Walden Venture Capital

Pandora Launches Comedy

2011-05-17T11:19:00.000-07:00

Pandora enters the "spoken word" market with Comedy. I have been enjoying "Today's Comedy Radio" (started from the genre list) and "Cheech and Chong Radio" it in the car through my iPhone. The Cheech and Chong station is a mix of both music and skits. Something is wonderful about driving and laughing. Here's a link to an article about the launch in the New York Times:

"Pandora Internet Radio Service to Offer Large Archive of Comedy Clips"
by Ben Sisario

Great review for Powercloud

2011-03-30T20:52:00.000-07:00

D-Link DAP-2555 AirPremier N Dual Band, PoE Access Point powered by CloudCommand Reviewed on SmallCloudBuilder.com

Anyone who has tried to install and manage a multi-AP wireless network using browser-managed gear understands the value of centrally-managed WLANs. Unfortunately, the pricing of systems from Cisco, Meraki, Ruckus, etc. puts managed Wi-Fi systems beyond the reach of most small businesses that could benefit the most from them.
Part of the high cost is in the access points themselves, although in some cases this more a reflection of what the market will bear rather than higher cost of material of the APs themselves. But another piece of the cost is the hardware controller(s) required to manage the APs.
What D-Link's partner PowerCloud Systems has done is develop a cloud-based system for managing network equipment. PowerCloud's technology, called CloudCommand, isn't limited to managing wireless networks. But it's PowerCloud's first application with D-Link as their first equipment customer.

.... Installation is dead simple and configuration options are limited so that inexperienced users won't get confused.

Full review is here

Visit Powercloud's website here

SoundHound is Amazon App of the Day on their Android Appstore

2011-03-30T20:31:00.003-07:00

Visit Amazon's Android App Store here

Image Vision Labs in the press for its Walden investment

2011-02-21T09:14:00.000-08:00

An Anna start-up may have a way to prevent that and potentially turn itself into the region's next $100 million venture.

Image Vision Labs has developed online filters for inappropriate images, texts, videos on websites and mobile devices. Customers include Apple and Photobucket. It also recently partnered with Alcatel on a development project.

The company is pursuing licensing agreements and partnerships with Web and wireless service providers, but there's also potential for other industries.

The eight-employee company just landed a big vote of confidence - its first institutional investment of more than $2 million from San Francisco-based Walden Venture Capital and other private investors. That followed about $235,000 in funding from two smaller sources this summer.

Chief executive Steven White wrote the code for Image Vision Labs' software and co-founded the company in late 2008 with chief operating officer Mitch Butler and Chad Harbour, head of Web sales.

Click here for the full article in the Dallas Morning news

CES: Pandora is Everywhere

2011-01-09T09:28:00.000-08:00

Great article by Eric Savitz in Forbes:

Suddenly, Pandora is everywhere. The Internet radio service is on Blu-Ray players. Televisions. Factory installed and after-market car stereo systems. Home audio systems. PCs. Tablets. And phones. Thanks to more than a decade of hard work, the company has emerged from the massively troubled music industry as a leading player – and one which stands to benefit big time from the spread of high-speed wireless bandwidth and the proliferation of wireless devices.

In a wide-ranging breakfast interview at the Consumer Electronics Show in Las Vegas last week, CEO Tim Westergren laid out the how Pandora has grown from troubled startup to Internet icon – and gave a glimpse at where the company might go next.

Pandora has been around for 11 years, but didn’t launch the Internet radio service until late 2005. The company’s original business idea was to build a music recommendation engine; originally called Savage Beast Technologies, the company tried to license the software to music sellers like Amazon.com (AMZN) and CDnow...

read the full article here

Open Source Band / Pandora at SVR '09

2010-11-29T17:10:00.000-08:00

See 2:40 for Open Source Band clips

See 3:45 for Tom Conrad, CTO Pandora, receiving the Technology All-Star Reward on behalf of Pandora. Thanks Tom for including me in your acceptance speech.

Open Source Band at SVR, Dec 1 at Great American Music Hall

2010-11-29T13:54:00.000-08:00

Walden Venture Capital's Larry Marcus is honored to be in the drumming chair for the Open Source Band. Playing Wednesday December 1, 2010 at 8p at the Great American Music Hall.

Purchase $5 off tix at http://svrocks2010.eventbrite.com/?discount=osb5off

The Open Source Band is
Andy Barton — Vocals
Greta Boesel — Vocals
Larry Marcus — Drums
Alison Murdock — Vocals
Chris Pan — Guitar
Andrew Stess — Bass
Jay Webster — Guitar
Randi Zuckerberg — Vocals
not pictured is Tim Chang (Guitar) who is taking an OSB sabatical.

The band is all "tech" people from Facebook, Silicon Valley Rocks, Quova, Walden Venture Capital, AmpliFIND Music Services

A detailed profile of the band is here or visit the Open Source Band on Facebook.

See a video of Open Source Band '09 here

The full line up for the evening is:

Sonic Love Tonic — Second place winners at the Emergenza Battle of the Bands in 2009, classic American rock ‘n roll with a hipster twist. Tech affiliations: Dogster, CBSi (CNET).

The Hot Toddies— Oakland’s sweethearts, The Hot Toddies mix 1950’s beach pop with indie rock riffs, a bottle of whiskey and a dry sense of humor. Tech affiliations: SAY Media (formerly VideoEgg/Six Apart).

Open Source Band— SV’s original cover band featuring special guests Randi Zuckerberg, Chris Pan Andy Barton, Jay Webster, Larry Marcus, Andrew Stess, Greta Boesel, and Alison Murdock. Tech affiliations: Facebook, Quova, Walden Venture Capital, AmpliFIND Music Services.

RubberSideDown— Radio-friendly, 70’s hard rock with an alluring rough edge. Tech affiliations: Oracle, The Loomis Group, Advent Software.

Sid Luscious and the Pants — Maximum new wave: the greatest 80’s band there never was. Tech affiliations: MOG, Gracenote, Rhapsody (co-creator), Liquid Audio & IODA (former employees).

Lucid Mechanism — A sonic experience that gracefully abuses the preconceptions of live electronic music. Tech affiliations: Pyramind, Ex’pression College, Apple (Genius Bar).

Ingar Brown and the Future Funk— Funk, hip-hop, soul, dance and R&B all wrapped up in an eclectic box that’s ready to get any party started. Brown was on the short list for a Grammy nomination in 2009. Other Mashery players include Roger Plotz, currently the lead guitar player for The Memphis Murder Men and members of the SF Bay Area award winning coverband Busta Groove. Tech affiliations: Mashery.

Coverflow: eergetic and fun cover band who has made the tech-party circuit from TechCrunch to The Lobby. Tech affiliations: Mayfield, Facebook, Blippy, Dropbox.

Keep music in schools

All proceeds for Silicon Valley Rocks! will be donated to Music in Schools Today (MuST). MuST is the Bay Area’s answer to the crisis in music education. Despite extensive research indicating that music instruction supplies intellectual, emotional and physical components critical to children’s development, music and arts programs are often the first victims of budget cuts. MuST advocates for, supports and develops integrated, accessible, sustainable and measurable music-in-education programs that improve student achievement.

SoundHound featured in NYT top 10 apps

2010-11-15T07:39:00.000-08:00

See the full article HERE. Here is an exerpt:

Top 10 Must-Have Apps for the iPhone, and Some Runners-Up

By BOB TEDESCHI

Published: November 10, 2010

I’m always surprised when I come across people who have yet to fill their iPhone with apps. The most often cited excuse? Not enough time to sift through 300,000 apps to find the good ones. True, it can be a slog. (But that’s what I do for you every week.) In this column, I’ve compiled 10 must-have apps that will save you time, make your life easier and make you smile.

You won’t see Twitter, Slacker orFacebook, among others, on this list. Although I find them indispensable, the services aren’t unique to a mobile phone. To make my Top 10, an app must deliver an experience you couldn’t find on your computer — something, in other words, that exemplifies the smartphone at its best.

What qualifies?

SOUNDHOUND (FREE AND $5) You’ve probably heard of Shazam, the app that identifies songs. SoundHound is faster, and it offers a broader range of ancillary features. You can hum a tune into the phone and it’ll find the song, look up lyrics and run YouTube videos of song performances. The $5 version lets you identify an unlimited number of songs. Users of the free version get five tags monthly.

apps he profiled in the article: Google, SoundHound, Hipstamatic, Evernote, Angry Birds, Urbanspoon, Starwalk, FireFox Home, QuickOffice Mobile Suite, RedLaser, Quick Calls.

A is for Amazon, B is for Bank of America, P is for Pandora

2010-09-15T15:46:00.000-07:00

Phonetic Alphabet: Google Instant style. You know the NATO or Western Union phonetic alphabet: Alpha for A, Bravo for B, Charlie for C etc? With Google launching it’s “Instant” service where it auto-fills based on what you type, I wondered what brands owned their letters. This is a powerful proxy for brand power and awareness as these should be the leading search terms by letter. Note Google is optimizing results for my location in San Francisco so I substituted #2 for #1 when there is an * as noted below to put the national brand first. Where the first result is an acronym I put #2 #3 result after the "/". Try these the next time your on a call with an airline or help desk. My name (Larry): “L as in Lowes, A as in Amazon, R as in REI, REI, Yahoo!” Congratulations to all for making the list and a special tip of the hat to Joe, Tim and the Team at Pandora.

A Amazon
B Bank of America* / BART
C Craigslist
D DMV / Dictionary
E Ebay
F Facebook
G Gmail
H Hotmail
I iPHone
J Jet Blue
K Kayak*/Kaiser/KTVU
L Lowes
M Mapqest
N Netflix
O Orbitz* / Outside Lands
P Pandora
Q Quotes
R REI / Ross
S Skype
T Target
U USPS / UPS / United Airlines
V Verizon
W Weather
X Xbox
Y Yahoo!
Z Zillow

• for “B”, BART- Bay Area Rapid Transit was 1st result. Substituted #2 (Bank of America) to override local result
• for “K”, Kaiser, hospital/health care organiztion was 1st result, KTVU local TV affiliate was 2nd. Substituted #3 (Kayak) to override local result
• for “O”, Outside Lands was 1st result. Substituted #2 (Orbitz) to override local result

Very surprised about Target beating Twitter. I’d expect that one to change. Also Amazon beating Apple. What surprises you?

A special thanks to Drew Marcus for inspiring this list when he called me to let me know that Pandora was the first on the list when you type a P.

Here’s the phonetic alphabet tables for NATO and Western Union

#1 & #2 in music

2010-05-28T15:02:00.000-07:00

This iPhone App Store screenshot is one we are proud of given it has our two portfolio companies (Pandora & SoundHound) in the top two positions in the free music category. They are also both in the top 50 of all apps and there are over 200,000 in the store according to 148apps.biz.

I was recently asked how they differ. Pandora is Internet radio. It's amazing at taking the haystack of music and throwing the needle (song) out that is appropriate and joyful to your listening experience. It's a lean forward experience with rich information about songs that are playing but somewhat passive in nature in that it brings the music to you versus actively having to hunt for it.

SoundHound is the inverse. It's mobile music search, possessing the ability to reach into the haystack to tell you what the needle (song) is. Use it any time you want to conduct a music search for songs, bands, or lyrics. Then indulge in detailed, browsable results including listening and watching. In addition to text search, it enables use of the mic as a search input: voice (say it), singing and listening to the music. You can even launch a Pandora station from a search result.

Tim Westergren gets timeless recognition from Time

2010-05-28T14:31:00.000-07:00

Congratulations to Tim and Pandora on the well deserved recognition

Time Magazine's 2010 Time 100
Thinkers: Tim Westergren, Founder and Chief Strategy Officer of Pandora

By Kurt Andersen

If Pandora, the service that allows users to create their own Internet radio stations, is the little music search engine that could, then founder Tim Westergren, 44, is its quixotic engineer. A former rock and jazz musician, Westergren had a big idea in 1999: the Music Genome Project, a typology for categorizing any piece of music according to nearly 2,000 traits identified by Pandora's experts. As a user, you start with, say, a Brian Eno song, then receive a stream of "genetically" related music — Four Tet, Harold Budd and other artists you'll probably like.

For years, Pandora chronically verged on failure. But thanks to the iPhone, 15 million of which carry a Pandora app, it has finally made it over the top — and Westergren and his hybrid of human discernment and digital power are successful as well as cool.

Andersen is a novelist and host of public radio's Studio 360

See the full Time 100 and read more including a great photo of Tim here

iPad: the Consumption v. Production realization

2010-05-28T13:47:00.000-07:00

I realize that the most important reason I love my iPad is that I fundamentally spend way more time consuming content than actually creating it. Sure, I write some emails and these blog posts (using my desktop now... though I could be using the snazzy yet heavy keyboard peripheral (shown above); however, most of the time, I more passively consume rather than actively creating stuff like email, web, models, presentations, docs, board packs etc. And then there's all the entertainment stuff that is pure consumption by definition: movies, TV, books, music, and the wonderful world of apps. With an iPad, all that entertainment is just plain stellar. The iPad sits on the tray table in a plane more easily and comfortably than I would hold a book. It's a better video display than the one built in on the seat backs of Virgin America or JetBlue. It's more enjoyable to sit on a couch or chair with an iPad than a computer. Do I miss the tactile keyboard? Sure, and that's why I have the peripheral as a type of dock; however, the typing is tolerable and brevity is always appreciated. Heck, Twitter only gives you 140 characters. So is an iPad a laptop replacement? Depends on how much you need to produce versus consume. The real question is how much more easily and pleasurably do you want to consume and be entertained? The apps add another dimension to the utility and fun factor of the iPad. That's just something that a desktop can't compete with. My biggest beef is the lack of flash support for web surfing, but the upside of the device working so well without it is worth the trade off. Hopefully websites will adapt appropriately over time. What is your experience?

iPad Excitement

2010-04-03T08:36:00.000-07:00

It's been a long time since I've been so excited about a new gadget. It's pretty universal with the early press giving the iPad strong reviews. So the gadget gurus and early adopters will be there for sure. I'll have mine unboxed tomorrow... ill timed trip to the mountains preventing me from going to the Apple store to enjoy the geek gathering. The buzz of kindred spirits waiting in line together for a cherished item. Reminds me of sleeping overnight for Grateful Dead tix in NYC in the early 80s (well, almost).

Gizmodo published a great list of essential iPad apps. Includes both Pandora and SoundHound and some of my other favs: Netflix, Flight Control, Kayak, WSJ, NYT. Looking forward to trying Magic Piano by Smule, Wolfram Alpha and others.

Full Article from Gizmodo is here

Excerpt from Gizmodo:
Pandora's free music discovery app isn't overly ambitious in its transition to the iPad, sticking to its basic customized radio feature, while presenting artist info along your playlists. Still though, the music is free and unlimited, and exceedingly well chosen. (Algorithmed?)

SoundHound: IDs any music that's playing with a seriously fast recognition engine, but doesn't stop there: It does lyrics, music discovery, charts (based on what people are IDing, not buying) and full playlist playback. $5

Another great article from Mashable on Pandora as a "lean-in" experience. Time to mount an iPad on my wall next to the stereo as the dream controller? full article here

We are looking for great services to invest in that can leverage the iPad and it's ilk. Any ideas? email me at Larry@waldenvc.com. follow me on Twitter at @cyberlar

Walden Companies Score In WSJ Top VC backed Companies List

2010-03-11T07:56:00.000-08:00

According to the The Wall Street Journal "There are some 10,000 privately held, venture-backed companies in the U.S. To pick the 50 of them with the greatest potential, a team from research firm VentureSource, a unit of Wall Street Journal owner News Corp., applied a strict set of standards."

Two on the list are Walden Venture Capital portfolio companies: Pandora and Glam. Congratulations to the management teams for the recognition. The article continues: "VCs are having a tough time these days, but many of them are still nurturing inventors and entrepreneurs." Walden is grateful to be in the later group and will soon be announcing the addition of some promising companies to our portfolio. Hopefully they'll appear in this list some years down the road.

From The Wall Street Journal: Sizing Up Promising Young Firms
By COLLEEN DEBAISE And SCOTT AUSTIN
Venture capitalists, the investors who supply start-up money to promising young companies, are always looking for the next big thing—whether it's a hot new gadget, game or medical breakthrough...

Here's the complete article

Here's the complete list of the top 50

Pandora in the New York Times - talks about our initial round

2010-03-09T20:58:00.000-08:00

The New York Times writes a thoughtful article about Pandora's history and future. She highlights the first institutional round that we lead in early 2004 after Tim Westergren had done a lot of pitches that fell on deaf ears. But we fell in love with the Music Genome Project and what it could become. Its efficacy was validated by AOL and Best Buy. These kings of the jungle music leaders (at the time) were using it as recommendation technology. Tim and I had a shared vision of building a consumer service that would truly leverage the unique advantage of delivering the right song to users, not just a sea of musical options. Labrador's Larry Kubal joined us with Bob Kavner coming on the Board, shortly followed by Jessica Steel, Tom Conrad, Joe Kennedy and Etienne Handeman. Joe and the team crystallized the vision and Pandora Internet Radio was born soon thereafter. An amazing group of additional investors, management and board members continues to make it all possible.

Click here for the full New York Times Article

How Pandora Slipped Past the Junkyard
By Clair Cain Miller
Published: March 7, 2010

OAKLAND, Calif. — Tim Westergren recently sat in a Las Vegas penthouse suite, a glass of red wine in one hand and a truffle-infused Kobe beef burger in the other, courtesy of the investment bankers who were throwing a party to court him.

Tim Westergren says the recent success of his Internet radio service, Pandora, feels a bit surreal.

It was a surreal moment for Mr. Westergren, who founded Pandora, the Internet radio station. For most of its 10 years, it has been on the verge of death, struggling to find investors and battling record labels over royalties.

Had Pandora died, it would have joined myriad music start-ups in the tech company graveyard, like SpiralFrog and the original Napster. Instead, with a successful iPhone app fueling interest, Pandora is attracting attention from investment bankers who think it could go public, the pinnacle of success for a start-up.

Pandora’s 48 million users tune in an average 11.6 hours a month. That could increase as Pandora strikes deals with the makers of cars, televisions and stereos that could one day, Pandora hopes, make it as ubiquitous as AM/FM radio.

“We were in a pretty deep dark hole for a long time,” said Mr. Westergren, who is now the company's chief strategy officer.. “But now it’s a pretty out-of-body experience.”

At the end of 2009, Pandora reported its first profitable quarter and $50 million in annual revenue — mostly from ads and the rest from subscriptions and payments from iTunes and Amazon.com when people buy music. Revenue will probably be $100 million this year, said Ralph Schackart, a digital media analyst at William Blair.

Pandora’s success can be credited to old-fashioned perseverance, its ability to harness intense loyalty from users and a willingness to shift directions — from business to consumer, from subscription to free, from computer to mobile — when its fortunes flagged.

Its library now has 700,000 songs, each categorized by an employee based on 400 musical attributes, like whether the voice is breathy, like Charlotte Gainsbourg, or gravelly like Tom Waits. Listeners pick a song or musician they like, and Pandora serves up songs with similar qualities — Charlotte Gainsbourg to Feist to Viva Voce to Belle and Sebastian. Unlike other music services like MySpace Music or Spotify, now available in parts of Europe, listeners cannot request specific songs.

Though Pandora’s executives say it is focusing on growth, not a public offering, the company is taking steps to make it possible. Last month, it hired a chief financial officer, Steve Cakebread, who had that job at Salesforce.com when it went public.

It is all a long way from January 2000, when Mr. Westergren founded the company. Trained as a jazz pianist, he spent a decade playing in rock bands before taking a job as a film composer. While analyzing the construction of music to figure out what film directors would like, he came up with an idea to create a music genome.

This being 1999, he turned the idea into a Web start-up and raised $1.5 million from angel investors. It was originally called Savage Beast Technologies and sold music recommendation services to businesses like Best Buy.

By the end of 2001, he had 50 employees and no money. Every two weeks, he held all-hands meetings to beg people to work, unpaid, for another two weeks. That went on for two years.

Meanwhile, he appealed to venture capitalists, charged up 11 credit cards and considered a company trip to Reno to gamble for more money. The dot-com bubble had burst, and shell-shocked investors were not interested in a company that relied on people, who required salaries and health insurance, instead of computers.

In March 2004, he made his 348th pitch seeking backers. Larry Marcus, a venture capitalist at Walden Venture Capital and a musician, decided to lead a $9 million investment.

“The pitch that he gave wasn’t that interesting,” Mr. Marcus said. “But what was incredibly interesting was Tim himself. We could tell he was an entrepreneur who wasn’t going to fail.”

Mr. Westergren took $2 million of it and called another all-hands meeting to pay everyone back. The next order of business: focus the service on consumers instead of businesses, change the name and replace Mr. Westergren as chief executive with Joe Kennedy, who had experience building consumer products at E-Loan and Saturn. Pandora’s listenership climbed, and in December 2005, it sold its first ad.

But in 2007, Pandora got news that threatened most of its revenue. A federal royalty board had raised the fee that online radio stations had to pay to record labels for each song. “Overnight our business was broken,” Mr. Westergren said. “We contemplated pulling the plug.”

Instead, Pandora hired a lobbyist in Washington and recruited its listeners to write to their representatives. “A lot of these users think they’re customers of the cause rather than users per se,” said Willy C. Shih, a professor at Harvard Business School who has written a case study on Pandora. “It’s a different spin on marketing.” The board agreed to negotiations and after two years settled on a lower rate.

Some music lovers dislike Pandora’s approach to choosing music based on its characteristics rather than cultural associations. Slacker Radio, a competitor with three times as many songs but less than a third of Pandora’s listeners, takes a different approach. A ’90s alternative station should be informed by Seattle grunge, said Jonathan Sasse, senior vice president for marketing at Slacker. “It’s not just that this has an 80-beat-a-minute guitar riff,” he said. “It’s that this band toured with Eddie Vedder.”

Yet in 2008, Pandora built an iPhone app that let people stream music. Almost immediately, 35,000 new users a day joined Pandora from their cellphones, doubling the number of daily signups.

For Pandora and its listeners, it was a revelation. Internet radio was not just for the computer. People could listen to their phone on the treadmill or plug it into their car or living room speakers.

In January, Pandora announced a deal with Ford to include Pandora in its voice-activated Sync system, so drivers will be able to say, “Launch my Lady Gaga station” to play their personalized station based on the music of that performer. Consumer electronics companies like Samsung, Vizio and Sonos are also integrating Pandora into their Blu-ray players, TVs and music systems.

“Think about what made AM/FM radio so accessible,” said Mr. Kennedy, Pandora’s chief. “You get into the car or buy a clock for your nightstand and push a button and radio comes out,” he said. “That’s what we’re hoping to match.”

SoundHound: A Music App That Could Change Mobile Search

2009-12-16T20:00:00.000-08:00

Dana Oshiro of ReadWriteWeb.com writes a wonderful article about SoundHound Music Mobile Search Service.

Larry Marcus is one investor with the ability to turn good core technology into consumer success. Five years ago he helped change the mathematical algorithm of the Music Genome Project into music sensation Pandora. Today, Marcus' work with Melodis' Sound2Sound Search Science is already celebrating market success with music identifying application SoundHound. ReadWriteWeb caught up with Marcus to hear about his latest project.

At first glance, Melodis' SoundHound is a Shazam Encore competitor with faster search functionality. Both services are among the top paid iPhone applications, both cost $5 dollars and both allow users to find songs, scan lyrics and read artist bios. Nevertheless, in addition to allowing users to identify songs from ambient background music, sung lyrics, spoken word and text-based search, SoundHound also lets you listen to music through your own iTunes library or Pandora account. With SoundHound you can capture FM radio, identify a song and create a Pandora internet radio station within seconds. And while each of these features are impressive, what we're really excited about is SoundHound's plans for the future. continue reading here...

Pandora wins Mashable OpenWeb Award

2009-12-16T18:31:00.000-08:00

Congratulations to Pandora. Article on Mashable and other winners here

Pandora on NBC TV

2009-09-28T16:19:00.000-07:00

NBC clip featuring an in depth interview with Pandora Founder Tim Westergren. Sarah Lacy of TechCrunch and Laura Sydell of National Public Radio join NBC's Scott McGrew.
Tim highlights the ad model including targeting by zip, device, genre and demographic. Additional discussion of difference between on demand music service (play what you want now, like spotify or rhapsody), and Pandora that focuses on listening -- the power of the service is playing you music you love versus having to dig for a next song for yourself.

link to pressheretv.com video in two parts

Walden iPhone Exposure: #1 apps in both free and paid music category

2009-08-09T12:39:00.000-07:00

Pandora #1 free music app

Midomi #1 paid music app

And they happen to be highly complimentary. Pandora to easily consume music you love with it's one click radio format; Midomi to easily search for samples and info on specific songs/artists you know OR identify music you are hearing.

Very different models and visions of the future, but both are making consumers really happy and powered by some incredible technology and entrepreneurs. iPhund?

iPhone Effect

2009-08-09T09:46:00.000-07:00

The iPhone is blazing a trail in next generation mobile. It’s that unique combination of ease of use, an ecosystem to empower and benefit 3rd parties, great functionality and clear marketing. The consumer reaction to the iPhone reminds me of the internet in 1997 when “always on, high speed” internet was getting adopted. Usage was and commerce were 3x’ing because the experience “didn’t suck”. It didn’t take an advanced degree to see what broadband’s ultimate penetration would look like. The iPhone and the app store are foretelling the mass market future of mobile. iPhone adoption is exploding at a massive and unprecedented rate of 10s of millions per year in spite of the global economic meltdown. Apple has slightly over a 1% share of the global market at the end of ‘08 (iPhone installed base at 13.7 mm units), Nokia (38% share), Motorola (8% share), RIM , HTC, Samsung, Palm and others are aggressively pursuing this market. Note that RIM’s Blackberry maintains market share leadership over the iPhone under most definitions of the smart phone market; however, from a mobile Internet or app usage perspective Apple is way ahead. On a recent trip to Greenwich, CT I learned that the teens there are gravitating to Blackberry’s BBM (a private messaging product for those on the Blackberry network) and keyboard.

Some more stats:
- Time to sell 1st million iPhones: 11 weeks
- Run rate: 5.2mm iPhones in Q2 09, up 6x over Q2 08
- Total iPhones sold: 22mm through Q209 (10mm+ more if include iPhone touch).
- Total apps downloaded: more than 1.5 billion in first year (app store recently turned 1).
- Run rate for app sales: $1mm per day according to Steve Jobs in this WSJ article
- Consumer intent to purchase a smartphone with data plan as next phone: 41% report from Yankee group here showing overwhelming majority of intent is for RIM and Apple)

These iPhone type devices are not just phones, but mobile, connected computers, and possessing a myriad of exciting functionality including GPS, accelerometer, sensitive microphones for sound/voice input, touch screens, Wi-Fi, local storage, easy connection to cars and stereos. The iPhone has become a legitimate game and entertainment platform benefitting Electronic Arts, Glu Mobile, Game Loft, Digital Chocolate, Tapulous (Tap Tap Revenge is amazing), among many.

So what is the iPhone Effect?
- Consumers can easily find and install 3rd party apps through the coherent app store. Seems like it would have been simple already, but this is the first time it's just easy. Early attempts to replicate it have been very problematic. Just ask Nokia about the challenges of their Ovi Store.
- Publishers can bring their wares to market without carrier negotiations (talk about a company killer - dozens of companies have died at the doorstep of carriers waiting for that big deal to close). Getting out of that sales loop is a big deal. Apple takes a 30% cut.
- Carriers get to sell data plans, watch data usage soar and unwind dreams of controlling a mythical walled garden.

This is truly a golden age for mobile innovation. Welcome to one of the great mega-trends for the next major venture cycle.

SoundHound Ad (still midomi branded) highlights speed of identifying that song now

2009-08-09T09:23:00.000-07:00

In a world where you have only have seconds left to identify a song... Midomi Music Identifier and Search. Buy it in the iTunes app store now if you have an iPhone. Ad was done entirely in house right down to voice talent, video and audio. Not at all surprised to learn that Aaron is a hobbyist boxing announcer.

Thanks to Corinne Marcus for the music

Pandora #2 on Blackberry

2009-08-07T14:57:00.000-07:00

Pandora #2 Blackberry app excl RIMs own Blackberry app store download. http://tinyurl.com/mjsuj7

Going Mac Mini in Entertainment System

2009-08-07T11:18:00.000-07:00

Going Mac Mini in Entertainment System. Primary catalyst? Netflix streaming. The library of movies and TV shows (more important to me) on demand is improving. I Secondary catalyst? New Mac Mini is quite the green machine. Apple's claim is only 13 watts per hour on idle and that the "Mac mini the most energy-efficient desktop computer in the world." For a solar home owning, Prius driving guy like me, that really matters. Had been waiting for blu-ray drive but that's not looking like it's coming any time soon and I got tired of waiting. Recos for external blu-ray for a Mac? Would have gone PS3 given it's Blu-Ray drive but it can't easily stream Netflix without an awkward Windows server attached. Using a USB audio dongle to get digital audio out.

Venturebeat Coverage - Midomi #1 Paid Music App + Walden Led Financing

2009-08-04T18:33:00.000-07:00

Matt Marshall of Venturebeat covers Midomi's recent ascent to #1 and comments on our involvement. Includes a video comparing the speed of the music identification to Shazam, showing Midomi's speed.

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Midomi lets you identify and search for music, hits No. 1 iPhone paid music app

August 3, 2009 | Matt Marshall

Midomi, a mobile application that lets you identify songs by singing into the phone, today became the No. 1 paid music application on the iPhone.

Tomorrow, the company will also announce it has raised $4 million in fresh venture capital funding, led by Walden Venture Capital’s Larry Marcus.

The application boasts several million downloads (the company isn’t specifying exactly how many). It launched the $4.99 application three months ago, and the company.... see full article here

Melodis Announces Walden Investment

2009-08-04T15:16:00.000-07:00

We've been working with the company for a number of months, from before the Midomi app was upgraded and made paid, but the round has now formally closed.

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Melodis, Sound Search Technology and Applications Innovator, Raises $4M Led by Walden Venture Capital and a Strategic Investor.

Larry Marcus from Walden Venture Capital joins the Melodis Board of Directors

SAN JOSE, California –August 4, 2009 – Pioneering sound search technology and applications innovator MELODIS Corporation, announced that they have raised $4M additional funding in a round led by Walden Venture Capital VII, with participation from a major global device manufacturer. Larry Marcus from Walden Venture Capital has joined the Melodis Board of Directors.

MELODIS’ mission is to make sound and speech the preferred means to search and navigate information on mobile or IP connected devices. “Melodis has established itself as a leading branded mobile application publisher with Midomi Ultra Music Identifier and Search and Melodis Voice Dialer on the iPhone and other devices. Additionally, we have a growing list of licensing relationships with marquis device manufacturers and carriers globally,” said Keyvan Mohajer, Chief Executive Officer of MELODIS Corporation. “We are thrilled to add Walden Venture Capital as a partner and bring Larry Marcus’ deep experience in consumer services and digital media to our team.”

“Melodis Sound2Sound Search Science is a breakthrough technology with a mass market future in empowering applications,” said Larry Marcus. “The unique methodology of Sound2Sound provides breakthroughs in speed and accuracy that can be leveraged across a plethora of applications that would benefit from sound or voice as the starting point for search. The Company’s flagship application, Midomi Ultra is already the top paid music app on iTunes. It targets people who love music, allowing quick identification of a song one hears playing, or enabling rapid search for music people know.”

About MELODIS Corporation

MELODIS is a sound search technology and applications company headquartered in Silicon Valley, California. Its mission is to make sound and speech the preferred means to search and navigate information on mobile or IP connected devices.
MELODIS is the creator of the Sound2Sound™ Search Science, a proprietary methodology that searches sound against sound, bypassing traditional sound to text conversion techniques even when searching text databases. The result is improved accuracy, faster response time and increased scalability. Sound2Sound™ Search Science powers applications including Midomi Ultra Music Identifier and Search and Melodis Voice Dialer. MELODIS has numerous partnerships with global companies including leading device manufacturers and operators that are leveraging the Sound2Sound™ Search Science for their respective platforms.

MELODIS is backed by leading Silicon Valley investors, including Global Catalyst Partners, TransLink Capital, Walden Venture Capital and JAIC America. For more information, visit www.melodis.com

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Media Contact:
press@melodis.com

Pandora Audio Ad for Mozy

2009-08-04T13:18:00.000-07:00

I always feel some joy when I hear an audio ad on Pandora. Just heard this great one for Mozy on Pandora. Pandora is a remarkably captive environment to reach users. I love how it's so uncluttered and sparse from an ad perspective. When an ad plays, it really stands out. Reaching listeners midday with audio has been a challenge, hence the popularity of am/pm drive times. Reminds me a lot of marketwatch.com where the daytime usage made it a core buy. That said, all the mobile and at home listening is spreading usage across dayparts nicely.

Divine Caroline featured in new Yahoo

2009-08-04T11:38:00.000-07:00

Check out the new format of Yahoo here. You can either type in divinecaroline.com or click "+Add" next to "My Favorites" on the left. You'll see DivineCaroline listed in alphabetical order. They will publish the freshest stories each day to this widget on Yahoo! Nice implementation. Give it a shot.

Pandora top 3 iphone app after Google and Facebook

2009-05-18T12:13:00.000-07:00

from Apple

http://www.apple.com/itunes/billion-app-countdown/

Divine Caroline bigger than iVillage

2009-05-18T12:09:00.000-07:00

Congrats to Kate and the team.

Meredith Corporation (NYSE: MDP) announced that DivineCaroline®—the flagship site of Real Girls Media Network and an integral part of the Meredith Women’s Network—has cracked Quantcast’s Top 200 sites in the world. With 5.3 million users, DivineCaroline has now eclipsed longtime online traffic leaders such as iVillage.

DivineCaroline offers a unique platform that publishes user-generated content alongside expert-guided editorial to offer consumers a fully engaged community in which to share experiences and form connections. It targets women in the highly desirable 25-54 age group and has experienced strong and steady growth since its launch in 2007.

“The growth of Divine Caroline is a testament to the vibrant community of women online,” says Kate Thorp, CEO, Real Girls Media Network. “Sharing, helping, and participating in the world around them are an important part of our lives.”

Thorp notes that women now represent 53 percent of the total U.S. online audience, and “women's community” was the most visited and fastest growing internet category, acccording to ComScore Media Metrix’s year-end report.
The Meredith Women’s Network, which attracts 15 million unique visitors monthly,* is the first network comprised of premium, branded websites geared towards the topics that matter most to women. It includes The Better Homes and Gardens® Network (Better Homes and Gardens, Better Recipes and the recently launched MixingBowl™); The Parents® Network (Parents, American Baby and Family Circle); and The Real Girls NetworkSM (DivineCaroline®, Fitness, More and Ladies’ Home Journal).
“The success of DivineCaroline reflects the power of this exciting new brand and its connection to female consumers,” says Meredith Chief Development Officer John Zieser. “Real Girls Media is proving to be a perfect complement to the Meredith Women's Network, and we will continue to seek out partners where we can replicate this ‘one plus one equals three’ relationship.”

Pandora crossing into mass market

2009-03-19T16:46:00.000-07:00

According to NPD, awareness and usage of Pandora, a leading online radio station, doubled year over year to 18 percent of Internet users; one-third of those who were aware of Pandora report using the service. Similarly, the percentage of consumers claiming to listen to music on social networks climbed from 15 percent in the fourth quarter (Q4) of 2007 to 19 percent in Q4 2008. Nearly half of U.S. teens are engaging with music on social networks, which is an increase from 37 percent a year ago; among college-age Internet users, the percentage increased from 30 percent in 2007 to 41 percent in 2008.

Stanford VLAB event redux

2009-03-19T16:14:00.000-07:00

Great event at Stanford VLAB Tues eve. Packed room with 250 plus people at the Stanford Graduate School of Business. On the panel on Music Models online, moderated by Paul Bonanos, MC Hammer, Jessica Kahn of Tapulous, Jordan Kurland who manages Death Cab For Cutie among others, Dorrian Porter of Mozes and Jeff Yasuda of Blip.fm. I was pleased with the feedback to private beta of a new music search and ID product that will be coming out from Melodis. After asking the audience to let me know if they wanted to beta test it, I got over 50 cards handed to me.

MC Hammer has a new show called Hammertime coming out on A&E. The camera crews were there in full force. He has over 150k people following him on Twitter, underscoring how powerful the artist fan connection can be. Twitter is clearly gaining a lot of momentum with its "real time web" experience.

Among the interesting data-points were that Tapulous has had over 6 million downloads of its free app with hundreds of thousands of paid purchases of it's artist centric apps at $5 each. Nice people. great app and glad they are doing so nicely.

I highlighted that music is a true passion point for users. It's how they want to spend leisure time and get joy in spite of the economy. That time translates to money in terms of commerce and advertising. Figuring out how to be at the heart of discovery, search and / or listening are the power centers. Notable that 2 of the top 3 apps on the iPhone are music (Pandora at #1 and Shazam at 3).

The mobile phone market feels like the Internet in the mid 90's on DOS and dial up. Crappy and slow. The iPhone on 3G is a crucial platform to get a glimpse of the future. In a broadband mobile world (and we all know that 3G is still "mid band" speed at best), time spent goes way up, as does commerce and advertising. iPhone sales at 14 mm units or so last year is just a remarkable validation of consumer demand for a next gen mobile experience and the app store. Finally a way for third parties to market their products directly to consumers on mobile. Every major phone maker and service provider is rushing to replicate the app store model.

Looking forward to the app store enabling recurring revenue models / subscription and easier in product commerce.

Pandora on Blackberry

2009-03-19T16:04:00.000-07:00

It's out. Went to Pandora.com on my Blackberry Bold. Found the mobile page, clicked on Blackberry install and voila. Loaded easily. A little bit of delay on my first time log in as it found my account. Worked flawlessly on my way to San Francisco this morning. Got a call, took it and then it returned to Pandora after the call was done. Radio remains on when I went to email too... including send and receive. This is a really big deal as the iPhone does not enable multitasking like this. UI works great through I prefer the UI and bigger screen on the iPhone more, but the multitasking is quite compelling. Thanks Pandora.

Here's a link to the Boy Genius report:

http://www.boygeniusreport.com/2009/03/18/pandora-for-blackberry-finally-launches/

Social networking overtakes email

2009-03-10T14:11:00.000-07:00

Social networking is now the most popular web activity, surpassing even email, according to a new study issued by information and media firm Nielsen. Active reach in what Nielsen defines as "member communities" now exceeds email participation by 67 percent to 65 percent, the firm reports--among all Internet users worldwide, two thirds visited a social networking site in 2008. Facebook now leads the pack: Three out of every 10 web users visit the site at least once a month, and in all, Facebook experienced a 168 percent increase in users in 2008, galvanized by growth among the 35-to-49 demographic.

Mobile social networking is most popular in the U.K., where 23 percent of mobile web users (about 2 million subscribers) now visit social networks via handsets--the U.S. follows at 19 percent, or 10.6 million subscribers. Mobile social networking usage increased 249 percent in the U.K. in 2008, and grew 156 percent in the U.S. Nielsen notes that the most popular social networks via PCs and laptops mirror the most popular services on the mobile web--Facebook is the most popular in five of the six countries where Nielsen measures mobile activity, with Xing proving most popular in Germany. In addition to the mobile web and dedicated mobile social networking applications, users are also interacting with their social networks via SMS--according to Nielsen, at the end of 2008 almost 3 million U.S. users were texting Facebook on a regular basis.

For more on social networking's growth: read this Nielsen report

Read the full article here

Mary Meeker preso

2008-11-06T07:44:00.000-08:00

View SlideShare presentation or Upload your own. (tags: advertising web)

Here are Mary Meeker's slides from her presentation at the Web 2.0 conference. For a slightly more upbeat perspective, see Pascal Levensohn's VentureBeat post about the growth of innovation in economic downturns.

Webcasting Bill Passes Senate

2008-10-01T07:10:00.000-07:00

In a big step forward for Pandora, yesterday, the Senate passed HR7084. Here's what Pandora founder Tim Westergren had to say:

September 30, 2008
WEBCASTING BILL PASSED !!

This evening the Senate approved passage of HR7084. Hooray! We still have to finish up the negotiations, but now the table is set.

Thanks to everyone for your incredible support over the past few days. It was just extraordinary. We had some terrific allies on the Hill; a hearty thanks to our sponsors on the House side - Representatives Jay Inslee (D-WA) pictured on the floor below, and Donald Manzullo (R-IL), and Senators Ron Wyden (D-OR) and Sam Brownback (R-KS) who shepherded the bill through the Senate. And a special thanks to Representative Howard Berman (D-CA) for his key role as Chairman of the IP Subcommittee.

Behind all the activity within the halls of congress was the tireless advocacy by you, our listeners. None of this would have been possible without your overwhelming public support. Your voice was a constant reminder to everyone involved in this process about the importance of internet radio to music lovers and musicians alike. Your level of involvement was unprecedented. We are eternally grateful.

Thank you again for your amazing support. We will continue to keep you apprised as we work diligently to complete the process.

Jason Calcanis on Demo'ing Your Startup

2008-08-10T07:44:00.000-07:00

Jason Calcanis has come up with a great list of pointers for entrepreneurs who are presenting their startups to investors.

Paper Power

2008-06-25T09:48:00.000-07:00

This chart from the July, 2008, issue of Wired depicting the growth in pre-trial discovery documents points to H5 Technologies' enormous market opportunity.

Now I Understand Why I Never See Ads on YouTube's Home Page

2008-06-23T14:43:00.000-07:00

From the June 16th issue of Forbes magazine:

An ad on the YouTube home page ... now costs $175,000 a day, plus a commitment to spend $50,000 more in ads on Google or YouTube.

The New Norm?

2008-06-18T09:42:00.000-07:00

I really hope this isn't the new norm for funding announcements ...

[Editor's note: Here's a remixed version, courtesy of Valleywag.]

Hang in There, Yahoo

2008-04-11T10:04:00.000-07:00

Gartner believes that Microsoft is buying Yahoo because Vista has been such a colossal disappointment. It will certainly be a sad day for the Web if Microsoft succeeds with its offer. For all of its faults, Yahoo created a reason for many of us to use the Web; it elevated the browser to a new form of OS. Yahoo has also been a powerful proponent of open source software, another major trend which runs counter to Microsoft's interests. But the primary reason why Microsoft's offer is unfortunate is the impact that it will have on startups. As others have pointed out, with Yahoo's demise, there will be one less acquirer of young companies. Many might snipe that when it comes to M&A, Yahoo has been its worst enemy. Still, Yahoo has been an important player in the startup universe for a long time. Perhaps News Corp. will become more active in acquiring young companies; it certainly seems to realize that the Web is an important platform for the distribution and consumption of content. However, it will take more than News Corp. to fill the void that Yahoo will leave.

Retail Therapy

2008-02-28T15:16:00.000-08:00

Market Insight has won some prime real estate on PC World's Web site, where it provides recommendations for consumers interested in buying HDTVs, digital cameras, or notebooks. Check it out!

Glam Raises $84.6 Million Round

2008-02-25T10:17:00.000-08:00

Today, Glam announced that it has raised $84.6 million in private financing, with $64.6 million in Series D funding and $20 million in revenue-based debt financing. Here are links to Glam's press release as well as The Wall Street Journal's coverage of the deal.

Feeling Vulnerable?

2008-01-24T14:11:00.000-08:00

Palamida has released its list of the top five most overlooked open source vulnerabilities.

Often, developers embed popular open source code while developing applications that do not fall in the normal software procurement process. Businesses and users need to take ultimate care to ensure that they are up-to-date with the latest patches in order to reduce uncertainty and secure their software from security attacks.

Open source code is "not any more vulnerable than commercial software" and in some cases, less so, said Palamida CEO Mark Tolliver. Open source projects tend to acknowledge their vulnerabilities and fix them promptly, he added.

Home Is Where the Home Network Is

2008-01-08T11:10:00.000-08:00

Dean Takahashi highlights the importance of home networking at this year's CES show in Las Vegas. (By the way, Takahashi quotes an analyst from Iconoculture, a Walden portfolio company.)

The idea of home networking has been around for more than a decade. But now 34.4 million homes in the United States have computer networks, according to International Data Corp. Of those, 12.4 million homes have living room devices (game consoles, video recorders or set-top boxes) that are connected to the Internet.

That represents a big market opportunity and, as a result, gadget designers are more aggressive about designing Internet connectivity into their gadgets. It allows them to claim that the era of convergence - when computers, communications and consumer electronics are linked - has truly arrived, said Jonathan Steuer, an analyst at consumer research firm Iconoculture.

The Customer Is Always Right

2008-01-02T10:47:00.000-08:00

Interesting article in today's Wall Street Journal about the changing face of online ads. Here's an excerpt:

The Web's emergence is forcing ad executives to succumb to marketers' demands that agencies reinvent how ads are created, and forgo their TV-centric approach. Clients are even calling for changes in the way ad firms are structured. But until now, few advertisers have spent more than 5% to 10% of their marketing budgets online. With the growth of online video and social networking, ad experts expect that percentage to jump significantly this year.

Softness in the economy also will likely drive more money to the Internet, which can be cheaper than other media and has a reach that is easier to measure, which is attractive to advertisers in slower times. Merrill Lynch predicts overall ad spending in the U.S. for 2008 will grow 2.3%, while the portion of that spending on the Web will increase 18%. Publicis Groupe's ZenithOptimedia says it expects the amount spent on Internet advertising to overtake spending on radio in 2008, and spending on magazines in 2010.

Music to Our Ears

2007-12-24T10:52:00.000-08:00

Pandora ranks #17 in Consumer Reports' list of the top products of 2007.

Managing Risk

2007-12-14T09:52:00.000-08:00

Palamida recently announced an important new focus area - security. Most corporations use open source software, and Palamida helps its clients determine whether they are in compliance with open source licenses. Now, Palamida also determines whether its customers are vulnerable to over 400 open source security issues, 148 of which are defined as High-Severity Common Vulnerability and Exposures. (These include cross-site scripting and buffer overflows, to SQL injections.) As Mark Tolliver, CEO of Palamida, put it, "Open source is inherently no more risky than commercial software. The majority of open source projects provide a patched version to any issue within hours of discovery. Users of open source, however, need a way to quickly and accurately verify what components they are using and associate them with known vulnerabilities so they can retrieve updated versions. Without a mechanism in place to perform this function, organizations put themselves at risk for introducing security vulnerabilities into their code base." Here's a link to Palamida's press release on the subject.

Glam Hits the Books

2007-11-13T10:31:00.000-08:00

In this article, The New York Times' Saul Hansell writes about Glam's recently announced deal with Lifetime Networks, which he calls "a textbook example of how to co-opt potential competition":

[Glam CEO Samir] Arora has big plans for Glam. He would like to do similar deals in other categories including health, shelter and entertainment. He’s been able to attract high-powered managers including John Trimble from Fox Interactive and Joe Lagani, the publisher of Conde Nast’s House & Garden. (That’s a sure sign that Mr. Arora convinced them that either a public offering or a pricey acquisition is not that far off.)

The big question here is how many of these ad networks end up surviving. If there are many dozens, Glam may win because it locks up relationships with multiple partners. If smaller networks wither, Glam may still win because it has the right to roll up the inventory of the networks it runs into one big package that may be more appealing to advertisers.

Facebook Considers Its Options

2007-10-29T09:06:00.000-07:00

With hiring already tough in Silicon Valley, Facebook has just made its HR head's life much more difficult. Here's an excerpt from an article in today's Wall Street Journal about the company's options dilemma [subscription required].

There is a little-noticed downside to Microsoft Corp.'s investment in Facebook Inc.: The deal will likely raise the price of stock options issued by the social-networking company and could make it more difficult to hire talented employees.

Last week, Facebook appeared to score a major victory when Microsoft said it would invest $240 million in the Palo Alto, Calif., start-up, in exchange for a 1.6% stake. The investment values Facebook at $15 billion, up significantly from last year when a financing round valued the company at $525 million, according to a person familiar with the matter. Microsoft's investment cemented Facebook's reputation as one of the hottest Web start-ups in Silicon Valley.

With the rise in valuation comes a rise in the value of employee stock options. And in Silicon Valley, where stock options can be a major component of employee pay packages, more expensive stock options mean less potential upside for the option holders once start-ups go public or are sold.

Pandora Gets Some Ink in Inc.

2007-09-28T14:39:00.000-07:00

Inc. magazine has a cover story on Pandora in its latest issue. Here's a link to the story, and here's an excerpt:

Westergren realized he had a huge weapon in his arsenal: his customers. Westergren sends a welcome e-mail to everyone that signs up. It's an automated e-mail from an alias address, but whenever anyone replies, he replies back. Last year, when he was touring the country looking for new music, Westergren decided to begin holding meetings with listeners. He'd choose a locale, post it on the Pandora blog, and invite anyone in the area to attend. Four people attended the first meetup in Austin, but as he traveled to a senior center in Phoenix, a taco joint in San Antonio, and a lecture hall at MIT, the groups grew, and soon dozens, even hundreds, of listeners were attending. All the effort spent courting nonpaying customers might seem excessive, but it lets Pandora spend next to nothing on marketing. In any case, the listeners responded. Some have become so fanatic that they've written songs about the site, sent boxes of fudge, and even made donations.

That work turning customers into fans, Westergren realized, meant he could rally them behind the royalty rate issue. So he sent an e-mail to all the Pandora listeners that identified their representative and senator and asked them to write in. Pandorans responded. Westergren estimates that about one million e-mails, phone calls, or faxes were made or sent by Pandora listeners. California Democratic Senator Dianne Feinstein received 25,000 e-mails; in the office of Jay Inslee, a Seattle-area representative, correspondence about Internet radio equaled that concerning the Iraq war. Inslee and Illinois Representative Don Manzullo drafted a bill that brought Internet radio rates in line with those of satellite stations; in the Senate, Sam Brownback and Ron Wyden sponsored a companion bill. "I said, 'Oh, my gosh, this is a bombshell ready to explode with the small radio stations,'" says Manzullo.

Evidence Machine

2007-09-24T09:45:00.000-07:00

H5 receives prominent coverage in this week's Forbes. Here's a link to the article [membership required] and an excerpt:

Corporations are evidence machines, generating terabytes of electronic documents, e-mails and digitally recorded phone calls each year. Lawyers try to sift through all this dross in search of the smoking gun that can determine the outcome of a case. But, so say studies by library scientists and others, the lawyers aren't very good at sifting. Worn down by the anesthetizing process of flipping through thousands of digital images a day, they miss as much as they find. That's where a San Francisco company, H5, comes in. "Our work is to discover the ideal narrative to walk into court with," says Nicolas Economou, 42. "We give you the bullets designed to win."

Mexico or Bust

2007-09-23T09:29:00.000-07:00

This article about Pandora in today's Oakland Tribune adds a little color to Tim Westergren's recent article in VentureBeat.

"At our worst moment, we were being evicted from our office, sued by four employees for back pay," Westergren said. "We owed almost $1.5 million in back salaries. We were living on credit cards: I was making plans to go to Mexico."

Instead, he went on the road — meeting potential investors, making constant pitches.

When it was over, the cash was in hand. He said he went back and counted how many times he spoke to investors in four lean years.

"I just kind of kept going. We had survived the bust when no one else had and we had built a pretty significant data base," he said.

Finally, Larry Marcus, managing director of Walden Venture Capital of San Francisco, got on board, followed by Labrador Ventures of Palo Alto.

Funding finally came on his 348th pitch, Westergren said.

Motivated Investors

2007-09-11T09:42:00.000-07:00

Check out this article in VentureBeat by Pandora founder Tim Westergren. In "What Motivates an Investor to Say 'Yes,'" Westergren explains that he was turned down 347 times before Walden's Larry Marcus agreed to invest the first institutional capital in Pandora. Here's an excerpt:

As I reflect back on this most unlikely turn, I have come to a belief about what motivates an investor to say ‘yes.’ Or perhaps more accurately, what causes an investor to shift from looking for ways to say ‘no’ to looking for ways to say ‘yes’. For, in my mind, this is the key to raising money. Venture investments by their very nature require a leap of faith (none more than ours) that only comes when an investor becomes aspirational – when he or she wants the investment to make sense (even though statistically deals never do make sense). I believe that shift happens when three things come together for the investor: They personally believe in the entrepreneur; they have a sense (and it’s often just a gut feeling) that the idea could be very big; and finally they have a personal interest or background in the industry that gives them a leg up the diligence curve. Put these together and an investor will start bending their investment criteria.

Larry M. was a musician (or at least a drummer) and an avid student of digital media. In the Music Genome Project he saw an idea that could be big, and as an expert in the sector he had the confidence to trust his own ability to spot potential, even if it was buried in mud. We also got along very well personally. So we had the three ingredients that tipped him into the aspirational mode. He wanted to make the investment and we started working together to make it happen – convincing his colleagues and other investors.

Yahoo to Acquire BlueLithium

2007-09-04T16:37:00.000-07:00

Here is an excerpt from Yahoo's press release, which is available here.

Yahoo! Announces Agreement to Acquire BlueLithium

Important Next Step in Yahoo!'s Mission to Lead the Transformation of How Advertisers Connect To and Engage With Their Customers

SUNNYVALE, Calif. & SAN JOSE, Calif., Sep 04, 2007 (BUSINESS WIRE) --

Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company, today announced that it has entered into a definitive agreement to acquire BlueLithium, one of the largest and fastest growing online global ad networks that offers an array of direct response products and capabilities for advertisers and publishers. Under the terms of the agreement, Yahoo! will acquire BlueLithium for approximately $300 million in cash.

"BlueLithium's products, technology and team will be an integral part of our drive to build the industry's leading advertising and publishing network," said Jerry Yang, chief executive officer, Yahoo! Inc. "This acquisition will extend our ability to deliver powerful data analytics, advanced targeting and innovative media buying strategies to our customers, who are increasingly looking for these insights. By leveraging BlueLithium's complementary expertise and tools, we will be able to better address the needs of our performance-based display advertisers and enhance the value of our publishers' inventory."

Survey Says ...

2007-07-25T12:13:00.000-07:00

The iPhone numbers are out, and they are disappointing. In a study conducted with IDC in June, Market Insight predicted that this would be the case.

Here's an excerpt from the joint press release:

The survey, designed to gauge consumer interest in the iPhone, found that only 10% of respondents were interested in paying full price and signing a two-year contract with AT&T, the only carrier currently slated to offer the device. AT&T has stated that it will not offer a subsidy for the iPhone, which will retail for $499 and $599, depending whether the subscriber wants 4GB or 8 GB of flash memory. Nearly 18% of the respondents indicated a willingness to buy the iPhone if it were priced under $299.

In addition to the cost of the device itself, the survey identified the cost of switching carriers as a deterrent to iPhone adoption. Given the widespread use of two-year carrier agreements with large penalties for early contract termination, consumers cannot easily change carriers whenever they want, wireless number portability notwithstanding. About 17% of the respondents indicated that they would buy an iPhone if it were offered by their current mobile carrier.

Mr. Fix It

2007-07-17T10:43:00.000-07:00

In an article in today's Wall Street Journal, Pandora's Tim Westergren provides an inside look at ongoing discussions regarding music royalty rates for Internet broadcasters.

Both sides have more incentive to talk after a closed-door meeting with members of Congress last week. The message was, "Fix it," says Tim Westergren, founder of Pandora Media Inc., which allows users to create customized online radio stations. "If you don't, there's a bill waiting in the wings," he said referring to legislation on royalty rates introduced in both houses.

Clock Watchers

2007-07-10T11:05:00.000-07:00

This development (which is reported in today's Wall Street Journal) bodes well for Pandora, whose users spend many hours on the site each month.

Nielsen/NetRatings, a leading online-measurement service, will scrap rankings based on the industry yardstick of page views and begin tracking how long visitors spend on Web sites.

The move, expected to be announced Tuesday, comes as online video and new technologies increasingly make page views less meaningful.

Although Nielsen already measures average time spent and average number of sessions per visitor for each site, it will start reporting total time spent and sessions for all visitors to give advertisers, investors and analysts a broader picture of what sites are most popular.

Currently, sites and advertisers often use page views, a figure that reflects the number of Web pages a visitor pulls from a site.

Glam Shows That Beauty Is More Than Skin Deep

2007-06-18T08:41:00.000-07:00

Now pulling in more than 17 million unique visitors a month, Glam has surpassed iVillage on ComScore Media Metrix's Top 10 list of Women's Community Web Properties. It is also the fastest-growing 100 Web property year over year ending May, 2007. Here's the press release. Also, check out Matt Marshall's story on Glam in today's VentureBeat. Here's an excerpt:

The trends helping Glam are strengthening, [Glam CEO Samir Arora] says — as new blogs get created and advertisers search for new ways to reach readers beyond traditional media. “The deeper we go into this,” said Arora in an interview with VentureBeat last week, “the more it seems the fragmentation has increased. It is deeper and wider than we thought.”

Glam Teams Up with Google

2007-06-04T09:50:00.000-07:00

The Wall Street Journal has a story in today's issue about Glam and Google. Here's an excerpt:

Glam Media Inc. plans to announce today that Google Inc. will begin brokering advertisements on Glam's fashion and lifestyle sites and some of the more than 300 blogs and sites affiliated with the company.

The agreement is part of Google's efforts to broker advertisements for high-end sites such as Glam, as the Internet giant tries to lure big-brand advertisers to purchase ads through its online system and expand aggressively in selling graphical and video ads.

Under the multi-year deal, Google will sell some of the video ads and graphical display ads such as banner ads that appear on Glam's sites, including its flagship Glam.com. Google will also provide search technology and sell small text ads that will appear alongside Web search results and selected content on Glam's sites and partner sites that opt for it.

Everywhere at Once

2007-05-23T14:08:00.000-07:00

Last night, Pandora launched the Pandora Everywhere platform, which encompasses Sprint mobile phones, Sonos home music adapters, and Xing handheld devices. Here is the Techcrunch story. The announcement was also covered by Wired, CNET, PC Magazine, Engadget, Gizmodo, Valleywag, VentureBeat, San Francisco Chronicle, Associated Press, CNN Money, Billboard Online, GigaOm, Scobleizer, USA Today, CBS News ... The list goes on.

Made to Measure

2007-05-15T05:41:00.000-07:00

In its current issue, BusinessWeek explores the resasoning behind recent M&A activity in the online advertising sector and calls out BlueLithium as a company to watch.

Now marketers are spoiled. And as big-brand advertisers move online in greater force, they're demanding the ability to apply the same kind of targeting and measurability they get from paid search to all the other ads they run. "Everybody's got the mindset that everything should be measurable," says Erik Qualman, head of North America marketing for travel site Travelzoo Inc. (TZOO) One reason: While targeted ads online may cost about twice as much as untargeted ads, they can produce twice the return on investment. As a result, says David R. Verklin, chief executive of Carat Americas, the agency that buys online ads for the likes of Pfizer Inc. (PFE), "data and data analytics are the next big battleground in marketing."

And on the Internet. Ad networks such as Specific Media, Blue Lithium, and 24/7 Real Media (TFSM) appear to be on the short list for acquisition by major media and tech companies.

Make Music, Not War

2007-05-14T08:38:00.000-07:00

The Defense Department has decided to block soldiers' access to a number of popular Web sites, including Pandora.

"This recreational traffic impacts our official DoD network and bandwidth ability, while posing a significant operational security challenge," [a Defense Department] memo said.

The armed services have long barred members of the military from sharing information that could jeopardize their missions or safety, whether electronically or by other means.

The new policy is different because it creates a blanket ban on several sites used by military personnel to exchange messages, pictures, video and audio with family and friends.

Members of the military can still access the sites on their own computers and networks, but Defense Department computers and networks are the only ones available to many soldiers and sailors in Iraq and Afghanistan.

Verizon to Acquire Cybertrust

2007-05-14T05:53:00.000-07:00

Walden is proud to announce that Verizon has agreed to acquire Cybertrust. Here's a link to the release.

Verizon Business today announced a definitive agreement under which it will acquire Cybertrust, a privately held provider of global information security services. Financial terms were not disclosed.

The combination will make Verizon Business the leading provider of managed information security services to large-business and government customers worldwide. By combining Cybertrust’s global presence and customer base, focused security expertise and professional services with Verizon Business' “cloud-to-core” security portfolio, global IP network and financial strength, the acquisition creates a powerful and unique player that will redefine the global security landscape.

Google/DoubleClick Backlash

2007-05-09T09:38:00.000-07:00

According to The New York Post, Google's pending acquisition of DoubleClick has stirred up concern in the advertising world that Google will hold too much power. As as result, demand for BlueLithium's services has never been greater. Here's an excerpt from the article:

DoubleClick swears the information it collects about its customers ad campaigns can't be shared with Google, which already dominates the lucrative market for search advertising, without running afoul of its long-term contracts with clients.

But few in the ad business are buying it. Many believe Google will find ways to leverage DoubleClick's display data to increase its Internet ad clout.

Some suggest Google and DoubleClick set rules sooner rather than later to avoid the inevitable conflicts.

"They are going to have to write some rules of engagement on the type of information that can be shared," said Gurbaksh Chahal, chief executive of online ad company BlueLithium. "It will be interesting to see them."

Warner Music Group Teams Up with SNOCAP

2007-05-01T09:33:00.000-07:00

Warner Music Group announced yesterday that it will use SNOCAP to sell tracks on MySpace.

Internet Radio Equality Now!

2007-04-29T20:11:00.000-07:00

Thanks to the millions of people who have contacted their representatives directly or through the auspices of organizations like SaveNetRadio.org, Rep. Jay Inslee (Democrat, Washington), Rep. Donald Manzullo (Republican, Illinois), and ten co-sponsors have introduced the Internet Radio Equality Act. This bill will invalidate the Copyright Review Board's recent ruling to increase royalty rates for Internet radio broadcasters and require that Internet radio broadcasters pay no more than satellite radio broadcasters. If you haven't registered your support for Internet radio, please stand up and be counted. The world will be a very boring place without it.

Glam in WSJ

2007-04-25T09:56:00.000-07:00

Glam received prominent coverage in an article in The Wall Street Journal entitled "Web Network Offers Reebok Flexibility." Here's an excerpt:

When Reebok launched a new line of shoes and apparel endorsed by actress Scarlett Johansson last month, it took a different approach to Internet marketing. Instead of buying ads on mass-audience portals like MySpace, as it had done for past campaigns, Reebok struck an exclusive online deal with fashion and lifestyle Web concern Glam Media.

Glam worked with Reebok International, a unit of Adidas AG, to put together a marketing campaign aimed at young women that ranged from the traditional -- banner ads -- to less-traditional promotions that looked more like editorial features, such as interactive quizzes about Ms. Johansson and mentions in Glam blogs.

And the ads didn't show up just on Glam.com. Glam has assembled a network of roughly 300 similarly themed blogs, Web sites and magazines that it links to -- broadening Glam's reach. Glam's female-oriented network drew 10 million unique U.S. visitors in March, making it the second-largest women's online property after NBC Universal's iVillage, according to comScore Media Metrix.

"You are not just hitting one portal; you have thousands of these other sites. By showing up incrementally on these other sites, you are getting more bang for your buck," says Marc Fireman, head of digital marketing for Reebok.

Walden Invests in Telekenex

2007-04-16T16:56:00.000-07:00

We are pleased to announce that we have invested the first institutional capital in Telekenex, a profitable, business-grade IP service provider for small to medium-sized businesses. Here are the details.

Standards Procedure

2007-04-11T11:46:00.000-07:00

The final release of the open source GPL version 3 license is about to go live, and Palamida CEO Mark Tolliver has been very popular with reporters who are trying to gauge the impact of the shift.

"GPL 3 will certainly force awareness of licensing issues to grow, tools like ours or others that can detect and report on licenses and incompatibilities will be a standard part of peoples' IP use and software development environment," Tolliver said.

"To operate without that in this world of increasingly complex licensing will be more difficult and more risky."

Clay Aiken and Ron Sexsmith? Yikes!

2007-03-29T10:39:00.000-07:00

The New York Times features Pandora in an article about Internet radio and calls it the "simplest option." It also highlights Pandora's superior personalization.

Now that the free ad-supported service has been operational for 15 months, it can use the behavioral data of its six million listeners to add a new layer of suggestion. For instance, even if, on paper, the musicologists think it logical to pair a song by the “American Idol” superstar Clay Aiken with one by the Canadian folk balladeer Ron Sexsmith, several hundred listeners may give the juxtaposition a vote of no confidence. Tim Westergren, a Pandora co-founder, says the database now contains half a billion useful points of “contextual feedback.”

H5 Is Cool

2007-03-16T13:34:00.000-07:00

H5 Technologies was one of only four companies included in a report by Gartner entitled Cool Vendors in Content Management, 2007.

Said Gartner Senior Research Director Debra Logan, "Any method or technology that can reliably and transparently help with a process, and thus reduce the amount of time lawyers spend on it, doesn’t have far to go to make it a worthwhile investment. H5 acknowledges that it is tackling a complex set of issues and bringing high-level expertise to bear on the problem."

Here's a link to the press release.

The Source

2007-03-14T13:26:00.000-07:00

Palamida announced today that it has increased the size of its compliance library even further. This library now includes:

Over 780,000 open source project versions
140,000 unique open source projects
10 million Java names
Over 392 million open source files
Nearly 7 billion source code snippets
Over 390 million binary files

Do you know what's in your code? Maybe it's time to talk to Palamida.

Thinking Ahead

2007-03-05T13:56:00.000-08:00

When I go to BestBuy, I am just as interested in the products that miss as the gadgets that everybody wants. Consider the Kodak EasyShare C743, which CNET rates as one of "the worst tech of Q4 2006." One word comes to mind when you hold this camera in your hand: cheap.

Consumer electronics companies end up making cameras like the C743 because they don't have an efficient way to test consumer interest in different product attributes. Traditional focus groups are difficult and expensive to organize, and sample sizes are small. Online panels help companies gather feedback much more quickly, but they often suffer from sample bias. (The problem of "professional respondents" - or people who take particular pleasure in participating in as many panels as possible - is well-known.)

Market Insight takes a different approach. This Palo Alto startup operates six free product advisors on MyProductAdvisor.com that help consumers pick the best product for their needs. One example is TVs. If you've ever tried to buy a High Definition set, you know that number of choices is bewildering. Market Insight's TV advisor steps you through the various choices and allows you to rate the importance of different product attributes through the use of sliders. The consumer data that Market Insight gathers through these product advisors is rich, immediate, and unbiased, and it enables Market Insight customers like General Motors, Palm, and Intel design and market products that customers in the market actually want.

Traditional market research is reactionary. It relies on small sets of dated data; it is project-based; and it is primarily used to optimize products that are already out in the market. But as the consumer feedback loop continues to shorten, it will become more and more expensive for companies like Kodak to market short-sighted products like the C743. Forward-looking, strategic market research will become the norm, not the exception.

Buzzworthy

2007-02-10T10:32:00.000-08:00

An interesting article in today's Wall Street Journal about "buzz sites" like Digg. [Subscription required.]

Though it can take hundreds or thousands of votes to make it onto the hot list at these sites, the Journal's analysis found that a substantial number of submissions originated with a handful of users. At Digg, which has 900,000 registered users, 30 people were responsible for submitting one-third of postings on the home page. At Netscape.com, a single user named "STONERS" -- in real life, computer programmer Ed Southwood of Dayton, Ohio -- was behind fully 217 stories over the two-week period, or 13% of all stories that reached the most popular list. (Netscape, which gained fame with its namesake browser, is now owned by Time Warner's AOL unit and operates a news site.)

On Reddit, one of the most influential users is 12-year-old Adam Fuhrer. At his desktop computer in his parents' home in the quiet northern Toronto suburb of Thornhill, Mr. Fuhrer monitors more than 100 Web sites looking for news on criminal justice, software releases -- and the Toronto Maple Leafs, his favorite hockey team. When Microsoft launched its Vista operating system this year, he submitted stories that discussed its security flaws and price tag, which attracted approving votes from more than 500 users.

DivineCaroline.com Is Live

2007-02-05T09:56:00.000-08:00

Real Girls Media has officially launched DivineCaroline.com, "a place where women come together to express themselves, find answers and share life through storytelling." Check it out!

Let's Get Small

2007-01-29T14:13:00.000-08:00

Who says bigger is better? Here's an excerpt from Matt's latest piece on SandHill.com:

We continue to hear entrepreneurs tell us that they can find very few good firms willing to lead a deal that needs less than $5 million. In my experience, some of the best founders don't want or need a first round that size. I am hoping that more funds will focus on small, early deals as we have been doing here at Walden.

Glamming It Up

2007-01-10T09:14:00.000-08:00

The trend is Glam's friend. Today, the company announced that it had taken second place on comScore's Media Metrix Top Ten Women's Web Properties list for December 2006. Glam Media recorded 8 million US unique visitors in December, representing more than a 100% increase over the month of November and an increase of over 2,666% year-over-year. As a result, Glam was the fastest-growing of top 500 Web properties in 2006 according to Media Metrix.

Pandora Goes Social

2006-12-20T10:08:00.000-08:00

Check out today's Techcrunch for a discussion of Pandora's new social networking capabilities.

Stand Up and Be Counted

2006-12-16T18:39:00.000-08:00

Interesting news from the Census Bureau's 2007 Abstract of the United States ...

Among adults, 97 million Internet users sought news online last year, 92 million bought a product, 91 million made a travel reservation, 16 million used a social or professional networking site and 13 million created a blog.

Glam Raises $18.5 Million Series C Round

2006-12-14T11:33:00.000-08:00

Here are the details ...

"In one year from launch, Glam Media has created a unique online media company reaching over 7 Million unique visitors a month," said Samir Arora, chairman and founder of Glam Media. "Glam's vision is to bring together the best content from traditional and indie publishers with emotive brand advertising to create the first contextual Web network."

Speak Up!

2006-12-06T09:57:00.000-08:00

Yesterday, Larry Marcus spoke on panels at Digital Living Room and an IBDNetwork event. Here are the details:

DIGITAL LIVING ROOM
Shaping the Landscape for the Digital Living Room

What are the business opportunities and challenges facing solution providers for the digital living room? We evaluate the dominant technologies, applications and services all competing to control the consumers' access to content. Broadband Internet, consumer electronics devices, mobile and wireless; portable players; networks. How do we determine the economic value of these services and products against digital rights protections for content owners? Our experts give an overview of nearterm and longterm predictions for the digital home market to help you develop a successful strategy.

Moderator: Michael Stroud, CEO iHollywood Forum
Nick Chakalos, Senior Director, Software Product Management
Connected Home Solutions, Motorola, Inc
Evan Young, Director of Broadband Services, Tivo
Stuart Cleary, Director, Broadband Content Services, Verisign
Jay Gill, S. Manager IBSG Service Provider Solutions, Cisco
Larry Marcus, Managing Director, WaldenVC

IBDNETWORK
VC Outlook for 2007

Join IBDNetwork for its last event in 2006 featuring four venture firms who will discuss and defend their views on the 2007 tech market. In this roundtable discussion, feel free to contribute your own thoughts but be prepared to back them up!

Discussion points include:

- What sectors are poised for growth?
- What sectors are poised for consolidation?
- Top favorite companies?

MODERATOR:
Mark Albert, Partner, Perkins Coie

PANELISTS:
BA Venture Partners - Sharon Wienbar
SAP Ventures - Jai Das
WaldenVC - Larry Marcus

MSN Radio Never Sounded So Good

2006-11-21T09:52:00.000-08:00

Pandora is now powering MSN Radio.

Keeping It Real

2006-11-16T15:09:00.000-08:00

Real Girls Media announced that it has received funding from WaldenVC and 3i. Here are the details.

By combining editorial, user-generated content, and community, Real Girls Media Network aims to build the leading online destinations that address the totality of women's lives, not just specific life events. Unlike existing advertising-supported Web sites, RGM will enable women of all ages to easily submit and publish their opinions and stories. The first Web site, DivineCaroline.com, which is due to launch in early 2007, is targeted for women aged 25 to 54. Additional sites aimed at other age groups will follow in 2007.

"Our unique offering allows real voices to publish like professional writers. We have invested in our proprietary technology to provide a simple process to enable access to the highest end publishing environments to women of all views, walks of life, and experiences," said Kate Everett Thorp, CEO of RGM. Member-written stories, reviews, and related photos will appear alongside staff-written articles about everything from parenting to careers. "Beyond editorial and user-generated content," Thorp said, "our properties will provide traditional community services such as reviews and forums to complete the connection of women, their purchasing power, and their influence in a centralized destination."

Palamida Emerges from the Pack

2006-11-13T14:14:00.000-08:00

The Silicon Valley/San Jose Business Journal named Palamida as an Emerging Technology Award Finalist.

"We are excited to recognize the achievements of these emerging companies in technology-rich Silicon Valley," said Vintage Foster, publisher of the Silicon Valley/San Jose Business Journal. "The companies we are celebrating have pioneered technologies with the potential to profoundly impact people and their businesses."

Web 2.0 on the Bubble?

2006-11-07T18:10:00.000-08:00

The Mercury News published an interesting observation from the always quotable Ross Mayfield about the Web 2.0 Conference that is going on this week in San Francisco ...

"The downside to the conference's success is that Web 2.0 may become the name of the bubble itself."

GigaOm's Om Malik certainly seems to think so ...

Gut Check

2006-11-07T10:03:00.000-08:00

Analysts who cover Amazon may not be crazy about Jeff Bezos' new offering, but startups certainly should be ...

Amazon has spent 12 years and $2 billion perfecting many of the pieces behind its online store. By most accounts, those operations are now among the biggest and most reliable in the world. "All the kinds of things you need to build great Web-scale applications are already in the guts of Amazon," says Bezos. "The only difference is, we're now exposing the guts, making [them] available to others."

And, he hopes, making money. With its Simple Storage Service, or S3, Amazon charges 15 cents per gigabyte per month for businesses to store data and programs on Amazon's vast array of disk drives. It's also charging other merchants about 45 cents a square foot per month for real space in its warehouses. Through its Elastic Compute Cloud service, or EC2, it's renting out computing power, starting at 10 cents an hour for the equivalent of a basic server computer. And it has set up a semi-automated global marketplace for online piecework, such as transcribing snippets of podcasts, called Amazon Mechanical Turk. Amazon takes a 10% commission on those jobs.

Bezos is initially aiming these services at startups and other small companies with a little tech savvy. But it's clear that businesses of all kinds are the ultimate target market. Already, Amazon has attracted some high-powered customers. Microsoft Corp. (MSFT ) is using the storage service to help speed software downloads, for instance, and the service is helping Linden Lab handle the crush of software downloads for its fast-growing Second Life online virtual world. Highly anticipated search upstart Powerset Inc. plans to use the Amazon computing service, even though it's still in test mode, to supplement its own computers when it launches its service sometime next year. And the search engine marketing firm Efficient Frontier uses Mechanical Turk to determine the most effective keywords that drive traffic to Web sites.

Palamida Is in Good Company

2006-11-03T09:35:00.000-08:00

Yesterday, Palamida's Mark Tolliver was on stage with Microsoft's Steve Ballmer and Novell's Ray Lane to announce Microsoft's pact with Novell to support broad collaboration on Windows and Linux interoperability and support. Here's an excerpt from an article in eWeek:

Mark Tolliver, chief executive of San Francisco-based Palamida, who was on hand at the news event to support Microsoft's play, said, "I think this just raises the idea that people who use software need to be informed customers."

Tolliver likened the situation to that of the world of processed foods, where consumers can find out the nutritional makeup of the goods they purchase. The same should be true for software, he said. And Palamida's software enables enterprises to gain visibility into their software code bases and find out whether there is open-source code present and which licenses apply.

Tolliver said the Microsoft deal with Novell makes plain that more enterprises will need to take stock of what exactly is in their code, and opens opportunity for companies like Palamida.

"We're moving into a zone in the software world driven by this mixed open-source/proprietary-source community, and with commercial software having to intermingle with this huge amount of open-source software," Tolliver said.

He said Palamida was invited to the announcement by Microsoft, which "has been one of our customers for some time," and that Microsoft asked Palamida to sit in as a domain expert. "Our role was to be on hand as a firm who spends all day everyday on intellectual property and license compliance issues."

Here's a description of the day's events from Palamida's blog.

Myth Busters

2006-10-19T10:03:00.000-07:00

In an article in Silicon Valley Watcher, BlueLithium "burst[s] the myth of contextual ads."

The conventional wisdom, as proposed by Google et al, is that placing advertising on a web page in its context gets the best results. Mortgage ads on mortgage pages, etc. In fact, Google recommends to its AdSense partners that Google ads should blend into the page, same colors etc.

BlueLithium, the online ad network, says that this isn't true when it comes to serving ads based on users' behavior. Its BL Labs research division found that out-of-context ads perform better ...

Picking Apart the VC Model

2006-10-16T09:43:00.000-07:00

Check out Matt's most recent post on SandHill.com. Here's an excerpt:

We may be best-served to return to the old days of venture capital with smaller funds, earlier stages, smaller investments and more hands-on VCs. At a time when companies are more capital-efficient than ever, some firms have become too large to make appropriately modest investments. Their model can force the GP to invest too much money at each deal and sit on too many boards to truly add value.

No Fooling

2006-10-16T09:37:00.000-07:00

The Motley Fool weighs in on Internap's acquisition of VitalStream.

... Internap, long known for handling bandwidth, will blend VitalStream's network into its own, which would, at least in theory, substitute for the Akamai services it is selling. And that seems to be a pretty strong business. SEC filings show that Internap derived $5.2 million, or 11.8%, of its revenue in the current quarter from partners. What's more, that business was up 29.4% year over year.

Meanwhile, VitalStream has been flourishing. Revenue and gross profit have risen by a compound annual growth rate of 52.4% and 47.2%, respectively, over the past three years. And a recent deal for Eonstreams put the company front and center in enabling streamed video advertising.

So, yeah, this deal poses problems for Akamai, but they're minor in comparison with the overall opportunity. Accustream media research reports that total video streams over the Web have increased to 18 billion last year from 284.6 million during 1998. That's an average growth rate of -- wait for it -- 70% (!) annually.

Internap To Acquire VitalStream

2006-10-12T08:58:00.000-07:00

ATLANTA – October 12, 2006 – Internap Network Services Corporation (NASDAQ: INAP), a leading provider of performance network services over the Internet, today announced it has reached a definitive agreement to acquire VitalStream Holdings, Inc. (Nasdaq: VSTH). VitalStream is a leader in audio and video streaming services and a global provider of integrated rich media content delivery services that enable businesses to broadcast digital media content to worldwide audiences via the Internet.

“The marketplace for content delivery services is rapidly expanding as the needs for companies to integrate streaming audio and video into their Web presence become more critical and more complex. The combination of VitalStream’s content delivery services and our high performance intelligent route control solutions positions us to create the market leading platform for distribution of rich media content and advertising” said James P. DeBlasio, chief executive officer of Internap. “We will offer our combined customers a wider range of complementary products providing peak website performance, global scalability and new revenue opportunities including content monetization and on-line advertising. Together, we expect to become a formidable force in the rapidly growing streaming media and content delivery market.”

Under the terms of the transaction, Internap will issue approximately 11.9 million shares of common stock in respect of outstanding VitalStream common shares, which will represent approximately 26% of the combined company’s shares. This is an exchange ratio of 0.5132 Internap shares for every VitalStream share. In addition, Internap will assume VitalStream’s currently outstanding stock option plans. Based on the closing price of Internap’s stock on October 11, 2006, the transaction is valued at an aggregate purchase price of approximately $217 million. The acquisition is expected to close by the first quarter of 2007.

Read the full press release here.

Do the Math

2006-10-11T08:59:00.000-07:00

Interesting article in The Wall Street Journal on the economic rationale behind Google's purchase of YouTube. [Subscription required.]

Google paid about $23 per YouTube unique visitor, 10 cents per trailing 12-month page views and 10 cents per trailing 12-month minutes of use, Bear Stearns analyst Robert Peck said. In comparison, Peck said, Google trades at 14 cents per trailing 12-month page views and 37 cents per trailing 12-month minutes of use.

"This is reasonable in our view, given Google's longer operating history and its more favorable earnings and free cash flow profile," Peck wrote in a research note. YouTube, which was only launched in 2005, gets about 34 million unique visitors each month, according to Nielsen/NetRatings.

... Peck also compared the YouTube deal to Google's partnership with MySpace and the $1 billion price tag that Facebook reportedly is seeking. In terms of unique visitors, YouTube is priced at a premium to the MySpace deal - which is only a partnership, not an acquisition - but at a discount to Facebook. On page views and times online, YouTube is priced at a premium to both.

... Citigroup analyst Mark Mahaney projected YouTube generating $224 million in 2007 revenue and $112 million in earnings before interest, taxes, depreciation and amortization, which would be a percentage of his 2007 Google estimates for $10 billion in revenue and $6.4 billion in Ebitda.

Mahaney noted that the $1.65 billion price tag valued YouTube at 14.7 times Ebitda, below the 19 times 2007 enterprise value/Ebitda multiple that Google currently trades at.

"Not bad," Mahaney said. Citigroup has provided banking services to Google.

Social Networks Splinter

2006-10-02T09:36:00.000-07:00

The Wall Street Journal wonders today whether the social networking world is beginning to splinter. [Registration required.]

Last month, Piczo attracted 10.2 million unique visitors, compared with Facebook's 15.5 million visitors, according to comScore World Metrix, a Web-tracking division of comScore Networks Inc. Piczo is also the No. 1 social-networking site in Canada, according to Chief Executive Jeremy Verba. The site's success has puzzled even its own founder, former software developer Jim Conning. "I didn't wake up one day and say, 'I'm going to start a Web site for teenage girls,'" the 40-year-old says.

The rise of these social-networking sites is another sign of the shifting tastes on the Internet, as niche audiences flock to new alternatives to MySpace and Facebook. That potentially spells trouble for those two incumbents.

The proliferation of these social-networking sites also comes as deal-making in the sector heats up. Big media and Internet companies, eager to gain more access to the young people who gravitate to social-networking sites, have recently eyed companies like Facebook. Facebook is in serious discussions to sell itself to Yahoo for an amount that could approach $1 billion. And last year, Rupert Murdoch's News Corp. bought MySpace for $650 million and quickly turned the site into a lucrative ad and promotional machine.

For now, however, the new sites are taking a modest approach to attracting visitors. Instead of trying to get people to ditch their MySpace and Facebook accounts, they're persuading kids to sign up for a third or fourth social-networking site, along with the ones they already use. "People used to pop up and say, 'We're a better MySpace,'" says Ben Bajarin, an analyst at the Campbell, Calif., research firm Creative Strategies Inc. "Now, all those sites have started to say, 'Well, we can't displace MySpace -- but we're complementary to MySpace.'"

This kind of evolution is inevitable, as the proliferation of cable television channels suggests, and it was one reason why we decided to invest in Real Girls Media, a digital network created by women for women. (There were many other reasons, of course, the principal one being our faith in Kate Everett-Thorp, RGM's CEO.) Glam - through its GlamSpace offshoot - also appeals to a very targeted niche of consumers who are interested in fashion.

Yes, there are too many social networks, but many of these are taking a completely undifferentiated approach to the market. A large number of these sites are chasing the same gaggle of high school and college students who are perfectly happy using MySpace and Facebook. RGM and Glam are definitely taking a different approach.

The Eyes Have It

2006-09-20T15:08:00.000-07:00

In its October issue, Business 2.0 features BlueLithium in a story about technology's "next disruptors," or companies whose innovations are "game changers." That's BlueLithium CEO Gurbaksh Chahal in the picture above, picking eyeballs. (Eek.)

Glam Hits the Catwalk

2006-09-15T11:04:00.000-07:00

Glam has launched a new social network for fashionistas. Here's a link to the press release.

"Fashion and style are converging more and more to bring together designers, celebrities and fashion-obsessed fans," said Samir Arora, founder and chairman of Glam Media. "For example, consider the ever-increasing popularity of celebrity events, fashion weeks and TV shows such as Project Runway. As more and more time is being spent online, we recognized the need for a social network for fashion and style, a unique environment to help people to network to be discovered."

Glam Takes "Central" Stage

2006-09-13T10:34:00.000-07:00

Glam received a nice mention in The Wall Street Journal yesterday. [Subscription required.]

... [T]oday, a year-old company called Glam Media plans to launch a new fashion blog-ranking system called GlamCentral that will use criteria such as "most viewed," "most linked to" and "most commented on." Chief Executive Samir Arora says the new rankings will be useful to advertisers and fashion publicists, as well as Glam itself, which is looking to buy blogs.

"This is going to be the YouTube of the fashion world," says Mr. Arora. Scheduled for release next quarter is a search feature that will enable users to look through fashion blogs to find a particular string of text.

Real Girls Media

2006-09-11T14:55:00.000-07:00

Real Girls Media's Web site is live. Check it out.

We're providing a new way for women - young and older - to reach out, find out, express themselves, connect, share their experiences and ultimately give - and get - something of value.

RGM sites combine real voices with guided editorial and the dynamism of an online community. Through our proprietary technology, we enable users to easily submit - and automatically publish - their thoughts and stories. And we give all visitors a variety of ways to engage with the content and the community.

Our flagship site, launching in 2007, is called DivineCaroline. It's a real place for 25-54 year old women. Whether you've got a lot - or a little - to say about your kids, your career or your world, you can say it here. Your words will be published right alongside those of your sisters and those of professional writers.

Eventually our network will consist of multiple sites and resources serving different age groups.

Great New Addition at BlueLithium

2006-09-07T12:39:00.000-07:00

BlueLithium has appointed Scott Kauffman to the new position of President and COO.

"I'm excited to join BlueLithium, which is leading the way for a new generation of ad networks," said Mr. Kauffman. "Gurbaksh and his team have created the ability to turn user data from billions of ad serving interactions into higher ROI for advertisers and higher inventory value for publishers. I look forward to helping the company fully capitalize on this opportunity."

Rusty Rueff on MarketWatch

2006-09-07T10:59:00.000-07:00

Check out Bambi Francisco's interview of SNOCAP CEO Rusty Rueff on MarketWatch.

MySNOCAP

2006-09-05T07:09:00.000-07:00

Today, MySpace and SNOCAP formally announced a major digital music partnership. This past weekend, The Wall Street Journal, The New York Times, and many other publications ran stories about a possible deal.

It's a big announcement for both companies.

"Up until now bands faced the challenges of content availability, technology and distribution," said Tom Anderson, president of MySpace. "This music service enables artists and labels to oversee their own commercial and distribution platforms while lowering the barriers for all bands to sell music directly to their fans in a way that's easy and totally legal."

"SNOCAP's partnership with MySpace empowers the music community in a profound way by allowing artists to establish a direct commercial and social relationships with their fans," said Rusty Rueff, chief executive officer of SNOCAP. "Now, every artist can distribute their music instantly and directly to their fans, making them relevant whether they sell one hundred tracks, ten thousand tracks or ten million tracks."