Thursday, December 30, 2010

The Latest from TechCrunch

The Latest from TechCrunch

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Dear Manufacturers: You’ve Had A Rough Year, But Step It Up

Posted: 30 Dec 2010 09:19 AM PST


It seems, at least at first blush, that we are out of the slimy gullet and into the potentially less dangerous teeth of this recession. Joblessness is still high but folks I know who are working in IT and CS are in high demand. People are hiring, but not out in the open, and shoppers, as evidenced by this year’s holiday season, have a little bit of cash. But CE manufacturers, back in 2008, pulled into their turtle shells and haven’t come out. The past few years have passed in a slothful haze and I’m worried that 2011 will be another year of negative innovation.

Consider what happened this year: we saw a load of Android phones, we saw an iPad and a new iPhone, and saw some tablets. That’s it. 3D TV was a flop, most other product lines saw little or no improvement, and generally CE industry sat this year out. CES, if all portents can be believed, will be a bust as well.

People ask me every year what my favorite gadget is. That’s almost impossible to answer. Sadly, for me, it’s like asking a proctologist about his favorite patient: they all sort of blend together and none of the experiences are very nice. So what is my favorite gadget? The gadget that truly stood out?

It’s the freaking Parrot AR.Drone. That’s right. A toy. Here’s why, and here’s what manufacturers can take away from this toy.

It was completely out of left field – I wrote Parrot off a few years ago as a second-tier Bluetooth manufacturer. They were best known for motorocycle helmet compatible Bluetooth headsets. Then, suddenly, they produce something so wild and compelling that it becomes a must-see. They blew up the news cycle by literally becoming a different company to many people. Now this doesn’t always work. Monster Cable tried to do it with their audio gear and while some of it is impressive they really haven’t shaken the old “Monster is too expensive for what it is” stink. Hopefully this is the year people stop thinking of the cable and more about the speakers and headphones.

It took multiple existing technologies and mixed them in an amazing way – Search online for mini-helicopter. There are hundreds, if not thousands, of weird Chinese models available. All of them are garbage. You fly one into a lamp or tree and it’s toast. But dammit if I haven’t been eying those helicopters for years. Then the AR.Drone came along. It mixes the mini-helicopter craze with Wi-Fi and with a totally unique and intuitive control scheme that anyone can use. No more pitch and yaw – you just move your iPhone, iPod Touch, or iPad around. No difficult set-up – you just connect to a Wi-Fi access point that is built right into the drone. You could say Apple does this all the time but in fact all manufacturers do this all the time. They take a board, a chip, and some memory, and slap it into a familiar permutation. There’s no magic to it. The magic is in creating a permutation that people actually care about.

It put the future in our hands – Check out that video, above. It’s a quadracopter flying through hoops. For most of the summer we were amazed by those things. Suddenly – BOOM – there one is, available to purchase for a few hundred bucks. It’s as if suddenly Parrot brought something out of the research labs into our homes. That’s important. CE manufacturers sit on ideas for years. They’re afraid to inject new stuff into the pipeline. Heck, Olympus is probably announcing, at best, a cosmetic change to their amazing E-PL1 camera when the E-PL2 arrives next week.

It wasn’t designed by committee – The wisdom of crowds is fine when you’re betting on horses but horrible when betting on gadgets. The HP Slate, for example, looks like it was designed at a series of four one-hour meetings by a team that ate too much all-you-can-eat pizza at lunch. Even if a team built the AR.Drone, it seems more like a device made by a mad genius in a basement somewhere than a toy that aims to tick off boxes on a spreadsheet.

Let’s get out there, manufacturers, and win one for the Gipper. Sure, times are tough and you have little grasp on what real humans want, and sometimes we don’t know what we want ourselves. But for years I’ve had at least a few items – besides the obvious gorillas of this year – to bring up in conversation. This year it’s a freaking flying kids toy. Let’s fix this, people.



NookColor is Barnes & Noble’s Top Seller This Holiday

Posted: 30 Dec 2010 09:00 AM PST

In a few short weeks, the NookColor sold “nearly a million units,” at least according to B&N, making it the company’s best-selling product. Launched in October, the NookColor is a hackable Android tablet originally designed to only read B&N’s line of ebooks and play a few games. Since its launch, however, it’s become a hacker’s plaything and a popular alternative to the do-it-all iPad.

In short, the NookColor could be B&N’s ultimate weapon against Kindle hedgemony and has definitely put them firmly in the ereader race. Full PR after the jump.

Read more…



Groupon Insiders Take $345 Million Off The Table In Latest Funding Round

Posted: 30 Dec 2010 07:58 AM PST

As we first reported last night, Groupon has already closed $500 million of a whopping $950 million funding round. Now the SEC filing is out showing that the first sale occurred on December 17, and that there is still $450 million worth of securities available to be sold in the current round. The new round gives Groupon a valuation of $4.75 billion.

We noted that most of the proceeds of the round is going back to founders and existing shareholders, with DST leading the round (Fidelity and Morgan Stanley also participated). Now we know exactly how much. The filing specifies that $345 million of the proceeds (from the $500 million raised) will go directly to “executive officers, directors or promoters.”

It also notes that a “portion of the gross proceeds will be used to pay for shares repurchased by the Issuer in a tender offer for shares held by, among others, certain of the persons named” in the filing. What that means is that Groupon itself will use some of the money it is raising to buy back shares from the founders or other shareholders. The persons named are founders Andrew Mason, Eric Lefkofsky, and Brad Keywell, as well as the other board members (John Walter, Jason Fried, Ted Leonsis, Peter Barris, Harry Weller, and Kevin Efrusy). Somebody also pocketed a $7.5 million “finder’s fee” for helping to put the deal together.

This round is largely a liquidity event for existing shareholders since most of the capital raised won’t be plowed back into the business. However, Groupon is producing so much cash on its own (with annualized revenues rumored to be between $1 billion and $2 billion) that the business can fund expansion from its own cash flows.



Pew Shows 65% Of People Pay For Digital Content; Mostly Music, Software, And Mobile Apps

Posted: 30 Dec 2010 07:28 AM PST

The Pew Internet organization put out results of a survey on how many people pay for digital content online. The study found that 65 percent of people online have paid to download some form of digital content or for a subscription to a digital media service. The survey excluded physical goods bought online and was focussed only on digital content such as music, software, news, and other online or electronic publications.

For those who do spend money online on digital media, most spend between $1 and $10 a month, with 68 percent spending less than $30 a month. (You can see the distribution of amount spend in the chart above). The two kinds of digital goods people are most willing to pay for by far are music and software. One third of respondents (33 percent) say they have paid for either digital music or software online. And 21 percent have paid for mobile apps. So if you combine mobile apps and other forms of software, that is the largest single category even accounting for overlap in the numbers. Paying for digital games comes in fourth at 19 percent.

What about digital newspapers or magazines behind paywalls or for sale for tablets like the iPad? A respectable 18 percent of respondents say they have paid for news or other reports online. That even beats out the 16 percent who have paid for movies or TV shows. Media companies will love that stat. And ebooks? Only 10 percent have bothered to pay for those.

Here is the full breakdown:

  • 33% of internet users have paid for digital music online
  • 33% have paid for software
  • 21% have paid for apps for their cell phones or tablet computers
  • 19% have paid for digital games
  • 18% have paid for digital newspaper, magazine, or journal articles or reports
  • 16% have paid for videos, movies, or TV shows
  • 15% have paid for ringtones
  • 12% have paid for digital photos
  • 11% have paid for members-only premium content from a website that has other free material on it
  • 10% have paid for e-books
  • 7% have paid for podcasts
  • 5% have paid for tools or materials to use in video or computer games
  • 5% have paid for "cheats or codes" to help them in video games
  • 5% have paid to access particular websites such as online dating sites or services
  • 2% have paid for adult content


WPP Buys Obama’s Campaign Agency Blue State Digital

Posted: 30 Dec 2010 05:55 AM PST

Blue State Digital, the communications firm responsible for coordinating President Barack Obama’s online fundraising and social networking campaigns in the 2008 election, has been acquired by advertising giant WPP. Terms of the deal were not disclosed.

Blue State Digital is a digital agency that helps form online strategy, and advocacy, membership and fundraising campaigns for nonprofits, educational and cultural institutions, political campaigns and corporate brands. According to a release, Blue State Digital’s revenue has grown more than 30% per year since its founding in 2004 (and the company’s strategy and technology has helped raise $800 million to date).

Blue State Digital’s clients include HBO, The American Red Cross, Harvard University and AT&T. One factor that made BSD appealing to WPP is its proprietary technology suite that integrates tools for online fundraising, advocacy, social networking, constituency development, email marketing and content management. The company also consults on web design and strategic communications.



How Are M&M’s Made? – And Other Weird Interview Questions From 2010

Posted: 30 Dec 2010 05:45 AM PST

Glassdoor.com, a venture-backed online career and workplace community, has self-reportedly culled through tens of thousands interview questions that job seekers have shared on the site in 2010, and selected a number of weird ones.

Some of them are pretty bizarre, some are downright hilarious.

Go to the Glassdoor blog for the top 25 oddball interview questions, but below are the ones from technology companies, since I reckon you’d be most interested in those.

Don’t forget to list some grueling interview questions you’ve had to answer in your career in the comment section!

"How many basketballs can you fit in this room?" – asked at Google.

"If you could be any superhero, who would it be?" – asked at AT&T.

"Given the numbers 1 to 1000, what is the minimum numbers guesses needed to find a specific number if you are given the hint "higher" or "lower" for each guess you make?" – asked at Facebook.

"If you had 5,623 participants in a tournament, how many games would need to be played to determine the winner?" – asked at Amazon.

"There are three boxes, one contains only apples, one contains only oranges, and one contains both apples and oranges. The boxes have been incorrectly labeled such that no label identifies the actual contents of the box it labels. Opening just one box, and without looking in the box, you take out one piece of fruit. By looking at the fruit, how can you immediately label all of the boxes correctly?" – asked at Apple.

"How do you weigh an elephant without using a weigh machine?" – asked at IBM.

"You have 8 pennies, 7 weight the same, one weighs less. You also have a judges scale. Find the one that weighs less in less than 3 steps." – asked at Intel.

"How many bottles of beer are drank in the city over the week?" – asked at The Nielsen Company.

Pro tip, you can view the answers given by job seekers for the listed interview questions as well. Some of them are quite amusing as well.

Also check out Glassdoor's List of Naughty and Nice CEOs (TCTV).

Alright, Monthy Python time (thanks, commenter):



Three Words: Simple, Fun, Viral

Posted: 30 Dec 2010 04:35 AM PST

Making the rounds on Twitter, Facebook and Tumblr right now is Three Words, a super simple but mighty fun application created by teen tinkerer Mark Bao. What does it do?

Well, it tells you who you are in three words, at least according to the people that visit that Web page, that is.

When you first go to the site, you can sign up through Facebook Connect, and you’ll get a link that looks like this: http://threewords.me/robinwauters. On that page, people can describe you in – you guessed it – three words, and you can even customize your page with a personal background and avatar if you’re into that.

On Hacker News, meanwhile, Bao explains how he built the app, and asked the community what he should do now. Evidently, Bao also took to Quora, where he explained how the simple Web app went from a simple link on Facebook to a viral machine.

He says the biggest growth so far has come from Twitter and Tumblr, and also from Facebook, and that he’s built the app specifically to spread virally by incorporating a low enough barrier to entry as well as a mechanism to entice people who describe other people to make a Three Words page for themselves too.

And of course, everyone knows people love to know what other people think of them (you can do so anonymously on Three Words, by the way, so go wild on my profile if you wish).

Funnily enough, he could easily make the service even more viral, in my opinion, by simply adding some buttons so people can easily spread their custom profile link to various social networking services once they’ve signed up.

Lets hope the site stays in the air long enough for you to try it out – there are definitely some scaling issues that need to be resolved.



Welcome To The Hostel Microsoft. Such A Lovely Place.

Posted: 29 Dec 2010 11:58 PM PST

It was almost exactly a year ago that we wrote about the Googlle Institute of Software Studies, a cleverly-named online university based out of India. After our post on the institution offering students such degrees as a “GCPA” — Googlle Certified Professional in Advanced Computing — it didn’t take long for the website of the school to be shut down. But the person who originally tipped us off to those shenanigans is now back with another fun one. And apparently, it’s based out of the same city in India.

Say hello to the “Hostel Microsoft”.

Near a place known as “Badarad Britcolony”, Hostel Microsoft apparently offers separate blocks and campuses for ladies and gents. It’s apparently a hostel with some 50 beds in it. It also has some residence blocks, whatever that means. And it’s opening in the beginning of January.

While it doesn’t appear from the sign that they’re offering any type of bogus degree like the Googlle Institute, they are more directly ripping off the name of a worldwide technology company. (We’re assuming, of course, that Microsoft isn’t actually opening a hostel in India.)

That sign coming down in 5, 4, 3,….

[thanks Deb]



Skype’s New App Brings Video Chat To The iPhone, iPad And iPod Touch

Posted: 29 Dec 2010 10:35 PM PST

We’ve been hearing reports that Skype is debuting a mobile video chat service and D-Day has arrived. The company is launching a brand new version of its iPhone app that includes the ability to turn on video in any Skype chat.

The beauty of the app is that it brings free video calling to iPhone 3G devices, iPad and iPod Touch, all of which couldn’t run Apple’s video calling feature Facetime (the feature only works with iPhone 4 devices and Mac computers). Of course, iPad owners won’t be able to initiate a video call, but these users can receive any video chats from contacts.

Skype also says that the app allows users to video chat over both 3G and WiFi networks, allowing users to access the feature across a variety of connections. Skype’s iPhone app, which was one of the top five free iPhone apps in 2010, allows users to simply turn on the video feature to activate video chat. iPhone 4 users have the ability to use either the front facing camera or the back camera.

The new version of the iPhone app is compatible with the iPhone 4, iPhone 3GS, and 4th generation iPod touch with i0S 4.0 or above. Users can receive video chat on the 3rd generation iPod touch and iPad. Calls can also be made between devices using the new Skype for iPhone app and desktops including Skype for Windows, Skype for Mac, Skype for Linux and ASUS Videophone.

Rick Osterloh, VP of Consumer Products for Skype, tells us that the company has been working for awhile to develop video capability in the app. With video calling representing 40 percent of all Skype calls, Osterloh says that adding the functionality made sense to expand Skype’s use. “Mobile is going to be big for Skype,” says Osterloh. “We are making sure Skype is with you wherever you are and mobile will be the place where that happens as smartphones get more powerful.”

Osterloh adds that we can expect more mobile offerings in the near future, which seems to imply that video calling could be coming to its Android app as well. And while this new app does seem to compete with Apple’s Facetime, Osterloh is quick to add that Apple has been a “great partner” in the development of the new build of iPhone app (probably because Apple actually approved the app).

This has been a tumultuous few weeks for Skype, which suffered a massive outage last week affecting tens of millions os users. Today, the company’s CIO Lars Rabbe revealed the causes behind the outage, which included a bug in the Skype for Windows client. And earlier this week, the company was hit with a patent infringement suit. Skype says that the release of the app was purposely made just prior to New Year’s, which is historically Skype’s biggest video calling day of the year (measured in calling minutes).

2011 should be a big year for Skype, as the company prepares for an IPO in the next year. With this event looming ahead, Skype has been working to expand usage of its service through enterprise offerings and new product development (i.e. Facebook integration). And we know Skype is going to make a big push to the cloud in 2011, possibly launching a web-based service early in the year.

Besides for general consumer use, video calling could come in useful for Skype’s enterprise clients. The new feature definitely makes the technology a more compelling solution for conferencing purposes.

And Osterloh made it pretty clear that mobile will also be a part of the company’s strategy to expand its userbase (Skype has an average 25 million consumers using the service at any given time). It should be interesting to see what Skype has up its sleeve in the New Year.



What The “Great Delicious Exodus” Looked Like For Pin-Sized Competitor Pinboard

Posted: 29 Dec 2010 10:25 PM PST

When word got out two weeks ago that Yahoo is not 100% committed to Delicious, people who still use the bookmarking service started to panic and look for alternatives. One competing bookmarking site that some people turned to is Pinboard, a barebones bookmarking site which looks a lot like Delicious did in its early years: lean, no-frills, and very useful. The company saw an influx of traffic and activity. The chart above shows requests per minute to its servers in the three days following the Delicious news compared to the week before.

A couple hour ago, Pinboard Tweeted out a link to the chart:

Pinboard@PinboardIN
Pinboard
This is what the Great Delicious Exodus looked like to our servers: http://bit.ly/frLwmA (contrasted with normal traffic a week earlier)

about 13 hours ago via TweetDeckRetweetReply

The service wasn’t handling a huge number of requests to begin with—a few hundred per minute at peak—but that number increased about tenfold to over 2,500 requests per minute. Pinboard allows you to import your bookmarks out of Delicious. Mike suggested switching from Delicious more than a year ago. But from what I can tell it only has about 9,000 users. You are asked to pay a one-time fee to sign up, which helps to prevent spammers from joining. The current fee is $9.07 and it is based on the number of users. So not a whole lot of Delicious users switched to Pinboard, but it was enough to move the needle for the small bookmarking site.

The longer Delicious remains in purgatory, the more users are going to look for alternatives like Pinboard. The site even provides an honest list of pros and cons for those considering the switch.



Actually, Groupon Already Closed Half Of That Billion Dollar Round

Posted: 29 Dec 2010 07:59 PM PST

Yesterday we reported that fast growing ecommerce startup Groupon was in the process of raising nearly $1 billion in new venture capital at a $4.75 billion valuation. “The deal should be closed in a few weeks,” we heard from a source.

And in fact the deal hasn’t closed yet – at least, not all of it. But the company has raised a healthy half billion dollars in new venture money at that valuation in the last couple of weeks. Documents signed, checks cashed, the whole nine yards. Now they’re talking to other investors about filling out the round.

So who invested? Digital Sky Technologies, the lead in the last round, took a big chunk of the round, we’ve heard from multiple sources. And new investors Fidelity and Morgan Stanley have jumped in as well.

As we suspected, the large majority of the money already raised is being used to cash out founders and execs, say new sources. More as this develops.

We’ve reached out to DST and Groupon for comment. No response yet from DST. Groupon declined to comment.



This Year, Apple Has Two Fangs To Suck The Blood Out Of CES: iPad 2 And Verizon iPhone

Posted: 29 Dec 2010 07:10 PM PST

Every year, it seems the buzz starts building around now for CES, the giant consumer electronics expo in Las Vegas. And every year at CES, much of the buzz seems to be around the one company that isn’t there — perhaps the most important consumer electronics company these days: Apple.

And this year will be no different. Except that this year, the CES buzz-kill may be more intensified as there are not one, but two key Apple products expected to be announced shortly after the expo: the iPad 2 and the Verizon iPhone.

With just about a week to go until CES, the Apple rumor mill is beginning to ignite. Today alone, we have stories of Apple winding down iPad 1 production to get ready to ramp up for iPad 2. And then there’s this BusinessWeek article (once again) announcing the impending launch of an iPhone that will work on Verizon’s network for the first time.

More specifically, here’s how AppleInsider phrases the iPad production story:

According to a new report by analyst Ming-Chi Kuo of Concord Equity Research, Apple has shifted iPad production from an estimated 2.1 million units in November to just 1.6 million in December in order to prepare for the launch of revised new tablet, expected to be announced in January.

And here’s what BusinessWeek has to say about the Verizon iPhone:

Very soon, maybe by Valentine’s Day, Apple will likely host one of its splashy product introductions to announce a new version of the iPhone that works on Verizon’s network.

In other words, if these reports are to be believed, Apple will likely be holding either one (massive) event in January to unveil both products. Or they’ll have two separate events in January for each different product. Neither event, obviously, would be CES.

And so the buzz surrounding all the tablets and mobile devices that will be shown at CES will likely once again be overshadowed by the lingering promise of new products by Apple. It used to be that Apple screwed CES by announcing such products a few weeks later at Macworld. But now they go it alone, overshadowing the conference dedicated to them as well.

The only real question is if Apple would actually unveil both the Verizon iPhone and the iPad 2 at the same event — or even in the same month?

Both are tent pole-worthy announcements in their own right. The iPad 2 is bigger news than the Verizon iPhone, which is expected to simply be a current-generation iPhone 4 with CDMA-insides. But there are millions of people waiting for a Verizon iPhone, and Apple would undoubtedly want to use a stage to announce that the device is finally available on the biggest network in the United States. And most accounts have such an announcement taking place in January.

The iPad 2 announcement would likely be a bigger one because it would also be a state of the union for Apple’s newest billion-dollar revenue stream, and supposed future of computing, and the future of iOS, etc. Apple announced the first iPad at an event last January, but didn’t actually release it until April. So while some, like AppleInsider, are betting on a January unveiling, Apple could conceivably wait until the Spring to show off iPad 2, closer to when it’s ready to ship.

Of course, the talk of iPad 2 production already ramping up may suggest that they would release the device sooner. And spacing it 6 months apart from the traditional iPhone unveiling date does make some sense.

And the other hot rumor is that the iPad 2 will come in three flavors: WiFi, GSM, and CDMA. That latter, obviously, would be an iPad that is Verizon-compatible. Apple could conceivably tie the two announcements together that way. I can see it now: “oh, and one more thing, the iPad isn’t the only device coming to Verizon…”

But what about that other Apple event that was supposed to take place in early 2011? You know, the one to show off the new News Corp.-created iPad newspaper? Does that also fit into a iPad 2 unveiling? And what about rumored MacBook Pro and iMac upgrades? Oh, and what about the Mac App Store, which is set to launch on January 6? Funny timing, that’s the first day of CES.

[photo: flickr/outcast104]



Yext Organizes The Anti-Google Local Advertising Alliance (Screenshots)

Posted: 29 Dec 2010 06:49 PM PST

Google, as you may have heard, is making a big push into local advertising. It is currently offering $100 million in AdWords credits to new small businesses that sign up and promotes Google Places results for all local searches. Quite frankly, this is scaring the shit out of competitors like Citysearch, Yellowbook, SuperPages, WhitePages, and Yelp. They all rely on Google search results for people to find a good portion of their listings, and if Google displaces them collectively for local business listings, their businesses will be destroyed.

In local, Google is already a big snowball getting bigger and bigger. So how do they fight back? They enter into an anti-Google alliance, of course. The company organizing this alliance is Yext, a New York City startup which specializes in pay-per-call advertising for local businesses and dashboards to help them manage their reputations and listings online. On Monday, it will launch a new feature called “Tags” which will let small businesses highlight their names with a little tag and customizable message across about a dozen local listings sites. Launch partners for this “Tag Alliance” (I like my name better) will include MapQuest, Citysearch, Yellowbook, Local.com, SuperPages, White Pages, MerchantCircle, and Topix, with more to come.

If these tags sound familiar, it is because Google also offers similar sponsored tags to small businesses for $25 a month. Whenever a local business advertising with tags comes up in an organic search result or on Google Maps, a yellow tag with a line of text appears beneath its listing to help it stand out. Now, Yext is offering basically the same product across all the other major local search and listings sites on the Web for $99 a month per business location. Yext will end up splitting that 50/50 with its partners where the tags will appear. But from one dashboard (see first screenshot below), small businesses will be able to create tags, activate them across all the partner sites, and change them or take them down at will. And this is just the first step.

Since launching its reputation management system, Yext Rep, last May at TechCrunch Disrupt New York, the company has signed up 30,000 local businesses for the free product with no marketing. Tags will become a new tab/feature on Yext. Eventually, businesses should be able to update their tags not just on Yext but from any of the partner sites, and with one stroke update all of their tags universally across all the partner sites. And while it is starting with tags, Yext hopes to convince its partners to share more data and allow businesses to change their listing information or upload new photos in one place and see the changes replicated everywhere else.

Below is the Yext Tags dashboard page and a couple examples of what the tags look like on SuperPages and MapQuest:



Thanks In Part To The Northeast Blizzard, Online Holiday Spending Surges To Record $30.8 Billion

Posted: 29 Dec 2010 06:38 PM PST


Online holiday spending continues to set records. comScore is reporting that retail e-commerce spending in the U.S. for the first 56 days of the November to December 2010 holiday season has reached a record $30.81 billion, which is an 13 percent increase versus the same period last year. The past week before Christmas saw $2.45 billion in spending, an increase of 17 percent versus the corresponding week last year. As expected, comScore reports that the massive snow storm that hit the Northeast region of the U.S. over the weekend helped push post-Christmas spending to record levels.

The company also reports that in terms of specific products, Computer Hardware ranked as the top growing category for the holiday season with a 23 percent increase versus last year. Interestingly, handheld devices (such as iPads and e-readers) and laptop computers have driven much of the growth in this sector.

Other areas showed healthy growth as well. Books & Magazines ranked second with 22 percent growth, followed by Consumer Electronics (up 21 percent), Computer Software excluding PC Games (up 20 percent) and Toys (up 16 percent). Other categories in the top ten included Jewelry & Watches (up 11 percent) and Apparel & Accessories (up 8 percent).

Record e-commerce spending this holiday season has been written in the cards for some time now. Over the past few weeks, online retailers have seen fairly strong results, with total sales up 12 percent to over $28 billion so far.

And there’s still more spending to do, as many retailers are advertising New Years sales as well. Total sales for the full holiday season (through New Years) are expected to reach $32.4 billion this year, up 11 percent. I wouldn’t be surprised if consumers surpass this number.



Drag2Up Lets You Drag Images Into Text-Only Forms

Posted: 29 Dec 2010 06:19 PM PST

Drag2Up is Google Chrome and Firefox extension that allows you drag and drop image and other files into any website input box. The extension streamlines the file uploading process by uploading your file in the background and then adding a URL link to the input box of your choice. This saves a boatload of time says the extension’s creator, a 15-year-old developer who goes by the name Antimatter15:

“Instead of the trouble of opening a new tab, navigating to your favorite file provider, waiting for it to load, pressing the browse button, navigating to the folder with your image, pressing "Open", then hitting the submit button, waiting for the upload to finish, copy the link, find the original tab among the mess of tabs that fills your tab bar and finally scrolling down, selecting the box and pasting the URL. All to share a three megabyte file. drag2up streamlines the process into a single, swift gesture where you drag the file onto the text entry field.”

Drag2Up also supports multiple files and has support for a multitude of URL shorteners. Depending on the type of file and whether you’re using Chrome or Firefox, files can be uploaded to hosting services Dropbox, Cloudapp, imgur, Imm.io, Imageshack, Flickr, Picasa, Github Gist, Pastebin.com, Mysticpaste, Chemical servers, Dafk and Hotfile.

You can find the extension in the Chrome Web Store or as a Firefox Addon here.



TextualAds Raises $650K For Facebook-Fueled, Targeted SMS Campaigns

Posted: 29 Dec 2010 03:43 PM PST

Facebook holds a trove of information about its hundreds of millions of users, and many of them are more than happy to hand over some of that data — like a list of their personal interests — so that they can connect with their favorite companies or play a new game.  Thing is, despite the targeting opportunities afforded by this data, many businesses have still failed to take advantage of it. TextualAds is a firm that’s changing that for text messaging campaigns, by allowing businesses and large brands to push highly targeted SMS messages to their customers.

The service launched in September, and today it’s announcing that it’s closed a $650K seed round. The round’s investors include Dave McClure (500 Startups), Peter Boboff & Chris Redlitz (Transmedia Capital), Marcus Segal (Zynga), Shawn Simpson (former Googler), and Erik Moore.

TextualAds currently offers a signup application that SMBs can install on their Facebook Pages, prompting users to enter their zip code, age, gender, and telephone number. Once businesses have collected this data, they can use the TextualAds platform to target text message campaigns at specific buckets of users (say, women over the age of 30). Text messages are obviously a very powerful channel for businesses and advertisers, and the ability to target them makes them even more appealing. So far TextualAds has 1,200 businesses using it, but there’s much more to come.

In the next month, TextualAds will be launching the 2.0 release of its product, and it’s got several major household brands lined up as clients. The new version of the TextualAds application will feature a one-click signup — the service will better make use of Facebook’s platform and collect the user’s gender, age, and other content from their Facebook profile as opposed to making them enter it manually.

In addition to the streamlined form, TextualAds will be giving clients access to a sophisticated analytics dashboard, which will include data on users’ Facebook Likes, wall posts, and other content that many companies haven’t taken advantage of yet. The service will charge based on the amount of customization companies need, and large clients are paying six figures a year for whitelabeled versions of the product.

There are obviously other solutions for targeted text messages (we’ve covered Adenyo before) but TextualAds founder Craig Davis says that he hasn’t seen any other services tap into Facebook’s wealth of data.



Hitwise: Facebook Overtakes Google To Become Most Visited Website In 2010

Posted: 29 Dec 2010 03:05 PM PST

According to Hitwise data released today, Facebook.com was the top visited website in the US in 2010, taking up 8.93% of site visits between January and November 2010. Google.com came in second at 7.19%, Yahoo Mail is third with 3.52% and Yahoo.com is fourth at 3.30%. YouTube came in fifth at 2.65 %.

While Hitwise came to the same conclusion back in March, this is the first time Facebook has been named most visited site of the year (crowding out last year’s winner Google). Comscore also shows Facebook.com passing Google.com in visits in November but all Google sites as still having more. According to Hitwise, visits to Google properties combined cover 9.85% of all site visits, making Google a formidable opponent.

“Facebook” also ranked #1 for most searched term of the year directly in front of the hilarious “Facebook login” at #2.

You can read the full results here.



Google Targets Small Businesses With $100 Million Worth Of AdWords Credits

Posted: 29 Dec 2010 03:01 PM PST

Google is going after local businesses in a big way. It is promoting Google Places any time someone does a local search, it tried to buy Groupon for $6 billion, and it put star exec Marissa Mayer in charge of local products. Since the middle of December, it’s been running a $100 million marketing promotion aimed at small and medium-sized businesses to try to get them to sign up for AdWords.

Small businesses that sign up by December 31 have until mid-February to spend $100 on AdWords, after which they will be given another $100 credit. The promotion is good for “the first one million businesses only.” If one million businesses sign up and spend that $100 the total value of the campaign will be $100 million. Of course, the campaign won’t really cost Google anything. It is spending $100 to acquire these small local business as new customers. It has offered similar promotions in the past. But Google’s efforts go beyond offering these credits.

In fact, Google wants to make it so easy for small businesses to get on board, that it even offers a phone number to call up and a representative will help them set up their first campaign. This is a very different approach than the automated self-serve model Google was built on, but that is because local businesses need more hand-holding when it comes to online marketing. As Greg Sterling pointed out when the campaign kicked off in mid-December:

What we're seeing at Google is a significant commitment to the local market and a related internal cultural shift.

Google needs to find its next leg of growth and local (which is intimately tied with mobile) is where it is putting a lot of its fire power.



Lookout Identifies Advanced Android Trojan (But You’re Probably Safe)

Posted: 29 Dec 2010 02:06 PM PST

The future of computing is mobile, and, unfortunately, the future of malware will probably lie there too. Well-funded mobile security startup Lookout has just posted a blog entry detailing what it calls “the most sophisticated Android malware to date”: a Trojan that’s being “grafted” onto legitimate applications. Fortunately, the odds of you being affected are quite low.

The Trojan in question has only been seen on third-party Android app marketplaces in China, which aren’t accessible without turning on “Unknown Sources” from Android’s settings menu (the vast majority of users only download applications via the official Android Market). And the infected applications request access to far more of the user’s data than they normally would (users have to approve these requests before installing an app), which can tip users off that something is amiss.

But, if you’re unlucky enough to have cleared those hurdles, here are some of the details on what Lookout believes the Trojan is capable of:

Though we have seen Geinimi communicate with a live server and transmit device data, we have yet to observe a fully operational control server sending commands back to the Trojan. Our analysis of Geinimi's code is ongoing but we have evidence of the following capabilities:

Send location coordinates (fine location)
Send device identifiers (IMEI and IMSI)
Download and prompt the user to install an app
Prompt the user to uninstall an app
Enumerate and send a list of installed apps to the server

Lookout writes that this is more sophisticated than previously discovered malware because it attempts to hide what it’s doing through encryption and bytecode obfuscation. It also says that this is the first Android malware that could potentially be used to create a botnet, though it hasn’t seen any instances of a server actually communicating with the Trojan yet:

Geinimi is also the first Android malware in the wild that displays botnet-like capabilities. Once the malware is installed on a user's phone, it has the potential to receive commands from a remote server that allow the owner of that server to control the phone.

One other thing to note: Lookout is in the business of mobile phone security — it offers applications for Android, BlackBerry, and Windows mobile — so it obviously stands to benefit from exposing these exploits.



Delicious In Purgatory

Posted: 29 Dec 2010 01:45 PM PST

On December 16 Yahoo accidentally told the world they were shutting down popular bookmarking site Delicious. They fired most or all of the Delicious staff. Then they untold that story, saying they intended to sell it off and that the press got it all wrong.

Ok great. So how’s that sale process going?

Not so well, according to a handful of interested buyers I’ve spoken with. I know of five companies and venture firms that have reached out to Yahoo to talk about buying Delicious. Three of them have confirmed to me that Yahoo either hasn’t responded, or hasn’t responded with any serious level of engagement. According to one source, Yahoo has told people that they are planning on starting a sale process in mid-January.

One venture firm we’ve confirmed has expressed interest in Delicious is Spark Capital, although they haven’t responded to my request for comment.

Part of the problem may be price. Yahoo turned down a $15 million offer for Delicious in 2009, we’ve heard. And they may be looking for that much or more now. Most of the buyers I’ve spoken recently with say their interested in the sub-$5 million range.

That makes it a big who-cares for Yahoo. I imagine they are trying to focus on much bigger acquisitions, sales, strategies and cost cutting maneuvers that actually move the needle for them financially.

Another problem is how to pull Delicious out of the Yahoo infrastructure. Former Delicious product manager Stephen Hood wrote earlier this month:

Selling Delicious to a third-party

This certainly seems like the best option for Delicious and its users, and I hope that Yahoo is able to pull it off. But it's not a straightforward proposition. As mentioned above, most of the team is now gone. Last week's leak (and the subsequent fallout) also did unfortunate damage to the Delicious brand, sending panicked users to competing products.

But ultimately the real challenge here will be the technology. During my time at Delicious we rebuilt the entire infrastructure to deeply leverage a number of internal Yahoo technologies. It's all great stuff but not exactly easy to remove or replace. Yahoo may have to license some of this technology to the buyer. I'm not sure they've done that before.

In the end it may be easier for a buyer to simply rebuild Delicious from the ground up, and then import all the data, say people with knowledge of the Delicious back end.

There’s one person out there who certainly wants to see Delicious live on – founder Joshua Schachter. I’ve asked him if he’s interested in taking Delicious private in a deal similar to how StumbleUpon was spun out of eBay and returned to it’s orignal founders.

Schachter says he’s busy working on his new startup and won’t be running Delicious again any time soon. But he does say he’s willing to help keep Delicious alive. He tells me “I’m watching this develop and am hoping Delicious ends up in a good place. I’m willing to spend time to help make that happen.”

Eventually Delicious will almost certainly be spun off from Yahoo. Not because Yahoo seems to particularly care what happens to the service, but because it’s just good PR for them to do this the right way. As a Delicious user, that’s good enough for me.



Next New Networks Raises $1 Million Amid YouTube Acquisition Rumors

Posted: 29 Dec 2010 01:12 PM PST

While Google’s YouTube is reportedly in talks to buy Web content producer Next New Networks, the New York-based startup has just raised $1 million in debt financing. According to this SEC filing, the fledgling company is raising a round totaling $1.2 million.

Listed as investors are Ross Levinsohn from Fuse Capital, Bijan Sabet from Spark Capital, Goldman Sachs and Saban Capital Group.

The potential acquisition of NNN, which also manages a network of independent filmmakers alongside producing its own channels, would give YouTube its first step into producing Web videos in-house.

This would be not only a shot in the arm for the video sharing site proper – upping its ability to squeeze more advertising dollars out of the popular service – but also for Google TV.

As for now, those are just rumors. The funding round, though, is fact.



Back off SEC: Let’s Put the “Risk” of Secondary Markets in Perspective

Posted: 29 Dec 2010 12:00 PM PST

Back in early 2009, I was concerned about the development of private stock secondary market exchanges. I was concerned that it would affect retention of top executives if people were able to cash out before an IPO too easily. I worried companies wouldn’t be careful enough about who they would allow to own chunks of them. I thought it would be just a band-aid for a larger industry problem of companies not wanting to go public early and often. And in the wake of the financial meltdown, I was concerned about people getting burned who were buying the shares on a loosely regulated market.

We’ve seen shades of all of these, but mostly my fears were allayed once we saw these markets in practice.

Why? Because it was clear these aren’t shadow public markets. They simply made secondary trading that already existed more efficient. Securities laws restrict the trading to wealthy individuals and accredited investors, and the companies have placed even more restrictions on trades, whether it’s not approving certain trades (they have the right of first refusal on transactions) or restricting the trading to very early employees or restricting trades to only former employees. It could have devolved into a late 1990s-like frenzy of buying and selling unregulated shares, as under-pressure VCs seek to lock in returns and employees strive to exit without the IPO wait. But, so far, it hasn’t.

Listen up, because you don’t hear me say this a lot: I underestimated the Valley ecosystem and if the SEC’s inquiries are part of a larger push to regulate these markets, they are too. The companies tapping these secondary markets clearly had the same fears and rather than going for the short term dollars, they have been pretty judicious in how they are using this new tool.

So what about those people with more than one million dollars in liquid assets who are allowed to buy shares? Don’t the rich people deserve disclosure too? At the cost of a company’s right to stay private, I don’t think so. If you want a piece of Facebook, but don’t have the connections to invest as an angel or VC, the skill to get hired there and get employee shares or the patience to wait until it goes public, well, there’s a catch as with anything else in life. You have to do it on the company’s terms. Those terms frequently require you get approved as a buyer first, and do not require the company to give you public-company-like details of its business. If you don’t like those terms, well then, wait for the company to go public.

Let’s put what’s going on in secondary markets in perspective:

  • The largest exchange, SecondMarket, is doing about $400 million in trades a year. That’s a lot. But not compared to how much venture capital is invested in private companies annually, between $15 billion and $20 billion. And it’s nothing compared to how many hundreds of billions of dollars worth of paper value is tied up in illiquid private company stocks. There’s a cap on how much these markets can grow because of all the restrictions on buying and selling. It could one day get out of control, but it’s nowhere close now.
  • Secondary exchanges aren’t the same thing as the Pink Sheets. Put another way, these companies the SEC has been looking into aren’t trading on secondary exchanges because they can’t go public they are trading there because they don’t want to go public yet. There’s a big difference. We may not know much about their P&L sheets, but we know how popular their services are, we know quite a lot about their management teams, we have solid intelligence into their top line revenues and we know that they have professional boards of directors including venture capitalists who have a fiduciary duty to their shareholders. They are covered by press and analysts more closely than many publicly traded companies.
  • That’s because companies like Zynga, Facebook and LinkedIn are already larger than most the Internet and technology companies that have been filing to go public in the last year. Unless someone is engaging in total fraud– in which case, their VCs are in a lot more trouble than secondary buyers would be– it’s hard to imagine these companies are worthless as investments, and it’s hard to imagine the market values would plummet too far once broader markets were able to invest. At $40 billion to $50 billion range, Facebook is valued at about the same amount as Tencent, the largest Web company in China. Given the growth Facebook is seeing even after passing Yahoo as the largest Web site in the world, it’s priced for perfection and hardly a bargain, but the valuation isn’t outrageously out of line either.

  • That means, the question over disclosure is really about how nosebleed the valuation can reasonably get as more people try to squeeze into these stocks and can’t know all the underlying information. But valuations of high-growth companies have never been based solely on facts. They are based on promise, growth projections and the demand to invest. That’s less exaggerated among public-traded companies, but still a big factor.
  • For example, are Yahoo’s non-Asian assets actually worthless right now? Of course not. It’s one of the largest properties on the Web and one of the largest sellers of online advertising in the world. But the market values them at practically nothing, because of a lack of faith in management and the company’s promise and growth going forward. On the flip side, the public had plenty of numbers for publicly-traded Internet companies in the late 1990s, and that didn’t keep valuations grounded. Anyone who thinks more numbers will make Facebook’s valuation fall is fooling themselves about how rational the American investor is.

People keep saying companies like Facebook and Zynga are “essentially” public companies, but that “essentially” is a pretty big qualifier. They are like public companies in that they have methods for tapping investors for large amounts of cash to grow the business and some shareholders have the ability to sell some of their shares.

But they are not like public companies in that the vast majority of the public can not buy their shares. That’s an important distinction where the Securities & Exchange Commission comes in. When the public can own something, the government’s duty is to protect that public citizen. If a company wants the full value of a liquid exchange where people can buy and sell stocks at will, and it can use a stock currency or public debt to fuel more growth? Yes, it has to play by all the rules that includes. But when it is just opening up trades to a slightly wider pool of rich industry insiders, any increased burden for disclosure and reporting should be similarly moderate.

At the end of the day these are still private companies, and they deserve to have the benefits of being private. It’s a lot like the debate the industry had back in the early 2000s when the Mercury News led a Freedom of Information crusade that would require any venture firm that accepted public pension fund money to divulge underlying portfolio information. As a reporter, I’d love to see the venture world’s dirty laundry splayed in front of me, but I don’t believe that it is my right. It’s hard to argue it was really paramount to the public’s interest, when no bombshells resulted, these allocations were a tiny part of public endowments and, as it would turn out, the least of those endowments’ problems.

Still, even if the intentions were good, guess what wound up happening? Every top venture firm just kicked out state pension funds as LPs, ultimately hurting the pension-holders. The same thing will happen here if the SEC starts getting too in-everyone’s-face about secondary markets. Companies that are driving the bulk of the deals on secondary markets will just wait to go public or do private deals with firms like Elevation, Andreessen Horowitz, DST and Naspers, leaving everyone else to wait for the IPO.

I still think there are some cultural dangers to secondary exchanges that we haven’t seen the full ramifications of yet. But there is a clear downside for the companies and the Valley ecosystem if these secondary exchanges fall under too much government scrutiny, and I just don’t see that much upside. Consider why these companies take longer to go public in the first place– the very thing that created the market demand for secondary markets: It was well-meaning changes in regulations after the late 1990s that hurt smaller companies’ ability to go public, dampened entrepreneurs’ enthusiasm to do so and ushered in a raft of unintended consequences.

The government has never understood how the Valley’s economic engine works. That’s OK. We like it that way. We don’t ask for bailouts, and there have been few cases of fraud among technology’s venture backed, pre-IPO elite. In fact, the ones that come to mind– like Enron and Mercury Interactive– were perpetrated by publicly-traded  companies. So much for transparency protecting everyone.

As is, the SEC is understaffed and underfunded to adequately police Wall Street. My advice to the SEC: Just stay out of the system until companies start crossing clear lines like having an excess of 500 outside-the-company shareholders. My advice to companies: Keep using the secondary markets judiciously so you don’t become a pet Congressional cause. And my advice to people buying and selling on the secondary markets? Like anything else in this country, buyer beware.



More Lawsuits In The Land Of Electronics: Sony Sues LG Over Patent Spat

Posted: 29 Dec 2010 09:08 AM PST

In the electronics industry, it often seems like everyone is pretty much suing everyone over something, somewhere.

This morning, I caught that Sony Corporation has apparently filed suit against LG Electronics (right before CES, no less).

LG Electronics is the division of the LG conglomerate that markets and distributes the group’s home entertainment devices (TVs, Blu-ray disc players, DVD recorders and whatnot) as well as its mobile phones and home appliances, among other products.

For the record, LG is the world’s third largest handset maker after leader Nokia and Samsung, with an aspiration to become number two by 2012.

I haven’t yet been able to pin down what the lawsuit is about, but from what I can gather, Sony is targeting two LG subsidiaries based in the United States, namely LG Electronics Mobilecomm U.S.A. Inc. and LG Electronics U.S.A. Inc.

For your background: LG Electronics Mobilecomm USA does business as LG Mobile Phones and is the U.S. division that markets the company’s mobile phones, portable wireless-enabled PCs, and related accessories. The company also provides sales and marketing support in North America for parent organization LG Electronics.

From what I can tell at the time of writing, it doesn’t concern a patent infringement suit (see update below), as is usually the case when electronics companies turn to the courts, but I haven’t been able to retrieve what it is about.

The lawsuit was filed on December 28, 2010 in the U.S. District Court for the Central District of California. We’ll update as soon as we get more information.

Update: Benzinga and Bloomberg are reporting that Sony is attempting to block LG’s mobile phones from entering the United States, on the basis that phones such as LG’s the Lotus Elite, Neon, Remarq, Rumor 2 and Xenon use Sony technology.

Sony is also seeking LG to stop selling its Blu-Ray DVD player for the same reason.



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