Tuesday, June 21, 2011

The Latest from TechCrunch

The Latest from TechCrunch

Link to TechCrunch

ToutApp Adds An Intelligent Content Manager To Your Email Client

Posted: 21 Jun 2011 09:00 AM PDT

There have been a number of startups that have helped users manage contacts within email clients, such as Gist or Rapportive, but what about an app that helps you better manage the content of your emails. Enter ToutApp (part of the 500Startups Summer Accelerator program), which is is canned email responses on steroids. The startup is announcing they’ve closed an $350,000 seed round from 500 Startups, Esther Dyson, Eric Ries, Daniel Eskapa, NYC Seed Fund, Joshua Baer, and others.

ToutApp aims to solves the repetitive email problem intelligently. The app is really aimed for users who send a large number of outbound emails that have similar content. When you sign up for Tout, and integrate your Gmail account, the app will parse through your emails and identify the different types of mass emails you send. So if you are an entrepreneur, Tout will separate your email pitches to journalists from your email pitches to investors.

You can then send emails to your contacts and simply choose one of the templates that has been created in Tout, and adjust the content based on the contact in various fields.

Tout also includes a host of additional features for email, including the ability to track views, clickthroughs, schedule emails and more. Tout will automatically sync your CRM Contacts and record e-mails, opens, and clicks. For now, you can only send emails via Tout (and can’t reply) but eventually, you’ll be able to do both.

Since the company’s launch six months ago, ToutApp has helped over 2,500 people save over 80,000 minutes in their day-to-day emails through templating, click/view tracking and analytics. ToutApp was founded by Tawheed Kader, who previously co-founded HipCal, an online calendering service which was sold to Plaxo in 2006.

The new cash will be used towards product development; and the startup will soon be releasing an iPhone app.

Be The Mark In Blekko’s 3 Engine Monte

Posted: 21 Jun 2011 09:00 AM PDT

Search engine Blekko is pretty excited about their new Zorro launch that I just wrote about. All new design, a move from red to blue links and a general declutterfication is just the shiny stuff on top. Underneath there’s a new web index and they’re really putting those slashtags to work – about 1,000 of them are now auto-added to appropriate results pages.

But enough tech jargon. The proof is in the pudding, they say, and Blekko just served some pudding. Try out their new tool called 3 Engine Monte (derived from the popular 3 Card Monte confidence game.

You can get to it from the link above, or via the Blekko home page. Or just add /monte to the end of any query. You’ll see three sets of results in three columns, all formatted identically. Your job is to pick the one you think is Blekko and click on it. You’ll then see if you’re right or wrong.

I’ve played it a few times and can beat it just about every time. The key is to look for certain signals, like the inclusion of content farm stuff. It still appears high in Google and Bing results, but you won’t see it at all in Blekko. Give it a try, and good luck.

Slash Through Spam With Blekko’s Zorro Update!

Posted: 21 Jun 2011 08:55 AM PDT

Ok, I got a little over excited in the title. But the new version of search engine Blekko, called Zorro and launching right now, is pretty cool. There have been big improvements visually. Gone are the red links of previous version along with most of the left sidebar clutter. In fact, that left sidebar is gone and has been replaced with small icons next to search results to tell you what site they’re from at a glance.

The company has also increased search relevance substantially by auto-including some 1,000 slash tags, up from just a handful previously. That means that for many results you are looking at hand picked sites that are known to have high quality content. Content farms just can’t get through slashtags.

Search for “pregnancy tips” and you’ll see to slash tags, for /pregnancy and /health, and quite good results compared to Google. But on Blekko you’re not done. Click on one of those slash tags to drill down into results relevant to that tag. Answer relevance goes even higher. On Google you’d have to visit the next page of results, or rephrase your query. Both are time consuming.

What’s most amazing about Blekko, though, is it’s still around. So many ambitious search startups like Cuil and SearchMe went for it and flailed. But Blekko, six months in, is growing nicely and has around 1 m unique IPs visit the site monthly. Early contextual ad testing, they say, is producing good results. When they finally turn that on for good, a real revenue stream will be flowing to Blekko. In other words, it may be time to start thinking of Blekko as a long term “we’re still here” startup. They have no appearance of fail anywhere near them yet.

One more thing Blekko is launching today is a fun tool called 3 Engine Monte. More on that in my next post.

Daily Deals And The Potential For Fraud

Posted: 21 Jun 2011 08:47 AM PDT

Editor's note: Rocky Agrawal continues his in-depth guest series looking at the daily deal industry. Agrawal is an entrepreneur who has worked on local products since 1995. He blogs at reDesign and Tweets @rakeshlobster. Groupon is currently in a quiet period in relation with its planned IPO, but should be able to answer investors’ questions during a roadshow prior to the offering.

In my post about Groupon’s potential for collapse, I talked about the possibility of merchant fraud. Because Groupon pays merchants everything within 60 days, they are exposed to the possibility of fraud or the merchant going out of business. Other deal providers pay even faster. LivingSocial pays out everything in about 15 days. Google Offers pays out 80% in about four days.

Nobody knows how much fraud occurs, or what steps are taken to prevent it.  Groupon’s S-1 identifies refund reserves (which would cover more than just fraud) of $14 million in 2010 and $26 million in the first quarter of 2011.  The first quarter number represents 4% of revenue. The S-1 also mentions both consumer and merchant fraud as risk factors.

Groupon does take steps to mitigate both kinds of fraud.  On the merchant side, the fact that it withholds full payment for 60 days helps it weed out fake or closed businesses (consumers complain directly to Groupon).  Groupon also tries to vet businesses in the first place by looking at online reviews, Yelp, and other sources.

But these measures are not full-proof, and the issue is not only with Groupon.  The structure of the daily deals business makes it ripe for fraud and other abuse: upfront payouts, no recourse if something goes wrong, no collateral and minimal risk assessment. You can take the money and run.

Fair warning: the rest of this post may make your head spin.

One of the things I’ve always scratched my head over is deals at service businesses that sell in very large quantities. A spa or a barber shop or a salon can only handle so much business.

For an unscrupulous merchant looking to commit fraud against the daily deal providers, it is not too hard to imagine how it would go about doing so. Sign up for a deal and sell as many as you can. Then when somebody calls to book an appointment, say you’re overwhelmed by the response and can’t book them right away. (Sounds logical, right? You sold 5,000 vouchers.) Better yet, just leave the phone off the hook. You won’t have to say anything—they’ll get a busy signal and get the message.

After you’ve received your payout, cash it and skip town.

This may sound far-fetched and the chances of this happening admittedly are low, but as the daily deal industry grows, it only takes a small percentage of overall deals to involve merchant fraud or simply going out of business to become a very real issue.  Fraud is pretty common in the payments space. I’ve spent a lot of time studying payments and whenever there is money involved, someone is looking for ways to get it. PayPal nearly went under in its early days because of fraud.

As a risk analyst, some of the key indicators I’d look for are: offering too good a deal, selling well beyond capacity and allowing people to buy multiple units (on something that is supposed to be a user acquisition play).

But the daily deal companies don’t seem to be doing that. In fact, they’re doing the opposite by encouraging uncapped deals. In most organizations, the incentives for sales tend to be around volume and dollar amount of sales. Sales reps would have a disincentive to identify possibly fraudulent merchants. (No sale, no commission.)  Separate research departments are supposed to vet the merchants, but they are often overwhelmed.  Given that markets are valuing daily deal companies on revenue, there is also a disincentive for senior management to make an effort to fight fraud in the short term. The fraud actually shows up as revenue.

It doesn’t even have to be fraud. Just overselling a business can be problematic.

It can be hard to tell which is which. In January, Salon 505 sold more than 3,000 vouchers through LivingSocial for $99 on January 21, with an alleged value of $550. ($550 for a half day spa treatment in Austin? Whatever.) With typical deal terms, that should be about $165,000 in revenue to the merchant. By February 16, there were reports of trouble redeeming vouchers. In that month, the salon redeemed about 120 vouchers. At that rate, it would take about two years to redeem all of the vouchers that were sold. In June, the 34-year-old business closed.

That is just one example. My inbox is full of dozens of stories from TechCrunch readers about businesses that have closed shortly after running a daily deal.

So far, consumers have been protected. Even if a merchant disappears, refuses to provide service or is simply overwhelmed, the big daily deal companies have covered the losses. That’s great for consumers, but it creates risk for investors because returns can be significantly affected by fraud losses.

If the deal companies were doing risk assessment, like a bank would, they would never run deals like this.

Because the deal companies generally require businesses to take a 75% hit off their regular selling price, they also will tend to get riskier businesses in their portfolio. The most stable businesses don’t need to discount their product to that degree. And if they need money for expansion, they can get it from a bank on much better terms.  Whether they know it or not, the deal companies are in the factoring business.

Fraud, chargebacks and customer service

From all of the consumer feedback I’ve received, customers are taken care of when bad things happen. This can be a great thing. Repeat customers are important. Great word of mouth is important for a new company building a completely new business. But it’s really unusual to have so many good customer support stories. I received one email from someone who got her money back from a deal provider because she wasn’t happy with the quality of her cleaning service—a highly subjective complaint.

In addition to the merchant, consumer and the deal provider, there’s another important party involved: the payment system. VISA, MasterCard and others closely monitor what are called chargebacks, transactions disputed by cardholders. If a company’s chargebacks are high, they will require it to keep more money in reserve. If they’re high enough, they’ll stop letting the company take credit cards. Banks don’t want to lose money if a merchant collapses. (As far as the credit card companies are concerned, the deal companies are the merchant of record.) Groupon has merchant liabilities of more than $291 million and an unknown amount of vouchers outstanding.

Groupon mentions all sorts of fraud as risk factors in its S-1:

We may incur significant losses from fraud and counterfeit Groupons. We may incur losses from claims that the consumer did not authorize the purchase, from merchant fraud, from erroneous transmissions, and from consumers who have closed bank accounts or have insufficient funds in them to satisfy payments. In addition to the direct costs of such losses, if they are related to credit card transactions and become excessive, they could potentially result in our losing the right to accept credit cards for payment. If we were unable to accept credit cards for payment, we would suffer substantial reductions in revenue, which would cause our business to suffer. While we have taken measures to detect and reduce the risk of fraud, these measures need to be continually improved and may not be effective against new and continually evolving forms of fraud or in connection with new product offerings. If these measures do not succeed, our business will suffer.

For an e-commerce company, not being able to take credit cards would be a death blow. If you were concerned about that happening, one way around it would be to just issue refunds. A customer has a problem? “Sorry, we’ll give you your money back.” That keeps your chargeback rates low. It also reduces fraud costs because you don’t have to pay bank-imposed chargeback fees.

The payment companies monitor refunds, too. But the thresholds are much higher than they are for chargebacks.

Another payments-related risk the deal companies may face is the perception they “advance cash” to the small business rather than “buy service.”  Merchant agreements typically prohibit giving cash to third parties when processing a purchase transaction. Daily deals companies charge transactions against their merchant accounts and pay a factored percentage back to the merchant providing the service. If the card companies were to consider what deal companies do as a cash advance, that could be a big problem.

It also could be a problem that the daily deal companies are managing just fine. Again, we just don’t know. As the IPO draws near, investors might want to ask for more information.

Photo credit: Marius Watz

Apple Stuffs A 3TB Hard Drive Into The Time Capsule And Prices It At $499

Posted: 21 Jun 2011 08:43 AM PDT

Just like the FCC tipped, Apple has a new Time Capsule and it’s rocking a ton of storage. Inside the familiar case is a server-grade 3TB hard drive of unannounced pedigree, which is 1TB more than the outgoing version. But that’s about all that’s changed. The unit still features 3 Gigabit Ethernet ports and a USB host for printer and hard drive sharing. It encrypts 802.11 a/b/g/n with WPA/WPA2 along with 40/128-bit WEP and backs up data to the massive 3TB hard drive through OS X’s Time Machine.

Read more…

Video: A Look At High-Res 3D Laser Scanning With Makerbot’s Bre Pettis

Posted: 21 Jun 2011 08:39 AM PDT

In the olden days, when you wanted a bust made, you hired some fancy sculptor to come to your house and sit with you for hours a day until, months later, you had a handsome marble or ceramic bust. Now, however, you can get a bust made in a few minutes using laser scanners and Makerbot rapid prototyping machines. Ain’t progress wonderful?

Makerbot’s Bre Pettis invited me over to his new storefront in Brooklyn to build a bust for his upcoming New York Notables event in July. I got to join folks like Cory Doctorow and Moot (in miniature form) as we were scanned into a PC using a Polhemus laser scanner. To grab my physical details they dusted me talcum powder and then sat me down for a good two minute scan. The process was quick and painless and the results, as you see in the video below, were impressive.

Read more…

Peter Thiel, Lerer Ventures And Others Put $600K In BestVendor

Posted: 21 Jun 2011 07:31 AM PDT

For businesses looking for user reviews of payroll providers, collaboration software, or even a phone system; there is no Yelp, Glassdoor or TripAdvisor for these business products. BestVendor aims to fill that void. The startup has raised $600,000 in seed funding led by SoftBank Capital and Lerer Ventures with participation from SV Angel and Peter Thiel.

Founded in January 2011, BestVendor helps SMB businesses make faster, smarter purchasing decisions through social recommendations. BestVendor essentially aims to be a Yelp or Glassdor for product reviews and recommendations for businesses. Similar to Glassdoor’s ‘get to give’ model, users of the site share and rate a few products they use in their business. In exchange, they get free access to all other reviews and profiles on the site.

BestVendor, which is based in New York, aims to crowdsource reviews for collaboration software, web hosting providers, payroll providers, telecommunications platforms and more. Users can filter by industry, company size, vendor and more.

BestVendor hasn’t turned on monetization yet, but plans to charge vendors based on leads and also offer enhanced vendor listings (similar to Yelp).

Meet The Nokia N9: A Colorful Slice Of MeeGo Magic

Posted: 21 Jun 2011 07:17 AM PDT

Turns out Greg was right yesterday, PocketNow's leaked press shot is in fact Nokia's long awaited MeeGo handset, the N9. The rumor mill has thrown out a few different specs on this device, including a QWERTY keyboard (which is not present here), so we’re glad to finally be able to set the record straight.

The N9 is an entirely buttonless handset (with the exception of a volume rocker and camera shutter button), and is basically just a 3.9-inch sheet of 854 x 480 AMOLED screen. On the back, that polycarbonate shell is colored all the way through so you don't have to worry so much about those ugly scratches.

And that’s only the beginning: check out an introduction video after the break.

Read more…

LongTail Video Launches Self-Serve Online Video Platform For Publishers

Posted: 21 Jun 2011 07:00 AM PDT

There are a number of platforms that allow publishers to host and serve video to visitors, including Brightcove and Ooyala. Today, LongTail Video is launching its self-serve video platform, LongTail.TV, which aims to be an affordable hosting option for smaller publishers.

The service is built around LongTail’s cloud-based JW Player, which can be customized and branded. With LongTail.tv, publishers can customize and embed the JW Player on their sites, add content from either their own video library or from LongTail's Media Gallery and earn money from ads delivered from LongTail's content providers.

LongTail's Media Gallery includes millions of video titles from premium syndication partners, including AOL's 5min Media as well as YouTube. Publishers that embed video titles from these partners will be paid a portion of all ad revenue generated from their user traffic.

While Brightcove and Ooyala power video for larger publishers and media companies (we actually use Ooyala), LongTail aims to a cost-effective, platform for smaller to mid-size publishers (hence the name ‘longtail’) that don’t draw as much traffic.

Oracle Buys Web Content Management Company Fatwire Software

Posted: 21 Jun 2011 06:04 AM PDT

Oracle has just announced a new acquisition today—web experience management company Fatwire Software. Financial terms of the deal, which is expected to close mid-2011, were not disclosed.

Fatwire Software’s web content and experience management software powers web presence for organizations, allowing them to deliver relevant customer content, build community engagement and drive site stickiness and loyalty. FatWire currently serves more than 500 customers in industries, including financial services, media, technology, manufacturing, public sector, retail, healthcare and more.

The acquisition will be used to offer Oracle clients improve online engagement across web, mobile and social channels, through website optimizations.

Oracle’s recent acquisitions include ATG for $1 billion.

DealsGoRound Launches Deal Wallet To Let Consumers Organize Daily Deals In One Place

Posted: 21 Jun 2011 05:30 AM PDT

The three people following my posts might be aware that yesterday I wrote about an awesome startup called CityPockets that offers users a wallet for all their daily deals — as well as a secondary marketplace to resell deals they won’t use. Well, today DealsGoRound, one of the first secondary daily deals markets, announced that it’s not to be outdone. The startup, which was founded in March 2010, is launching its own free service today called Deal Wallet — a virtual wallet that allows users to import, safely store and manage their daily deal purchases across deal providers.

Having operated and managed one of the first secondary marketplaces for daily deals, DealsGoRound is coming at the deal resource paradigm from the opposite direction compared to CityPockets. Both startups offer similar products, usability, and features. One leg up for DealsGoRound and Deal Wallet, however, is that they can be accessed via mobile apps on the iPhone and Android.

DealsGoRound also enables users to receive weekly email alerts about their deal inventory, which include expiration dates for each deal, so that users don’t let those deals slip by without notice. If, on the other hand, you find your deal inventory brimming with deals you’re not likely to use, with one click of the mouse, users can list the deal for resale in DealGoRound’s secondary marketplace.

Users can also sign up for a weekly reminder of big discounts from across an array of different deals sites, or share deals with their friends on Facebook and Twitter.

Like CityPockets, DealsGoRound will deposit the money into the PayPal account you've added after you sell your spare deals, and you'll receive an email confirming the transaction. DealsGoRound, too, takes a small cut of each resale.

But, for both startups, the challenge lies in monetization. Compared to Groupon or LivingSocial, which have higher margins, often making close to 50 percent of the purchase price, DealsGoRound’s margins, for example, are closer to 10 percent. (Though back in March, DealsGoRound did raise $600K in seed funding from various Chicago angels.)

That being said, the fact of the matter is, that 10 to 20 percent of the vouchers purchased across the some 450 daily deals sites in the U.S. go unredeemed because people don’t get around to using them. According to Founder and CEO Kris Petersen, who was formerly an entrepreneur in residence at Lightbank (the Chicago-based fund started by a set of entrepreneurs including several of the Groupon founders), the big daily deal sites like LivingSocial and Groupon are starting to come around to the idea of secondary markets.

And, when I asked him if he thought startups like his might eventually see competition from Groupon, were they to add a secondary market, the CEO said that this kind of functionality just doesn’t seem to be on their roadmap yet. The only way deal wallets and secondary deal markets can be trusted is if they’re acting as independent businesses. While Groupon might add a wallet for its own deals, the problem of fragmentation in the market remains, and consumers just don’t want to visit 30 different sites to keep track of all their daily deals.

Startups like DealsGoRound and CityPockets are providing an already-saturated market with important additional services. Secondary marketplaces for deal resale are an important solution to the "breakage problem" cited by many local vendors as reasons for not jumping into the daily deal deluge — as well as the problem of fragmentation. Both services are easy-to-use and address serious pain points in the market, and as the many lucrative Groupon clones have proven, there’s plenty of room left in this space for competition. CoupRecoup and Lifesta would no doubt agree. And we’re all about choice here at TechCrunch.

So let us know what you think.

SAY Media Acquires Digital Agency Sideshow

Posted: 21 Jun 2011 05:12 AM PDT

SAY Media, the company that was formed after the merger between VideoEgg and blogging software maker Six Apart, this morning announced its acquisition of Sideshow, a digital agency with offices in the US, Europe and the Middle East.

The Sideshow team will join SAY's Media Lab, which the company describes as a ‘creative and technical group dedicated to exploring new products and experiences for the company's network of owned and operated media properties’.

Sideshow brings some expertise in building digital experiences for major brands such as Microsoft and FOX, which SAY Media says will be crucial for the development of new ways for people to create, consume and monetize digital content (example: xoJane.com).

SAY Media says the acquisition will also allow it to create more content and advertising ‘experiences’ for the recently acquired Dogster, as well as its network of partner sites.

Sideshow was launched, as one of the few purely digitally focused agencies, back in 1999.

Terms of the acquisition were not disclosed.

Roost Reinvents Itself As A Super-Easy Social Media Manager For Local Businesses

Posted: 21 Jun 2011 05:00 AM PDT

The real estate bust wasn’t kind to Roost, which started out as a real estate search engine. But CEO Alex Chang took the $8 million he raised in late 2008 and convinced his investors to back him down a completely different path: a service for creating and managing social media marketing campaigns for local businesses.

Roost relaunched in the middle of last year, first going after the 25,000 real estate agents who used the original Roost. Then last March, Chang opened up Roost to other local businesses. Roost taps into Facebook and Twitter, and helps restaurants, auto dealers, non-profits and others create social media campaigns in 20 minutes on a Sunday night.

Merchants tell Roost what industry they are in, and Roost gives them suggested RSS feeds and other relevant content they can share with their fans, followers and customers. “These small business don't have time, they don't know what to post and they don't have a big network,” says Chang. “You do all this work and you don't get that much reach.” He is trying to solve these three problems by making Roost a low-touch product that does most of the work for the merchants. It creates an automated social media campaign that sends out status updates or Tweets periodically with links, photos, questions, and quotes. Roost also offers the ability for businesses to band together in Circles, in order to cross-promote offers, links, and other content.

Today, Roost is launching another new feature, the Roost Local Scorecard. It looks at how many fans and likes a business has on Facebook, and how many of those are coming from people who live in the same city to give business owners a sense of how they are penetrating their local market with their social media messages. “Not all fans are created equal,” says Chang. The score is an indexed number from 1 to 100, with businesses moving up the ranks from Rising Star to Hotspot to Local Legend.

Roost is free for now, but Chang plans to add premium features for which he plans to charge a monthly fee. Helping small businesses run social media campaigns is fine, but if Roost can get to the point where it is helping them track and reward customer loyalty beyond likes that is where all of this starts to get interesting.

Taleo Acquires Talent Management Software Company Jobpartners For $38M

Posted: 21 Jun 2011 04:12 AM PDT

Taleo, a provider of on-demand talent management solutions, has acquired its European rival Jobpartners for approximately $38 million in cash. The move doubles Taleo’s customer base and improves the publicly listed company to better serve its Europe-based clients.

More than 350 customers currently use Taleo’s cloud-based talent management solutions for recruiting, performance management and learning.

Jobpartners offers similar solutions to the likes of Carrefour, Deutsche Post DHL, Nike EMEA, Rabobank and Xerox, in more than 50 countries and in 28 languages, so the purchase brings scale to Taleo’s business on an international level.

The deal has been approved by Jobpartners board of directors and is expected to close in the quarter ending September 30, 2011 subject to customary closing conditions.

The acquisition of Jobpartners is expected to add approximately $2-3 million to Taleo’s GAAP revenue and $5-6 million to its non-GAAP revenue in 2011.

Development As A Service Platform Cloud9 Raises $5.5M From Accel And Atlassian Software

Posted: 21 Jun 2011 03:57 AM PDT

Cloud9 IDE, a commercial development as a service (DaaS) platform, has raised $5.5 million in Series A funding from Accel Partners and product development software company Atlassian Software.

Cloud9 IDE, which spawned from Ajax.org, is aiming to be the IDE for Javascript developers (Javascript creator Brendan Eich is an advisor to the startup). Founded in 2010, Cloud9 provides a cloud-based commercial integrated development environment that allows web and mobile developers to work together in remote teams anywhere, anytime. The platform’s NodeJS framework supports HTML5, Python, Ruby and PHP.

Cloud9 enables developers to easily start projects behind a single URL, share their code, and collaborate with co-developers all over the world without having to install anything on the client. Over 30,000 developers around the world are already using Cloud9, which only launched to the public in March of this year, to build and collaborate on software projects.

The platform runs in the browser and lives in the cloud, allowing development teams run, debug and deploy applications from anywhere, anytime. The DaaS also offers syntax support for popular programming languages; the ability to simultaneously collaborate on code and projects; the ability to run, realtime code analysis; the ability to debug and test applications; and includes GitHub, Bitbucket and Joyent integration. Cloud9 offers a free version and a premium offering which runs $15 per month.

While we know Accel is actively looking for investments in the enterprise infrastructure market; Atlassian as an investor is a bit of a surprise. This is the first investment for the company, which raised $60 million from Accel a year ago. Cloud9 will be the first investment for the Atlassian.

Scott Farquhar, Atlassian CEO and co-founder, says that Cloud9′s platform is complimentary to Atlassian’s development software. For background, Atlassian's software development and collaboration tools help teams conceive, plan, build and launch products. Products include JIRA (issue tracker) and Confluence (content collaboration). The company's offerings are used by over 20,000 customers around the world, including Facebook, Zynga, Cisco, and Adobe.

Cloud9 will use the funds to add support for multiple languages, platforms, and cloud/mobile SDKs. The investment will also be used expand the startup’s Amsterdam development team and open a new US headquarters in San Francisco.

ScaleXtreme Raises $11 Million For Cloud-based Systems Management Software

Posted: 21 Jun 2011 03:52 AM PDT

ScaleXtreme, a vendor of cloud-based systems management products, this morning announced it has landed $11 million in Series B funding in a round led by Ignition Partners with participation from previous backer Accel Partners. Frank Artale, managing director at Ignition, will join the board that includes Ping Li from Accel and ScaleXtreme's Nand Mulchandani and Balaji Srinivasa.

Ping Identity Raises $21M To Provide A Secure, Single Sign-On For Enterprise Applications

Posted: 21 Jun 2011 03:00 AM PDT

Ping Identity, a company that creates secure, cloud based sign-in platform for enterprise applications, has raised $21 million in funding from Triangle Peak Partners, Silicon Valley Bank, and existing investors Appian Ventures, Draper Fisher Jurvetson, General Catalyst Partners, SAP Ventures and Volition Capital. This brings the company’s total funding to $34 million.

Ping’s PingFederate allows employees, consumers, customers or partners access to multiple cloud resources using a single username and password. PingConnect eliminates passwords for virtually every major SaaS application including Salesforce, Google Apps, Concur, SuccessFactors, Workday and many more and lets companies manage user identities via single sign-on that works across all of these applications.

Founded in 2002, Ping Identity has more than 600 customers including 40 of the Fortune 100 and 150-plus SaaS partners already use Ping Identity’s cloud identity management products.

The new investment will be used towards product development, and sales and marketing efforts.

Not only is the online identity market a billion dollar business, but its set to become a federal issue if the U.S. government pursues its strategy of a "trusted-identity ecosystem." It should be interesting to see if Ping Identity (and its competitors like Okta) play a part in this potential initiative.

Citrix Backs Mobile Cloud Technology Startup

Posted: 21 Jun 2011 01:33 AM PDT

Citrix this morning announced an investment in mobile technology company Core Mobile Networks, marking the third funding commitment for the company's Startup Accelerator, its Silicon Valley-based seed investment initiative which debuted in December 2010. Core Mobile Networks correlates information from enterprise IT systems with content in the cloud, and delivers it to mobile devices such as Apple's iPhone and Android handsets over AT&T, Verizon, Sprint networks, in real-time, with contextual relevance.

Wildfire Gets A Major Upgrade, Launches Facebook Page Builder, Analytics, And More

Posted: 21 Jun 2011 12:00 AM PDT

Back in January 2010, a small FBfund company called Wildfire was making a name for itself by helping brands and businesses launch viral campaigns — sweepstakes, contests, and the like — on Twitter and Facebook. It had around eight employees.

Fast forward to today: Wildfire now has a team of over 120, and it’s raking in money from a host of top brands and companies (as well as many smaller ones). And now, they’re upping the ante: in addition to the viral campaign builder that has been their core product to date, Wildfire is now offering what it’s calling a ‘Social Marketing Suite’ — which CEO Victoria Ransom says makes Wildfire a one-stop shop for all of your online marketing needs.

So what exactly does the new suite entail? The first new product is the Page Manager, which is meant to help businesses craft Facebook Pages that look good and can be frequently updated. There are several templates and support for custom designs, and support for multiple tabs.

The second new product is Messenger, which allows companies to schedule posts and manage inbound messages — you can delegate certain messages to specific employees, if you’d like.

The last new product is the Dashboard, which offers an overview of analytics that’s more detailed than Facebook’s built-in Insights feature. There’s also a mode that lets you chart your progress against a competitor’s (we saw a similar feature from ContentAide back in April).

Rounding out the suite is the Promotion Builder, which has been Wildfire’s main product to date. This allows companies to construct giveaways using a straightforward interface — drag and drop the text fields you’d like to require during the sign up, tweak the banners, then enter the official rules and you’re off and running.

The company isn’t announcing exact pricing yet (you’ll have to call in to get a quote), but says that the suite will range from “low hundreds” to “low thousands” of dollars per month for a subscription, which includes both the campaign builder and the products above (though different features will be available for different plans). The social suite is already being used by some large brands, including Facebook itselfLady Gaga, and EA Sports.

Wildfire isn’t alone in this space — competitors like North Social and Involver also offer applications that can help with many of these tasks. But this is also a huge market, with many businesses eager to establish themselves online without having to hire someone to design them a custom Facebook page.

MyGengo Raises $1 Million To “Own” Translation

Posted: 20 Jun 2011 11:47 PM PDT

Translation service MyGengo has raised one million in seed financing from Point Nine, Mitch Kapor and Wenceslao Casares. Prior to today’s investment, the platform had raised $750k from Dave McClure’s 500 Startups. Along with the funding MyGengo is also announcing the hiring of Kenji Yamamoto as Chief Revenue Officer and Jeff Binstock as Chief Operating Officer.

MyGengo is like Mechanical Turk for translation supplementing automated techniques with over 2,500 translators in every time zone. Using a combination of machine and human processes, service has translated over 5 million words in the first three months of 2011, more than the past two years combined.

In the same online translation space as Smartling, One Hour Translation and Speaklike, MyGengo translates thousands of texts daily in 14 languages for clients such as ShapeUp, Evernote, Youversion and Producteev.

What the startup does differently than its competition is offer a low price point (25% below One Hour Translation) and an API and Rails, WordPress and Django plugins for developers.

“MyGengo will *own* translation within the major B2B2C channels that allow merchants and publishers to sell and communicate across borders,” says MyGengo CEO Robert Laing. “This is a huuuuuuge market so we will see a LOT of winners in this space — us AND our competitors! ‘Going Global’ is a huge, defining theme for the Web over the next few years, and about as big a market opportunity as there is.”

Apple’s SaaS: Software as a Soul

Posted: 20 Jun 2011 09:59 PM PDT

Over the weekend, The New York Times ran a piece entitled Lessons in Longevity, From IBM. In it, author Steve Lohr looks back at the past 100 years of IBM and points out the keys to their longevity: shifting and adapting to new markets and times. He then lays how three tech powers today — Microsoft, Google, and Apple — may make similar moves to weather the inevitable storms.

At a high level, the parallels make some sense for Microsoft, and to a lesser extent, Google. They make no sense for Apple.

Microsoft and Google, as Lohr points out, are hugely successful companies right now. But their businesses have potential points of weakness because almost all of their money comes from one or two areas. In Google’s case, the one area is search advertising. In Microsoft’s, it’s Windows and Office (the Server division makes a good amount of money, as Lohr notes, but it’s peanuts compared to the two towers).

Lohr says that Microsoft up-and-coming gaming division could eventually be a key to saving them. And for Google, it could be Android. Again, this all makes sense (though is hardly anything new).

But when it comes to Apple, Lohr loses it. First of all, Lohr talks about IBM’s near-failure in the 1990s, but completely leaves out the fact that Apple too almost went under in the same time frame. In fact, they were much closer to death. Then Steve Jobs came back and — we all know the story.

The key is that Apple, as successful as they are right now, has already had to reinvent themselves. And they did it with stunning success. In fact, their reinvention has been more successful than IBM’s most recent reinvention. It’s just that Apple is not 100 years old. Nor is their metamorphosis something that any other company in the tech world (and perhaps beyond) is likely to be able to replicate anytime soon. And in fact, Apple’s metamorphosis is still ongoing.

And that leads to point two.

In remarking on the same article earlier today, Daring Fireball’s John Gruber tears into Lohr’s assertion that Apple’s hardware business could be easily “mimicked”. Specifically, he questions if Michael A. Cusumano, a professor at MIT that Lohr cites, understands Apple at all when he suggests that Apple in the future will have to shift to software and services to stay alive.

“I wonder if the professor thinks companies like, say, Rolex and BMW ought to shift to ‘software and services’ too?,” Gruber writes. He also notes that while Lohr brings up how Macs are still dwarfed in sheer unit sales by Windows PCs, Lohr completely disregards the fact that Apple is now in command in terms of profit share amongst PC-makers.

This is something which, comically, is almost always overlooked — even though it’s entirely deliberate on Apple’s part.

I also think that Lohr and Cusumano completely disregard something else important: innovation. As in, while it’s certainly possible that “Apple's product designs, however impressive, will eventually be mimicked and come under price pressure,” as Cusumano suggests, that seems to be assuming Apple stands still and stops innovating in the areas of hardware design and manufacturing. That’s ridiculous.

I’ve been buying Apple products for just about ten years now (yes, that’s all). In that entire time, I’ve yet to see a product by a competitor that matches the build quality and aesthetic of Apple’s products in their major areas of focus (Macs, iPods, iPhones, and now iPads). Not once.

I know that sounds like just about the biggest fanboy thing to say… well, ever. But am I wrong? Even Apple haters cannot deny the quality of the products. Bitch about price, bitch about control, bitch about the fruit logo — but quality is simply never a compelling argument. Because Apple wins.

That hasn’t changed for at least a decade, and some would argue much longer. Why is it going to change all of a sudden? Because the manufacturing and designing processes will get cheaper? Sure. For shit products.

Competitors have been trying to mimic the look and feel of Apple’s products for much of this past decade. Guess what happens? They always come up short. We’re left with a ton of products that sort of, kind of look like Apple products, but never feel right. They feel like cheap knockoffs. Which is exactly what they are.

That’s part of the reason why I think Apple’s lawsuit against Samsung is silly. Is Samsung trying to mimic Apple’s products? Of course they are. Basically everyone is. But I’ve used a handful of the products Apple names in the lawsuit. And, well, a quote comes to mind.

“Senator, I served with Jack Kennedy, I knew Jack Kennedy, Jack Kennedy was a friend of mine. Senator, you’re no Jack Kennedy.”

If Apple fired their design teams and kicked Jonathan Ive to the curb, then sure, maybe in a decade competitors would be able to mimic Apple’s current designs and build-quality at a lower price that would threaten Apple. But that’s not going to happen. At least not anytime soon. And to not even bring up that fact is a slap in the face of what Apple has done in terms of manufacturing innovation and industrial design. Believe it or not, these things are an extremely important part of what makes Apple, Apple.

And none of that speaks to the astounding success Apple has had managing their supply chains. Again, there are good reasons that competitors aren’t able to copy Apple so easily. Under COO Tim Cook, Apple today is perhaps the most well-oiled machine the tech industry has never seen.

And there’s more.

In his WWDC keynote a few weeks ago, Steve Jobs said the following. “You know, if the hardware is the brain and the sinew of our products, the software in them is their soul.”

Obviously, he said this because WWDC this year was entirely about software with the unveilings of OS X Lion, iOS 5, and iCloud. But he also said for a much more important reason: Apple actually believes this.

Even though they make the vast majority of their money from selling hardware, without software, their great-looking machines would be absolutely worthless. Sure, you could jerry-rig them to run Windows, but then they would just be really expensive PCs. Apple doesn’t sell only hardware or only software — they sell the entire package. They sell the experience.

This is what the vast majority of their competitors do not understand. By outsourcing their “souls”, as it were, to Microsoft for PCs or to Google for phones, they can never do what Apple does.

One big exception may be HP. Despite their denials that they’re in the process of transforming their own business to be more like Apple’s, they are well, transforming their business to be more like Apple’s. With webOS now in place, they control the software (at least outside of PCs for now — but soon those too) and the hardware (not Apple-level yet, but you can be sure they’re working on it). Will that transformation work? Maybe. Maybe not. But give them credit for trying. At the very least, they seem to get it.

So when Lohr and Cusumano suggest that Apple may one day survive as a company that relies on software like iCloud to milk money-making opportunities out of things like advertising and marketing, you have to laugh. If anything, more companies are going to attempt to alter their models to be more like Apple’s, instead of the other way around.

Apple will remain in a position of power for the foreseeable future because they have nailed that model. And it is not nearly as easily assailable as the NYT piece suggests.

At the same time, Apple will continue to innovate, and yes, transform themselves. Most of their revenues now come from phones. Ten years ago, that was unthinkable. In another ten years, most of their revenue could come from tablet computers. Or maybe something else no one is thinking about right now.

Apple certainly won’t be becoming a “software and services” company anytime soon. They follow the “SaaS” model — that is, “Software as a Soul”. As in, the software cannot be decoupled from the hardware. They tried that once before. It was a disaster. It led to the near-collapse and subsequently, the complete reinvention that we’re seeing now.

They won’t have to “pull an IBM” because they’re already doing it one better.

[photo: flickr/confidentjohn]

Onswipe Wants To Make Slate, Forbes And Your Website Feel Like A Native Tablet App

Posted: 20 Jun 2011 08:11 PM PDT

Onswipe, the publishing platform that allows any content site to create an app like experience on the iPad and other tablets, is coming out of beta this week and will be available to the public tomorrow at 3:00pm EST. With the launch Onswipe will also be adding former CNN president John Klein as an advisor.

Launching with partners like Hearst’s Marie Claire, Slate, Ziff Davis’ Geek.com and Extreme Tech, Thomson Reuter’s PE Hub, Forbes, Hollywood.com, StockTwits and advertisers American Express and Sprint, Onswipe promises clients touch device optimization in three minutes. All publishers and advertisers need to do to achieve a native app feel is pick and customize a layout, import content and then embed a piece of javascript into their site.

With tomorrow’s launch, Onswipe will be unveiling its three pronged approach to tablet content viewing 1) Its publishing platform that lets publishers provide a fluid tablet-like experience to users. 2) An interactive ad platform that lets clients make money off of tablet-specific advertising and the Onswipe ad network. 3) A social platform that allows users to share and save content for later.

Says co-founder Jason Baptiste on the motivation behind the startup’s tablet-centric approach this early on, “The tablet is the TV of this generation, and we’re letting publishers make their content look great on there, but also make money off of it. And lastly we’re saying, ‘Hey, if we have this new network of sites, how can we leverage that?’

Onswipe’s platform will allow publishers and advertisers to not only to add and customize content from article, but also from social media sources like Twitter, YouTube, Quora, Instagram, and Tumblr. In addition the launch will feature the addition of myOnswipe, an Instapaper-like offline reading service for sites in the Onswipe network.

Baptiste tells me that Onswipe doesn’t charge companies for its publishing platform, and instead monetizes by taking a share of revenue from its ad platform, “We’ve already let publishers make more on the tablet than they have before.  It’s a significant amount,” says Baptiste.

Onswipe currently has $6 million in funding from Spark CapitalLightbankYuri MilnerLerer VenturesSV AngelBetaworksMorado VenturesENIAC VenturesThrive Capital and assorted angels.

Like+1 Turns Facebook Likes Into Google +1s

Posted: 20 Jun 2011 04:30 PM PDT

As what exactly the Google +1 Button does continues to mystify some users, security researcher Ashkan Soltani and Brian Kennish, former Googler and the mind behind Facebook Disconnect, have decided to kill two buttons with one browser extension, creating  Like +1.

Unlike the +Like extension, which allowed you to Facebook Like Google search results, Like +1 turns all offsite Like Buttons into hybrid Like+1 Buttons, allowing you to consolidate some of your social button clicking behavior into one click, so you can simultaneously +1 something while you also Like it.

In addition to saving you the exertion of clicking two different buttons and letting you view your Facebook Liking behavior on your Google profile, the extension saves all your Like+1 activity locally. So if you ever want to export a Facebook independent record of your Liking, or +1ing you’re good.

Like +1, compatible with Chrome, Firefox, IE and Safari courtesy of WebMynd, is great news for people who are suffering from button fatigue. Now you’ll only have to do 50% of the work and actually get to see the fruits of your labor in your Facebook feed.

“The web has too many buttons,” Kennish says. Yeah, just look at the top of this post.

Dropbox Security Bug Made Passwords Optional For Four Hours

Posted: 20 Jun 2011 04:18 PM PDT

This morning a post on Pastebin outlined a serious security issue that was spotted at Dropbox: for a brief period of time, the service allowed users to log into accounts using any password. In other words, you could log into someone’s account simply by typing in their email address. Given that many people entrust Dropbox with important data (one of the service’s selling points is its security), that’s a really big deal.

We’ve now confirmed with Dropbox that the service did have this issue yesterday — Dropbox says that it began after a code push at 1:54 PM PDT and was fixed at 5:46 PM PDT (they had the fix live five minutes after they discovered it). So, in total, the bug was live for around four hours.

The question now is how many people were affected. The company will be announcing that “much less than 1 percent” of users logged in during this time, and that all sessions have now been logged out as a security precaution. The team is now investigating if any accounts were improperly accessed, and says that anyone who was impacted will be notified.

Update: Here’s the company’s blog post, which just went live:

Hi Dropboxers,

Yesterday we made a code update at 1:54pm Pacific time that introduced a bug affecting our authentication mechanism. We discovered this at 5:41pm and a fix was live at 5:46pm. A very small number of users (much less than 1 percent) logged in during that period, some of whom could have logged into an account without the correct password. As a precaution, we ended all logged in sessions.

We're conducting a thorough investigation of related activity to understand whether any accounts were improperly accessed. If we identify any specific instances of unusual activity, we'll immediately notify the account owner. If you're concerned about any activity that has occurred in your account, you can contact us atsecurity@dropbox.com.

This should never have happened. We are scrutinizing our controls and we will be implementing additional safeguards to prevent this from happening again.


The issue was posted to Pastebin by Christopher Soghoian, who has previously criticized Dropbox for the company’s misleading description of its security practices (Dropbox used to claim that employees at the company had no way of viewing user files, but in reality a small number of them do have administrative privileges). Soghoian didn’t discover the password issue himself — it was relayed to him and he anonymized the email exchange.

Security scares are the last thing Dropbox needs. The company has seen very strong growth over the last year and is rumored to have a valuation that may be as high as $1.5 or 2 billion. But all of this growth is contingent on people trusting the service — the whole point is that you’re mirroring your most important and most frequently-accessed files between multiple computers. If people start worrying that their Excel spreadsheet or banking data or private IMs could be exposed, they’ll turn elsewhere.

Most people probably don’t care if Dropbox employees could conceivably access their files (after all, the same is true at Google and Facebook). But an authentication system that’s accepting the wrong password? That’s something that anyone can understand (and get scared about). I love Dropbox and have been using the service for years now, but gaping security holes like this simply aren’t acceptable — especially when there are other services that offer similar functionality. Even if nobody accessed my account (which is probably the case), the fact that this could happen is unnerving.

Here’s one of the email messages posted to Pastebin that describes the issue:

Hi Chris,

If you’re still involved in the dropbox investigation, there was an interesting development this afternoon. I found I was able to log into my account using an incorrect password, and on further investigation I found I could log in and access files on any of the three accounts I tested (mine and two friends’) using any password.

This is corroborated by the admittedly-thin dropbox tech support thread below.

So evidently they fail open when auth is busted, or sometimes they roll dev code, or….? This has me really bummed because I just “fixed” my exposure to website password theft by generating gnarly passwords with keypass and storing them on dropbox. Sigh.

And here’s a response that, according to the Pastebin post, came from Dropbox CTO Arash Ferdowsi:

Arash Ferdowsi, Jun-19 06:08 pm (PDT):

hi XXX,
there was a very brief glitch and this should never happen/be possible again. thanks for the email.

Color Me Badd

Posted: 20 Jun 2011 03:42 PM PDT

Come inside, take off your coat
I’ll make you feel at home
Now let’s pour a glass of wine
‘Cause now we’re all alone.

The opening lines of Color Me Badd’s seminal “I Wanna Sex You Up” sort of perfectly encapsulates Color — the company/photo-sharing app, not the band. After one of the most-hyped launches in recent memory, it was supposed to be the app that changed proximity-based sharing. Instead, it was an app used to share a lot of drinks, often with yourself or one other person.

Unfortunately, also like the song, it was all foreplay. No sex. And now even Color is admitting that.

In an interview with The New York Times over the weekend, Color founder Bill Nguyen essentially admits defeat — at least with regard to their eponymous first app. This follows our story from last week that co-founder Peter Pham had left the company. While we had heard conflicting stories about the exit, Nguyen doesn’t beat around the bush, telling NYT that Pham was fired.

Whether Pham was a fall guy or not doesn’t really matter. What does matter is that Color has to figure out what the hell they’re doing now. NYT suggests they know:

Mr. Nguyen outlined an ambitious plan to compete with Apple, Google and Facebook by tying together group messaging, recommendations and local search, all while making money through advertising.

If you thought the initial Color idea was crazy, this must sound absolutely insane. Talk about setting a high bar! Color will apparently release such an app later this summer. The original photo-sharing idea? That has likely been totally scrapped.

But the truth is that I’m not sure that a lot of people thought the original Color idea was all that crazy — they just ran head-first into a poor initial experience. And that was compounded by the almost comically absurd $41 million pre-launch funding round.

Fundamentally, there’s still an interesting concept there. Using the location element baked into all of our smartphones to automatically create implicit networks is something that we’re going to keep seeing startups working on. Others, like Yobongo, are already working in this space as well.

I’m still not convinced that if Color had simply launched a couple weeks earlier, at SXSW, it wouldn’t have been a hit (for that week, at least). Certainly, it would have been the perfect environment to showcase the impressive technology being utilized behind the scenes. Instead, the app ran into the problem where early-adopters were often trying it out with no one around them.

It often looked like ghost town. And because of that, that’s exactly what it became.

Imagine for a second if Foursquare hadn’t launched at SXSW a few years ago. The early-adopters would have booted it up for the first time and not seen any friends checking in around them and would have wondered what the hell the app was good for? Foursquare has since expanded the product to add a lot more value. But remember that at first, there weren’t deals or recommendations — there was just the check-in (and yes, the badges and game element related to it).

Further, while this isn’t a popular sentiment, I actually quite like Color app itself. I completely agree that the initial version had some major UI/UX issues, but the more refined version is actually pretty slick. It’s well-made. It’s fast. It’s not like these guys are a bunch of jackasses who took $41 million and built nothing. So part of me is sad that it’s already time to die.

At the same time, there’s no denying that the $41 million was jaw-dropping. But I also thought the company was being unfairly pre-judged because of that. As Nguyen tells the NYT, they took that much money because they could. He’s had success in the past when he’s had a lot of capital to work with. Had the company raised the $14 million they originally intended to, people would have buzzed, but we would not have seen the same level of backlash.

I’m just not sure how you can hold that against the entrepreneurs. An insane amount of pre-launch funding is on the investors. For whatever reason, Sequoia wanted to put in $25 million by themselves. Maybe Color shouldn’t have accepted all of it, but again, Nguyen has had success doing just that in the past. Kids don’t turn down candy. It just doesn’t happen.

So now we move into the really interesting time for Color. They’re essentially working with a gun against their head. Working on an app, mind you, that’s going to be a Facebook/Apple/Google-killer. Or something.

The mulligans are over. They’ve still (hopefully) got $35 million+ in the bank, but that won’t save them if they flop in a similar manner.

They really need to sex us up this time.

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