recommendation engine because most companies want to own the technology themselves. He then argues that Hunch has a head start in solving the problem — which his potential partners may only realize after working on it for a while. And recommendations are important to the crucial search market, which currently has only two meaningful players, Google and Microsoft.

Dixon seems to be positioning Hunch for a sale to one of those two. Not likely Google, which is actively thinking about personalization and recently bought Aardvark, a question-answering startup which some have compared to Hunch. Perhaps Microsoft, though, which is Google’s last meaningful competitor in Web search?

On Twitter, I observed that Dixon’s post amounted to slapping a “For Sale” sign on Hunch. At first, Dixon disagreed. Then he observed that the “#2 [player] never builds hard tech themselves.”

Why build when you can buy? And why admit you want to sell when you can play hard to get?

If Dixon is dressing his company up for sale, he’s got the right backers. Hunch raised $12 million in March in a round of funding led by Khosla Ventures. Khosla partner Gideon Yu, a Hunch board member, is known for his role in high-profile Web acquisitions and investments, from Yahoo’s purchase of Flickr (cofounded by Hunch’s chief product officer, Caterina Fake); YouTube’s $1.65 billion sale to Google; and Microsoft’s $240 million investment in Facebook.

With this change to the website, Hunch appears to be moving away from the decision engine concept and refocusing on personalized content recommendations powered by behavioral data.

Companies targeting behavioral data appear to be gaining significant funding and acquisition momentum. Online shopping network WeShop just landed $4.25 million to get its members to provide behavioral shopping data to retailers and brands willing to offer deals and promotions. Professional network LinkedIn recently agreed to acquire recommendation engine technology mSpoke to provide its members with more relevant content. Finally, Hunch itself recently secured a round of funding for $12 million.

Hunch’s personalization engine appears to be on target. After I logged onto the site using my Twitter credentials (Facebook Connect is available as well) and answering 20 simple questions, I was provided recommendations for magazines, TV shows, and new books. The fun doesn’t stop there, by clicking “show more” the user can continue to get recommendations on various categories. I also received recommendations for vacations (Las Vegas!) and even credit card companies (see image below).

Ultimately, it would appear that behavioral data, though beneficial to consumers in finding more relevant content, is even more beneficial to advertisers and brands. These companies can now utilize these services to find a more engaged and relevant group of consumers. As I clicked at a new book recommendation, the next page not surprisingly had two links to where I could make a purchase, one at Amazon and one at Barnes & Nobles — both sponsored links.

Media is the one area where the social network, which recently passed 500 million monthly active users, lags behind competitors as an identity provider. While Facebook dominates third-party logins across the web, more users choose Twitter to connect, comment and log-in on news media sites than the social network, according to a study by social media metrics startup Gigya earlier this month.

To win in the space, Facebook recently put together a team with a handful of engineers and marketing managers to build relationships with media organizations. Justin Osofsky, who previously ran marketing for Facebook Connect, is leading the effort.

“We’re on a listening tour. We’re trying to figure out what dream products we could build with publishers,” Osofsky said in an interview earlier this month.

Part of this involves getting publishers to use the tools the company has already launched including the “like” button, social plug-ins that share what a person’s friends have done on a site, and Facebook’s analytics, which show demographics and virality metrics for specific pieces of content. But Osofsky said there are also new products in the works on top of a forthcoming chat bar.

Facebook has released a few stats on how social plug-ins and the “like” button are affecting traffic so far. Social publishing site Scribd, for example, now gets about 23,000 likes per day, up from 1,200 back in April, when the “like” button was originally launched.

Referral traffic, or the number of visitors that Facebook drives to a website from its domain, went up by 190 percent for ABC News and by 200 percent for TypePad. The National Hockey League (NHL) said video views and user registrations both went up by 50 percent when they implemented sharing tools, according to Osofsky.

In a presentation last night at KickLabs in San Francisco, he revealed a few tips on how to get higher click-through rates. “Like” buttons with photos of friends, for example get about four times as many clicks as “like” buttons without faces. Posts in the morning around 9 a.m. or at night around 8 p.m. also get more engagement.

“Touching” or “emotional stories” get two to three times as much engagement, or comments and “likes”, while a big sports game win attracts 1.5 times as much engagement than the average piece of content.

Media is fast becoming an important area for the social network. The news feed, long a place for friends to share personal photos and thoughts, is becoming more of a content discovery engine. Data on how users interact with everyday media content will inform Facebook’s understanding of people’s tastes, and in turn how the company targets ads. Facebook is also becoming more indifferent to whether its users spend time on its site or on other properties, so long as those sites are connected to the Facebook platform.

Beyond social plug-ins, there’s a great deal of potential to build social features directly into content management systems. (Imagine going to our blog, The Economist or the New Yorker and seeing a completely customized front-page layout influenced by your own personal tastes or interactions from friends.)

There’s also compelling potential for revenue. Although the company doesn’t talk about it, an interesting strategy to pursue in a few years would be to build a widely distributed and highly personalized advertising network — a Facebook AdSense, if you will — on millions of media properties across the web. It might have higher click-through rates than display ads sold in-house or comparable advertising schemes from Google, because the ads would be highly personalized and informed by years of data on a person’s tastes. Facebook would also have powerful retargeting capabilities, or the ability to display ads from the same brand over and over to a consumer as they move across the web. The company has already established beachheads on more than 350,000 sites through the social plug-ins it launched in April.

Media publishers arguably have more in common with Facebook’s approach to advertising than Google’s. Both publishers and Facebook are primarily in the business of ads that generate demand — or ads that reach consumers early in the decision-making cycle. Google, in contrast, earns most of its revenue from ads near the point of purchase, which are more lucrative on a cost-per-click basis, but may be a smaller overall market opportunity.

Osofsky said ads on external sites are not on Facebook’s plate right now. “We’re not thinking about advertising,” he said. “The opportunity is: if we drive more traffic to them, and if we make users more engaged and stay longer on their sites, they can monetize their own sites pretty well.”

He added, “We’re pretty pleased with the way advertising is working on Facebook.com already.”

Facebook still has a ways to go to catch up with its rival Twitter in media partnerships. Gigya reported that readers picked Twitter 45 percent of the time to connect, comment and log-in on media sites, while they chose Facebook log-ins 25 percent of the time.

That’s partly because of Twitter’s nature as a more public broadcast medium. But it’s also because Twitter has had a media partnerships strategy for at least a year, led by Chloe Sladden, who previously served as a vice president at Current, the cable media company cofounded by Al Gore. They now have three full-time people working on the effort.

This is one area where the rivalry between the two companies will be most fascinating to watch.

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