Jumat, 11 Maret 2011

VentureBeat

VentureBeat


Zynga prepares launch of expansion game FarmVille English Countryside

Posted: 11 Mar 2011 09:00 AM PST

In one of its most important moves as a young company, Zynga is announcing today that it will launch a follow-up expansion to its wildly successful FarmVille game, which has had huge audiences for the past 20 months but now needs a makeover.

The social gaming company is launching FarmVille English Countryside as an expansion to the original game in the coming weeks. It is the biggest single change that Zynga has made to FarmVille. If Zynga gets this right, it could return FarmVille to its glory as the game with the biggest and most profitable audience in the world.

The Facebook game is not exactly a sequel, as it uses the same Facebook application as the original FarmVille. It will allow fans to create a parallel farm alongside their existing one. But the new farm is entirely immersed in pretty English country landscapes and themes.

If there’s a big deal in this game expansion, it’s the sheep. Yes, while the original FarmVille lets you breed horses, in this game, you can breed sheep in English Countryside. You can combine sheep of different colors and you’ll never guess what the resulting color will be for the baby lamb. Todd Arnold, general manager of FarmVille, said in an interview that this is an “innovative feature” of the game. I call it a mini-game.

For most hardcore gamers, such puffery in the form of breeding sheep is what they hate about FarmVille, which drew considerable criticism as a farming simulation because it didn’t have much game play. But casual players loved it and the game hit a peak of 83 million players in March, 2010, after launching in June 2009. FarmVille is one of the most successful games in history, surpassed only by CityVille, which got as large as 100 million players. Mark Pincus, chief executive of Zynga, owes his billionaire status to the success of FarmVille.

FarmVille became the talk of the industry because it proved that traditional game companies that focused on hardcore gamers weren’t thinking big enough; it took Zynga, a scrappy startup, to have the imagination to create FarmVille and market the hell out of it to a receptive audience of older women. (And of course, the imagination started with an earlier rival game, Farm Town, and with Chinese farm games that came before that and the original farm game, Harvest Moon on the Nintendo DS).

FarmVille has been in a steady decline as Zynga focused on launching other games such as FrontierVille and CityVille. The game now has 44 million monthly active users and 14 million daily active users. The decline was so steep that writer Peter Yared insisted that Zynga had better launch FarmVille 2.

In FarmVille English Countryside, Zynga has added more story and more game play to address not the critics, Arnold said, but the feedback from fans who wanted more things to do than raise crops. At the beginning of the new expansion, the player meets the Duke, who flies in on an airship with a British flag on it. You have to repair the Duke’s airship and then his farm. Then you have to invite some Facebook friends to your bon voyage party (yes, that’s Zynga’s not-so-subtle way to make the game viral). After that, you can fly in his airship to England.

There, you can start farming your own plot with all-new crops, equipment, buildings and decorations based on an English theme. But Arnold said that the good thing about FarmVille English Countryside is that it does not force fans of the current game to start over. All of your FarmVille coins and cash, your gift box, farm size and your level of achievement can transfer over to the English Countryside game.

The missions and quests are similar to the story-based play that you can pursue in FrontierVille and CityVille. In this case, the Duke periodically shows up to give you a task to do.

Zynga has teased FarmVille English Countryside with its own fan page. The FarmVille fan page has more than 30 million “likes” on Facebook. But the English Countryside fan page already has 1.5 million “likes” without any promotion.

Arnold thinks the new game will be popular because many players needed a second farm to express themselves. The company tested a number of concepts for a theme and the English Countryside theme rated the highest.

Zynga won’t say how many of its 1,700 employees worked on the game or how long it took, as it considers that a corporate secret. The FarmVille studio in San Francisco worked on it; Manuel Bronstein Bendayan was senior director of product on the title. The team is blazing a new trail with FarmVille and it had many discussions about when to launch an expansion. Clearly, though, as users defect to CityVille, FarmVille needed its makeover.

“The initial idea was to give people a fresh start with their farm,” Arnold said. “We wanted to take it further than that, adding characters, story and more guided game play.”

But the team wanted to preserve the free form, open-ended game play that made FarmVille so popular from the beginning. Just about every week, the team adds new features to FarmVille to keep users interested, and it will do the same for the English Countryside.

And of course there was the sheep-breeding innovation. A farm hand character named Angus shows you how to do it. You can pick a ram and a ewe and then hope for the best as far as the color combination that results. You can speed the process along by offering the sheep a “love potion,” which is an opportunity for Zynga to sell you a virtual good. So far, there is no advertising built into the English Countryside expansion.

Another feature that Zynga added was a progress map that shows where you are in the different levels of the game. Now you can see exactly which friends are at the same level as you are and where you have to level up next. You can also help your friends get to the next level.

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Ngmoco’s Neil Young foresees multibillion-dollar mobile game companies

Posted: 11 Mar 2011 09:00 AM PST

Neil Young is the chief executive of Ngmoco, the mobile game publisher that was acquired by Japan’s DeNA for up to $403 million last fall. But Young says that wasn’t just the end point for his company and its success as a publisher of iPhone games. Rather, Young and his parent company are on a quest to create a multibillion-dollar mobile entertainment company. The centerpiece of that is Mobage and NG Core, two technologies that will be combined into a worldwide mobile social network. Mobage, as the social network will be known, is based on DeNA’s Japanese mobile social network and it centers around an “interest graph,” or an organization of people based on what their interests are. Ngmoco is spearheading the creation of this platform and it will launch it in the coming weeks in the U.S. on Android phones. Once it does so, we’ll learn more about whether DeNA got its money’s worth when it bought Ngmoco and whether Young’s prediction about multibillion-dollar mobile social gaming companies will come true.

VB: Can you gives us an update on Ngmoco under DeNA?

NY: Let me back up and give you the history that led to the acquisition and then talk about where we are, and where we are headed. In May, 2009, our management team at Ngmoco sat down and we contemplated what trajectory were on.

We had done that the prior year, when we made the shift from paid downloads to free-to-play games. The free-to-play business was good. As we projected where we thought business would be, one, two, or three years away, we thought about the value that we could create. We were quite happy with the trajectory the company was on. We saw we could be in the hundreds of millions of dollars in revenues.

But given the impact that the iPhone and Android were making on the market place, and the impact of tablets, we felt maybe we were missing something. Maybe there was a bigger opportunity out there. And so we sort of started looking at what our competitors were doing. In the U.S. and in the West, we didn't really see anything that made us feel like we were missing out. We felt that in the free-to-play market, we were doing a really good job. And with the Plus+ social network, we felt we were doing a good job. We had a very different approach to it where we focused only on the highest quality software. At the time, we had about 10 million registered customers and now it's closer to 20 million.

We looked at the landscape and felt like we were in a pretty good position. We had been hearing for a year that Zynga was going to come in and eat our lunch. We had survived the launch of their FarmVille and we had survived their launch of Mafia Wars. We had unique skills and knowledge.  We started looking outside of the U.S. and Western markets at companies like Tencent in China, which was succeeding with its QQ service. We also saw the success of Nexon and NHN in Korea and at the success of DeNA and Gree in Japan.

And as we looked at all of these different markets and companies, we asked ourselves what the similarity was between the conditions on the ground in those markets that enabled those companies to succeed versus the conditions on  the ground in the West. The conditions on the ground in China were fairly unique. In Korea, the market was very PC-centric. But the conditions in Japan were really similar to ours. In the early 2000s, Japan had already done what was happening in the U.S. in 2010. They had low-cost or unlimited data plans, 3G penetration, and critical levels of usability and functions. They had frictionless payment systems. That was all driving huge usage patterns.

VB: They were way ahead?

NY: Yes. They had direct carrier billing in those markets. Basically, they had the equivalent of iTunes as a default billing mechanism for online purchases. We started studying DeNA and Gree more closely and we reached the conclusion that there was an opportunity to essentially create the Western DeNA. That would require us to do another kind of investment in our company and go from being an application developer with an affiliate network to a platform company with great first-party and third-party development.

If we wanted to replicate the model that DeNA had pioneered in Japan but adapted for the Western markets, it was going to be essential for us to make a new technology frameworks. We had to create a customer aggregation framework. And we had to produce new levels of hit products. There are a lot of moving pieces to this puzzle. But when we looked to the assets that we had, we saw we had the pieces of a puzzle. We had the Plus+ network, our first-party game studios, the network of developers or affiliates we had on the Plus+ network, the physical infrastructure we built to support those things, and some internal technology. We could offer native-quality applications in Javascript by binding our native applications programming interfaces to Javascript so that you can write game logic in Javascript and move your content very quickly across different devices and device configurations. We could do that with fast iteration speeds. The analogy is that it was like editing an app rather than submitting changes to the App Store.

We felt like we had the pieces of a puzzle. So we went out and we started raising money against that vision. We talked to a lot of different financial investors and we got great interest to raise a big round that will help us fund that transition. We wanted to go off and build a multi-billion dollar company in that space, the Western DeNA. As we were doing that and putting together that financing, we sort of asked ourselves a question. Japan and Asia in general is a very big and vibrant market. But realistically, we would be able to execute that effectively.

We would have to build a successful Japanese operation that could compete with DeNA. We considered a partnership with one of these Asian companies. Maybe we could do a technology swap. Maybe we could find a strategic investor. And so we approached the players in those territories.

VB: You already knew DeNA’s management?

NY: Yes. When we met again with Tomoko Namba (CEO of DeNA, pictured right), she said we share the same vision. She said we believe that the market is going to grow the same way, and she said Ngmoco’s technology framework will help DeNA manage a transition in its local market from feature phones to smartphones.

She said DeNA hadn’t been successful in the West yet and needed to be to continue its expansion as a company. She said she could invest in Ngmoco but wanted to explore the idea of acquiring the company. Over the course of the next weeks, we came to an agreement on an acquisition. That close in November and we have been working on integrating the companies. We are working on the roadmap, technology, and business frameworks to bring Mobage-town (DeNA’s mobile social network, which will be known as Mobage in the future) to the global market with a focus on smartphones. On Dec. 15, we announced the roadmap for a Japanese release of our software development kit with a limited set of launch partners. About 40 companies from the U.S. and Japan are participating in a private beta test. We also announced our partnership with Samsung where Mobage will power Samsung’s devices. It will be preloaded on all Samsung Android devices around the world. Over time, it will evolve into a service that we are going to introduce.

So fast forward to today and in March we will open the sandbox for developers in Japan. In April we will launch the Mobage smartphone service in Japan, the Apple smartphone service in Japan. Later in the second quarter, we will release the sandbox for the rest of the world and the Mobage service for the Western markets. That’s the overview of our opportunity to build a future entertainment network.

VB: Tell us more about Mobage?

NY: You know if you, I am not how familiar you are with Mobage but it's basically got a world-class network when it comes to monetization of a social games service. And it is used by millions of people every day to play games in consumer entertainment on their on their cell phones and, to a lesser degree on, on PCs in Japan.

And it is a rough blueprint for what you can accomplish in the rest of the world, if you take the underlying concepts behind Mobage. There is an opportunity to build something that will impact this mobile generation as the way that MTV impacted rock-and-roll fans a generation ago. It can be something that is culturally relevant, something that you know isn't just linear programming. It's interactive programming that you know isn't just a solo experience but a social experience. I think the really big companies of the next decade are going to be companies that are focused on you know some of the interest graph. If Facebook’s social graph is about your friends and the location graph is about some places you know, the interest graph is about you know what, what people want to do.

Games and entertainment is a really big piece of what people want to do. And so the learning and the knowledge from DeNA's implementation in Japan, when combined with our view of the Western market, will be a perfect combination.

NG Core is a technology framework that is available to developers today. We are almost at the 1.0 version of the release of NG Core.

VB: What are some of the features? Are they things like the leaderboards, achievements, friend requests, and multiplayer challenges?

NY: No. We have all of those things. I mean to put it to perspective, the Plus+ functionality is what you described. We need on top of that the functionality to build a true social network. I mean basically you've got friends, followers, leader boards, awards and something like messaging. Match making or challenges, personalizing avatars. When you have all of those things, that’s about 10 percent of the puzzle.

You also need community services, you need gamer card (identity) functionality, the ability to get a message inside an application. For a game to have its own graph that's part of a larger graph, a virtual graph versus a real graph, we think that is a really important piece of this puzzle. That allows you to meet new friends based on who you meet inside the interest group, or inside the game. Then you also have to have bank currency management, virtual goods, provisioning systems.

VB: You can't just sort of take Plus+ and relabel it. You are actually building a bunch of stuff on top of it?

NY: On top of that yes. A lot of that is what DeNA has built with Mobage in Japan. A lot of that will be common with what we are building here. Plus+ and everything else is all being rebranded as Mobage. Some of it will work in the West. Some parts will not.

VB:     How, how key is Mobage to how well DeNA is doing?

NY: Mobage is perceived as and understood as the essential glue that keeps people coming back to DeNA’s games. And Mobage itself is the technology framework, but it's also a whole set of services that sit on top of the games both for communication also content delivery or commerce. There are things like celebrity blogs, which attract a lot of people and get them to use a lot of features. It’s all tied together through this kind of social entertainment network framework.

VB:     And is there an analogy for it in the west?

NY: I don't think so. The closest thing is the virtual graphs that exist in World of Warcraft, (the biggest massively multiplayer online game). It has its own economy and way for allowing you to communicate with people who have the same interests as you.

VB: So when you introduce it here, you’ll call it a social network?

NY: Yeah, it's a service. It absolutely is a social network. It is a social entertainment network.

VB:     And that then becomes the thing that everybody has described as what's missing from things like the iPhone or you know. For instance, Facebook is a social network by itself. If there was something like that on the iPhone itself, then the amount of activity on the iPhone would go up dramatically.

NY: Yeah, I think so. I think then there are specific implementations for specific platforms. So there are business rules and business conditions that exist in iOS (Apple’s operating system). There are different business rules and conditions that exist on Android and then still other rules on other mobile devices and different rules again on the web.

And so you know ultimately when we are trying to build this type of network, we need to be device agnostic and operating system agnostic to some degree. I think really about humans you know at the end of the day, our customers are humans and so we have to be able to get service into the hands of humans. But we have to start with the platforms.

VB:     And can you implement Mobage fully on the iOS, or can you only do that on Android?

NY: Android is probably the place that we can implement it fully today or I would say completely. That is, we can create one destination application that binds many of these experiences together in conjunction with individual applications that surface on the market place. Those individual apps can then invoke the functionality of that larger service application. On iOS, you still have a great experience but your experience is a little less integrated. You can have the individual applications, the actual games. They are the fuel for the ecosystem on the iOS. To realize the full potential there, we need to think about user-centric services versus distribution point centric services.

So we need to figure out how to you know connect customers together, so that they feel like they are part of a really rich and vibrant ecosystem that they are committed to coming back to. And we have been able to do that in individual games, to build communities within games that persist over time. Then the next step is to build communities in services over time where they actually feel an affinity to the service and affinity to others inside the service.

VB: How would you make money from this?

NY: There is a couple of ways. The first is from our own first party products, our own games. The second is by sharing revenue with the developers that participate inside the network. Then lastly we can make money on advertising. Those are the basic mechanisms to monetize that framework in that platform.

VB: And will you charge a 30 percent fee for developers participating in your network, as Facebook and Apple do on their platforms?

NY: I can tell you we are in the first year going to focus on putting together frameworks that will incentivize people to come to the platform. We want them to deliver their intellectual property (games and other entertainment) on the platform and we are going to be very friendly. Developers at the end of the day need an audience and they need monetization.

And you know we think that we can give them access to a big audience in a global market, a market certainly in Japan where they are not even present now. That’s already a multibillion-dollar industry. We would increase their opportunity to access customers and increase their ability to monetize their products. You know the case we have to make in a compelling way is that anything that they would be losing in revenue share they will be more than making up for in volume.

VB:     And then are there some interesting things you can do with like the analytics and recommendation services. You can help the developers and users with the discovery of content?

NY: Yeah, certainly.

VB:     So then the opportunity here is a lot like pay-per-engagement, like when a bank rewards a service that can put it in touch with someone who will be a customer for life?

NY: Absolutely. I think that's very powerful and we have the ability to improve the eCPMs (advertising revenues per number of users) from the ads because they can be a lot more effective than ordinary ads.We are poring through terabytes of data already from our clients every single month. We process that and can infer the buying habits of a customer and how they are like to come back.

And that's valuable to advertisers. Now we have to be able to protect the privacy of our customers but we think that if we are recommending the right brands or applications to our customers, that is going to be a win-win for everyone.

VB: Will you do this right out of the gate or will this develop over time?

NY: Well we are certainly offering a rich set of analytics at launch that will enable developers to understand the full performance profile of their products and we will certainly be working with our ad partners to make sure that we have the very best eCPMs. Ngmoco has been serving ads in its games now for quite a long time as in we've learned a lot about how to optimize those eCPMs.

We have also been able to produce new types of advertising units called incented ad units, which are really important to brand advertisers that want to reach our audience. We say that you can watch this video and receive free gold inside the application.

VB: Do you think you will be able to launch Mobage on iPhone at the same time you launch on Android or you have to go one first?

NY: You know we will probably be out on Android first for the integrated service. The individual application is something that could be launched on both platforms right away. I mean our goal is to not actually produce the same application on both platforms. Our goal is to quickly make use of the specific hardware that goes with each platform.

VB: Is it weird that you started as an actual iPhone shop and now, by the business path you have chosen, you have to become an Android shop?

NY: I think we are both. We have to be platform agnostic if we want to build a big company. We certainly love iOS and we love the ecosystem and we love the quality of the hardware and the quality of the customers and the quality of the payment mechanisms. There is a lot to love about iOS. I think we'd be doing our business a disservice if we ignored Android given the  momentum Android has.

VB: But can you become the Mobage of  the West on the iPhone or is there an obstacle to that?

NY: The single biggest obstacle is that we can’t build an integrated application.

VB: You said that quickly, what does that mean?

NY: In the integrated service application, you could launch Mobage, the social network, and that place would house your complete experience. Now you can come to the experience by using an individual application that is part of the overall network. You launch a game and then come to the network. You can then join the network and go directly to the network. In the case of our Samsung partnership, we have an application that is on the home page of every telephone they build on the planet and every tablet they build. It’s like a channel unto itself that leads to a great social entertainment network.

VB: Is there a difference between that and being on iOS?

NY: So the difference would be that on iOS you can't actually have that single application that houses everything because the business rules don't allow you to aggregate content together.

VB: Okay.

NY: So you have to have individual applications that run on iOS. Now that doesn’t stop you from having a really rich experience. We can still deliver a lot of the pieces. But there are limitations.

VB: So on the iOS, an app has to be an app. It can't be a portal to other things like a social network?

NY: Correct. At the end of the day, we are at the very beginning here right now. There are going to be a lot of changes that happen and we have just seen how much the changes happen around subscriptions and you know publishing content and I am sure that there will be a whole bunch of changes as the market evolves. I do trust that Apple absolutely does have the best interest of the customers at heart.

I mean that they have time and time again demonstrated to me that is actually the core of their business concerns. So I believe that as they evolve their platform they are going to invent and allow some really progressive ways of delivering content. And this is a marathon.

VB:     And you can kind of say that what you are doing is just creating a folder for applications, not a portal?

NY: Yeah that's certainly one way that you can look at it. I mean there are lots of considerations and I wouldn't want to speak for Apple. I think only Apple really understands all its considerations. But I am hopeful over time we will evolve to models that allow the delivery of channels. Like, for instance, ABC should be able to aggregate a lot of shows together and deliver a channel on the iPhone just as they deliver that on TV. If it’s a great experience for users, why not?

I don't control that. I can control what we do We share the desire of Apple and Google to deliver great experiences to customers and so we are going to focus on doing that. We trust that as the market evolves we will be able to take advantage of the platforms and their features.

VB: Is Mobage a lot like the equivalent of Xbox Live or something else?

NY: No. I think it is more like a Facebook for games and entertainment. I think there is a fundamental issue for Facebook and it sounds kind of crazy. Facebook has some limitations. You have to think on this scale of innovation if you want to take advantage of the real opportunity here. Sometimes you want an anonymous experience and select a small group of friends to share things with. If I have 1,600 friends on Facebook, I don’t want them all to know that I just did great in a game. Only the people who care about that should know.

VB:  I think I see now the connection between the broader ambition that you have and the price that DeNA paid for Ngmoco, which some people said was very high.

NY: This is very important to how you value the company. The overall ambition is very large. I think the valuation of Ngmoco was driven by a few factors. One was the NG Core technology framework. Second, we have a track record of consistently producing successful products on the iPhone platform. And third, if you are a Japanese company and you want to get a global footprint, one of the biggest challenges is getting a management team that can execute that as quickly as possible. Lastly, there is the Plus+ network which has 20 million registrations in the West. We’ve had more than 120 million installs of Plus+ products. There are 60 million friend connections. We operate a server network that keeps it altogether. And we own all of our own intellectual property. Right now, DeNA does not own much of the intellectual property on its network.

VB: The question for the mobile gaming market is how soon does its momentum catch up with the amazing momentum of companies like Zynga on Facebook? Right now, mobile games have lagged and that is why Zynga’s valuation is so much higher. How far behind is the mobile industry?

NY: In Japan you know DeNA is doing $1.3 billion in revenue with way fewer customers than Zynga. That shows you the tremendous opportunity in you know in front of us. You have the No. 1 company in mobile games and the No. 1 company in social games. On Facebook, if you are not in the top five game companies, you really don’t matter. You may be a nice lifestyle game business. But you can’t support 40 or 50 people. In that environment, it will be tough for multiple companies to get into the billions of dollars in revenues.

I think the mobile game space is different. I think ultimately mobile and mobile operating systems will be more ubiquitous than Facebook games. And I think there is going to be a much bigger market and much bigger opportunity out there so I hope that you know there will be multibillion-dollar companies in the one, two, and three spots. If you are a top ten company, you are going to have a great exciting business. How far away from that are we? I think by 2014 you know we will see you know multibillion-dollar Western mobile game companies with social game platforms. We hope to be one of them.

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After popular demand, Rdio announces an API at SXSW

Posted: 11 Mar 2011 08:30 AM PST

RdioToday at the South by Southwest Interactive festival in Austin, Texas, Rdio, the unlimited, on-demand social music service, introduced its API to the public.

The API gives developers the ability to create web applications that can search, access and play all of the artists, songs, albums, playlists, and top charts in Rdio's catalog.

Developers who are looking for a way to incorporate music into their applications can now do so through Rdio's API, and will be able to monetize their applications through Rdio’s affiliate program which pays commissions for referring new subscribers.

Rdio, which was founded by a co-founder of Skype, is a music service that lets subscribers listen to as many songs as they want and share new music with friends. The service offers a $4.99 monthly subscription for unlimited listening through your web browser, and a $9.99 plan that includes mobile music streaming and synchronizing. Rdio subscribers build and share their online music collections from a catalog of over 8 million songs and can look at the listening activity and playlists of other users.

Todd Berman, VP of Engineering at Rdio, says, "Ever since our launch six months ago our API has been our most requested feature. Developers who have been looking for a way to integrate music into their web applications now have a way to do it easily, legally and accessibly."

Rdio's API is currently being used by AOL (for its newly launched “Play by AOL” application), Grab.com and Tweetlouder.

The company, which was founded by Skype co-founder Janus Friis, is headquartered in San Francisco. Rdio is funded by Atomico and Janus Friis, through his investment entities Mangrove Capital Partners and Skype.

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Apple may sell 600K iPad 2s at launch, online orders face huge delays

Posted: 11 Mar 2011 08:17 AM PST

Apple may sell 600,000 iPad 2s this weekend, Bloomberg reports based on information from several analysts.

The original iPad sold 300,000 units in 24 hours, but analysts seem to agree that the iPad 2 will blow those numbers out of the water. Gleacher analyst Brian Marshall expects Apple to sell over 500,000 iPad 2s this weekend, while Tim Bajarin, a Creative Strategies analyst, expects Apple to hit that figure in the iPad 2's first two days.

Analysts point to the iPad 2's wider availability as a major reason for the increased sales. The tablet will be available today at AT&T, Verizon, Wal-Mart and Target stores. Altogether, more than 10,000 stores will offer the tablet, including 236 Apple stores. Last year, Apple had only 221 Apple stores and 1,100 other stores to push the original iPad at launch.

But it also looks like Apple may be paying the price for rushing out the tablet to consumers so early. Customers who now order the iPad 2 online will have to wait weeks for it to ship. Typically,  Apple lets consumers preorder its new devices weeks in advance and has enough stock to deliver them on their release day. But the iPad 2 was clearly a rushed affair — Apple only announced it last week, and online orders just opened early this morning (4 a.m. Eastern, 1 a.m. Pacific).

Early online orders saw a shipment date of two to three days, and that was quickly increased to a wait of up to a week, AppleInsider reports. Apple is also limiting online purchases to two iPads per person, just like it did last year.

So if you want an iPad 2 without waiting several weeks, you better get yourself to an Apple Store right now. Apple will begin selling the iPad 2 in stores at 5 p.m. this afternoon.

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Disqus CEO not worried about Facebook comment threat

Posted: 11 Mar 2011 07:43 AM PST

DisqusDespite the clear competition from Facebook’s new commenting service, commenting company Disqus’s co-founder and CEO Daniel Ha says he is not concerned about Facebook's foray into the field, according to PeHub.

On March 1st Facebook introduced its commenting plug-in. TechCrunch, GigaOm, the Daily Beast, and other notable websites replaced the popular Disqus commenting service with this plug-in to test out the new service.

Ha told PeHub, "We think of Facebook as a competent competitor. They've put a stake in the ground – they see a lot of value in what we do. But we haven't seen [Facebook] make a dent in our traction, which is why we aren't shaking in our boots."

Facebook's commenting plug-in does not allow users to comment anonymously because every comment is connected to a Facebook profile. If a user is already logged into a Facebook account, they won't need to go through any authentication options, and all comments written are also posted to a user's Facebook wall, except when this is asked not to occur.

In 2010, Disqus grew its traffic from users and the number of publishers using its platform by 500 to 600 percent. Disqus is also the commenting platform for more than 700,000 websites, including CNN,  Fox News and this very site. Ironically, since Facebook's comment launch, Ha says that he has seen 30 to 40 percent growth in daily installs.

Disqus is a four-year-old, 20-person startup, that is headquartered in San Francisco. The company has raised $4.5 million from investors including Y Combinator and Union Square Ventures.

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Have the location-based patent wars begun?

Posted: 11 Mar 2011 07:33 AM PST

Popular location-based check-in application Foursqaure was slapped with a lawsuit today for supposedly infringing on a patent from little known company Mobile Commerce Framework, as first reported by TechCrunch.

The lawsuit was filed yesterday by Mobile Commerce Framework’s legal representation Jonathan Hangartner in the Southern District of California and is claiming financial damages as well as the withdrawal of all products by Foursquare to be impounded or destroyed.

The claim is that Foursquare’s application infringes the patent by allowing users to search and find information on merchants by location or merchant type. A very broad statement, which most patents tend to follow and could be applied to many of the applications available today.

Don’t think that Foursquare is going to be shutting down anytime soon, the company itself may own its own patents that could be used in defense, including one that cofounder Dennis Crowley owns from his days at Dodgeball titled "Location-based social software for mobile devices."

Other services dealing in location-based services also have unique patents, including Facebook Places, which could be used in defense called "Systems and methods for automatically locating Web-based social network members” filed in 2007.

The lawsuit may be the first of many to come to Foursquare by a variety of companies. Unfortunately, it appears that Mobile Commerce Framework isn’t an active participant in the location-based services space defending one of their products, but rather just looking for a quick buck from a company that appears to be doing the best in the space. Why do we think this? Well, the company doesn’t even have a website or any other real information available.

Hopefully, the location-based patent wars haven’t begun and the space can continue to grow. We’ve emailed Foursquare CEO Dennis Crowley for comment, and will update when we hear back.

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Japan’s 8.9 quake puts cloud data at risk, stresses mobile services

Posted: 11 Mar 2011 07:20 AM PST

As Japan got hit by the double whammy of an 8.9-magnitude earthquake and the subsequent tsunami, the disaster’s effect on technology came into play, endangering cloud computing and mobile services.

The quake hit in the Pacific ocean about 231 miles north of Tokyo around mid-day local time, according to the U.S. Geological Survey, which can pinpoint quakes in a very short time. News reports show that mobile services are working in Tokyo but are under stress. The mobile systems in particular aren’t built to handle the kind of huge communications rush that happens in the wake of a disaster, as calls from worried people and emergency services requests tend to overwhelm network capacity.

Many tech companies are setting up cloud computing services in Tokyo. Japan’s NTT Communications has lost a lot of its internet voice data, using IP-VPN technology. It is evaluating the building holding its data center. Amazon Web Services, which just opened a data center in Tokyo, said that its services are available. Salesforce.com said that its Japan and Asia Pacific services are up. ZDNet Japan has more info on the impact on data centers.

Citizen journalists are posting video of the quake on the CitizenTube channel on YouTube.

Meanwhile, Google Person Finder is available to help people get information about loved ones. The waves from the quake are expected to hit the west coast of the U.S. at 8 am Pacific time. The tsunami did not cause major damage in Hawaii. [photo credit: ebtokyo flickr]

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One lone dude awaits iPad 2 at Apple’s SXSW store

Posted: 11 Mar 2011 07:06 AM PST

Apple likely expected a bigger crowd forming at its South by Southwest 2011 popup store in downtown Austin today.

As of 8AM Central this morning, only one man stood faithfully in line for the iPad 2: “Sweet” John Muehlbauer, an event planner at Austin-based Revolving Events. According to his Twitter feed, he’s been waiting in line by himself since 6:30AM Central.

VentureBeat executive editor Owen Thomas spoke to Muehlbauer this morning: “Honestly, I thought there would be more people here,” he said. “But now I’m committed.” The Apple popup store, which was put together to attract attendees of the South by Southwest Interactive festival running today and tomorrow, will open at 5PM Central.

Plans for the store came together quickly this week, according to the Austin-American Statesman. An Apple representative contacted an Austin real estate firm on Monday to confirm the location. Apple already has permanent stores in Southwest and North Austin, but not in Downtown Austin.

Of course, Muehlbauer won’t be the only person waiting in line for long. But you can bet the technology press will be paying keen attention to lines for the iPad 2, since huge crowds didn’t appear for the Verizon iPhone’s launch.

Update: Muehlbauer tells us that three other people have joined him in line.

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How the Angry Birds deal could lead to mobile gaming nirvana

Posted: 11 Mar 2011 07:00 AM PST

The $42 million investment in Angry Birds creator Rovio could be a watershed event for mobile games.

The deal shows that at least one mobile game company is able to attract marquee investors and a valuation (as yet still unknown but undoubtedly big) that social game companies attracted in their run-up to the big time. At some point, the industry will flip, with Facebook becoming the smaller part and mobile becoming the bigger part, since the number of mobile phone users is something like five times the number of Facebook users.

In mobile gaming, upstart companies will battle with established giants to become multibillion-dollar mobile game companies. This may sound like they’re smoking crack. But bullish observers believe the battle has begun and will play out over the next couple of years. Neil Young, chief executive of Ngmoco, said last week in an interview that he believes multibillion-dollar companies will be created in this market in the next couple of years. Rovio itself is perhaps the most bullish of all, since it is closing in on 100 million users.

Besides Rovio, the contenders include Electronic Arts, Zynga, and DeNa, which fired the first shot across the bow when it bought Ngmoco last summer for up to $403 million. Others are moving into the game. Marc Andreessen’s venture firm invested $18 million in mobile game publisher TinyCo just a week ago. Digital Chocolate, an established maker of cell phone and social games, raised $12 million earlier this week. Pocket Games raised $5 million from Sequoia Capital in December. There are lots of chess pieces in motion.

“We were approached by a lot of people and talked to a lot of investors,” said Peter Vesterbacka (pictured top left), the Mighty Eagle at Rovio, responsible for business development. “We were in a good position because we didn’t need the money. The money was not the key thing here. It was more about getting the right people involved. We wanted people who bought into our bigger vision. A lot of people don’t see beyond an iPhone game. What we are trying to do is build an entertainment franchise. We believe we can build this into a multibillion-dollar ecosystem.”

Rovio’s investors include Atomico Ventures, the venture fund created by Skype co-founder Niklas Zennstrom; Accel Partners, the veteran VC firm that invested in Facebook; and super angel fund Felicis Ventures, headed by Aydin Senkat. They slowly came around to a meeting of the minds with Rovio.

Rich Wong, a partner at Accel, said he had known Vesterbacka, who joined Rovio in the spring of 2010 and was a former HP manager, for a long time. Wong caught up with Vesterbacka, who formerly worked at Hewlett-Packard, at our MobileBeat conference last July, about the time when Rovio was starting to go public with all of its success with Angry Birds. Vesterbacka also met Senkat at MobileBeat.

They started a conversation and began the slow process of earning trust, Wong said. Rovio was an eight-year-old company that had worked on 51 games before Angry Birds. That helped Wong and his partners get over any fear that investing in a game company could be a highly risky thing, since there were no guarantees that a game company could be more than a one-hit wonder. Such fears had stymied VC investments in games for many years until recently. Rovio had a team of veterans in place in Finland.

Originally called Relude, Rovio began as a mobile game firm started in 2003 by three students from the Helsinki University of Technology: Niklas Hed, Jarno Vakevainen and Kim Dikert. They had participated in a mobile game competition sponsored by Nokia and Hewlett-Packard. Vesterbacka, then at HP, was one of the judges, and he suggested the trio start their own mobile game company. They did so and got Digital Chocolate to publish the game, King of the Cabbage World, on cell phones. They started doing work-for-hire games such as Need for Speed Carbon for Electronic Arts. Mikael Hed (pictured top right) joined them as CEO in early 2009 and steered them toward making internally produced games they could own. They hired subcontractors to do their work-for-hire jobs so they could free a team to focus on new iPhone games.

They wanted to exploit the iPhone’s hardware, such as its touchscreen, and create memorable characters. They conceived Angry Birds — where the player would slingshot birds with bushy eyebrows at green pigs in fortresses — and targeted at everyone. They focused on every detail and wanted to get the slingshot game mechanic just right. They paid attention to details, such as the animations of the birds crashing into the pig fortresses and the laughter of the pigs whenever you failed to demolish them.

They launched the game on the iPhone in December, 2009, via Chillingo, a mobile game publisher. It caught on in Finland first and then became a hit in Sweden. It hit No. 1 on the App Store in the United Kingdom and then made its way to the top of the charts in the U.S. The title spread through social media and Apple featured it in the App Store. People began tweeting about Angry Birds every minute.

Vesterbacka talked to Mikael Hed about joining Rovio and said he would only do it if the company was committed to making Angry Birds into something huge. They all agreed on the larger vision. Jim Breyer, the Accel partner who helped land Facebook in the venture firm’s portfolio, knows a lot about betting big. He told the Rovio leaders about his experience on the Marvel board of directors. Marvel grew up as a comic book company, became huge with movies, and then took creative control of its own properties by bringing movie production in-house. It pretty much came to own everything.

That’s what Breyer suggested for Rovio. Vesterbacka said that advice was useful and that the company is now thinking seriously about how to build itself up so that it can retain more creative control and not dilute the brand with small-time efforts.

“Like the Marvel experience, you have to do a lot of stuff yourself,” Vesterbacka said. “We realize we have to do that. There are a lot of things that we just can’t outsource to others. Niklas Zennstrom also immediately got the vision of what we wanted to do, as did Aydin.”

The potential for Angry Birds reminded Wong of the star of his Santa Rosa, Calif. hometown, Charles M. Schulz, the creator of the Peanuts comic strip, which ran in newspapers from the 1950s to 2000. Wong went to an ice rink that Schulz owned and the museum in his honor as well (Schulz died in 2000). Peanuts became a multigenerational brand. Angry Birds has a way to go before that happens. But about 40 million Angry Birds fans play the game each month. And roughly 200 million hours are spent with the game each day.

It became clear to everyone, including Accel, that Angry Birds was growing into a cultural phenomenon. As you can see from this Google Trends chart, the awareness of Angry Birds began to surpass Bejeweled in October, and by November it blew past FarmVille, which at the time was the most popular game on Facebook. Google Trends show how many people are searching for a term and is a good measure of the changing awareness of a subject.

“Could Angry Birds become the Peanuts of this generation?” Wong said. “My mother-in-law plays it. It absolutely can. In the past decade, I can’t think of anything except Twitter that has become so popular so quickly.”

Vesterbacka said in interviews that Rovio’s plan was to treat the game as a franchise, similar to the way that Nintendo treated Mario or the way that Disney handled Mickey Mouse. The company made plush toys with the Angry Birds characters and started talks about TV shows or a movie. Then it came up with Angry Birds Seasons, a free game that had constant updates based on seasons or holidays. And it announced that it would create Angry Birds Rio, a new game connected to the upcoming Rio animated film being released April 15. The relationship with Twentieth Century Fox enabled a cameo appearance by the Angry Birds characters in a Super Bowl commercial.

“Our main goal is we want to make Angry Birds part of pop culture,” Vesterbacka said. “We have come a long way toward that goal. Once we do that, the money and other opportunities will follow. We don’t optimize for short-term profits.”

The more successful Angry Birds has become, the more it has generated solid revenues and profits for Rovio. And the less it has needed venture capital money.

“Whether we should do the deal was no longer a question,” Wong said. “Convincing them was the hard part.”

Rovio also talked to the established game companies in the video game market. But Vesterbacka said, “We didn’t meet with any company that we felt could make us move faster toward our goal.”

As Rovio moved to new platforms, it began dealing closely with the portfolio companies of Accel. On Android, Rovio launched an exclusive on GetJar, the independent app store and one of Accel’s investments. It also had to rely on advertising through Google’s AdMob division, which was also an Accel investment before Google acquired it. Accel was clearly in-the-know when it came to mobile investments and how to craft multi-platform strategies. After months of talks, everyone finally agreed to do the investment.

“Every VC says they add value,” Wong said. “But this was a good combination.”

Rovio will use the money to grow to 100 or 200 people this year. The company will create a presence on Facebook, but that will be part of a larger web strategy that includes a stand-alone Angry Birds web site. Rovio may create games around spin-off characters, such as the green pigs or the Mighty Eagle. Rovio is going to milk it until Angry Birds are everywhere — or we all get sick of it and move on to something else.

And at some point in the distant future, Rovio may get back to creating original titles beyond Angry Birds. That’s the only way to create something that could be bigger than Angry Birds.

Disclosure: Felicis Ventures is an investor in VentureBeat.

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Weekend warriors discover the pivot

Posted: 11 Mar 2011 06:00 AM PST

Sometimes, you learn that your company needs to pivot not by looking at the books, but by listening to your customer. Bill Gross, founder of Idealab, tells how he learned this lesson in this Entrepreneur Thought Leader Lecture, given at Stanford University.

Before Idealab, Gross started Knowledge Adventure, an educational software company. Employees once served as a “weekend warriors” demonstrating products in retail outlets, where they learned the hard way that they weren’t targeting properly. With the pivot came success.

(Can’t see the video? Click here.)

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Moolah Media adds phone reports to its mobile ads

Posted: 11 Mar 2011 06:00 AM PST

moolah media phoneWhen mobile ad network Moolah Media came out of stealth mode in December, it placed a big emphasis on its pay-per-performance model, where advertisers pay for actions rather than impressions. The San Francisco startup is taking that model even further today with real-time call reporting.

Phone calls are an obvious ways to track the success of a mobile ad — if the consumer sees an ad on their phone for a product or a service they like, it's easy for them to just call that number right away. In fact, the company says its ads are already generating 250,000 paid leads in the form of phone calls each month.

Now, Moolah Media is working with call center partners to track data about those calls, including duration, duplicate calls vs. unique calls, and call answer rates.

Of course, this isn't the only call tracking system out there, but chief executive Shawn Scheuer outlined some of the differences for me via email:

The difference is that this is fully integrated into a platform specifically designed for mobile advertising – not a stand alone phone call tracking system that is being used by mobile as an afterthought. There is a lot more than just tracking calls going on, and it includes optimization. For example, we show click-to-call offers to iPhone users, but don't show click-to-call offers when someone visits from an ipad or ipod touch (because they can not make calls). Instead, they are given simple forms to complete.

In addition, many offers have multiple aspects to them. They may payout something for completing a form on the first page, and then payout more for proceeding to a click to call offer. By having the system in house and fully integrated, we can create and track these campaigns easily.

There's a cost difference too. If an advertiser uses a separate call tracking service like RingRevenue, Scheuer said it costs 4 to 5 cents per minute, which can end up eating 20 to 25 percent of the revenue from an advertising campaign.

Moolah Media is self-funded.
Moolah Media Call Report

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Online game firm Gazillion names former Cryptic chief as new CEO

Posted: 11 Mar 2011 03:00 AM PST

There’s a new gazillionaire in town. Online gaming firm Gazillion Entertainment has hired John Needham, former head of Cryptic Studios, as its new chief executive as the company enters a new stage of its development of massively multiplayer online games.

San Mateo, Calif.-based Gazillion is one of the highest-profile video game start-ups since it has raised a lot of money ($60 million in its last round alone) and it has multiple studios making some very ambitious games. Under Needham, the company will complete its shift to a new business model in recognition of a major shift in the way consumers play online games. That’s a wrenching change, but it’s a necessary one in the face of the disruption happening in the industry.

Needham said in an interview that the company is in the process of converting all of its major games to the free-to-play business model, where users start playing a game for free and pay real money for virtual goods such as decorations or better weapons. That model took off first in Asia and is now sweeping through everything from iPhone games to massively multiplayer online games such as the high-quality games that Gazillion makes.

“Free-to-play is gaining a foothold here,” Needham (pictured) said. “That is where the secret sauce is for the industry.”

Needham has been a leader in games since 2001, when he became senior vice president of business development and operations at Sony Online Entertainment. He left Sony in 2008 to become chief executive of Cryptic Studios, an MMO publisher in Los Gatos, Calif. There, he helped publish the Champions Online game, which wasn’t a big success at first but did better after its shift to free-to-play games. He sold the company to Atari and led the launch of the company’s Star Trek Online game, which had mixed results but which Needham says was profitable.

At Gazillion, Needham will have his hands full because the company is one of the most ambitious in the game business, with three major studios focusing on high-quality online games. David Brevik, a former Blizzard executive, became No. 2 at Gazillion in January and Needham says he looks forward to working with him. Gazillion has more than 200 employees.

Rob Hutter, former CEO and now chairman, said he welcomes Needham to the new job. Under Hutter, the company has gone through some twists and turns, acquiring studios and shutting one down. Gazillion’s first studio was Slipgate Ironworks, an MMO developer founded by Doom co-creator John Romero. But Gazillion shuttered the game and laid off its staff. Romero left to run his own Facebook games studio, Loot Drop.

The company’s NetDevil studio in Louisville, Colo., also worked on a work-for-hire game for Lego, dubbed Lego Universe. After Lego Universe launched, NetDevil laid off some of the team and then transferred the remaining workers to Lego, which assumed responsibility for maintaining it. The remaining team at NetDevil is working on Fortune Online, a real-time strategy game for the web.

Another Gazillion studio, Seattle-based Amazing Society, is working on Marvel Super Hero Squad. That kid-focused online game is expected to launch in the coming months in conjunction with a show on the Cartoon Network. And the last studio is Secret Identity Studios in San Mateo, Calif., which is working on Marvel Universe, an MMO based on Marvel Comics characters.

Investors include Oak Investment Partners, Hearst Interactive Media, Revolution Ventures, Pelion Venture Partners, Founders Fund, Abu Dhabi Media Company and Temasak Holdings.

Rivals include Bigpoint, Riot Games and a variety of other online game companies.

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Instapaper 3.0 for iPhone/iPad brings social features, biggest update yet

Posted: 10 Mar 2011 09:23 PM PST

It’s Christmas time for Instapaper fanatics: Developer Marco Arment has finally delivered Instapaper 3.0 for the iPhone and iPad, bringing with it new social features, sharing options, and more.

For those not familiar with the insanely useful service, Instapaper lets you easily save articles on the web to read later. Saved articles appear in a minimal format that strips out unnecessary distractions like ads. You can read the saved pieces on Instapaper’s website, and Arment has also crafted iPhone and iPad apps to gain access to the service on the go.

The apps have turned Instapaper into something more than just a nifty Delicious alternative. Now, Instapaper is without a doubt a critical tool for anyone that loves to read content on the web (if you're reading this post, that probably means you).

With version 3.0, the single biggest update the service has ever seen, Arment has made Instapaper a less antisocial affair. You can follow friends and view stories they've Liked (which replaces the previous Stars feature used to mark interesting stories), as well as share stories you've Liked.

The service also has improved connections with Facebook, Twitter, Tumblr, Pinboard and Evernote to share articles. You can even share articles when offline — which will get queued and eventually posted when you have a network connection.

Arment also included some more ways to find interesting stories: a new Editors section highlights some of the best articles on the web from sites like Longreads, and an improved built-in web browser lets you manually navigate to any site and save it to your Instapaper account. He also removed a feature from the app that let you automatically add RSS feeds to your Instapaper account. The feature was never widely used, Arment said, and its removal has sped up the app significantly.

Other new features include a faster storage engine for stories, "perfect image quality", and the ability to search the content of articles downloaded to your iPhone or iPad. Eventually, Arment says, he'll consider adding the ability to search your online archive of Instapaper stories.

The update is the first we've seen from Arment after he left his CTO post at Tumblr to work on Instapaper full time in September last year. Version 3.0 marks a turning point for Instapaper — now it feels like less of a hobby and more like a serious attempt to change the way we read online content. With Yahoo getting ready to kill Delicious, and competitor Read It Later lagging behind in features, the door is wide open for Arment to make Instapaper the only tool users need for saving stories.

Instapaper 3.0 is currently available on the iTunes Store for $4.99 for new users. It's a universal binary, which means you'll only need to buy it once to use it on your iPhone and iPad. Current owners of the app will be able to upgrade for free.

Mobile App SpotlightCalling all developers: We want to write up your app for VentureBeat's Mobile App Spotlight! If you have an innovative mobile app that hasn't been featured on VentureBeat yet, submit it for consideration right away. The Mobile App Spotlight is sponsored by The Intel AppUp developer program.

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Do AOL’s layoffs spell doom for quality journalism?

Posted: 10 Mar 2011 04:33 PM PST

tim-armstrong-arianna-huffingtonAOL eliminated approximately 900 jobs today, including 200 US employees in the media and tech group and 700 people in India.

In a company memo that has leaked out to a number of news organizations, chief executive Tim Armstrong tries to paint the move as a positive and necessary step towards turning the company around, saying it will "significantly improve AOL's ability to focus on growth." And despite the layoffs, Armstrong said AOL will be a "net importer of journalists." (Translation: We’re hiring more than we’re firing.) The layoffs also seem a little less severe than the 400 to 500 US layoffs that were reported yesterday.

Still, there are reasons to be skeptical. It's not just how many people got laid off but who. AOL's own senior vice president of news Jonathan Dube posted on Twitter that the layoffs included "dozens of the most talented journalists & product folks I know." Wired's Sam Gustin, himself a former AOL employee, described it as a "bloodbath" and said the cuts included a number of veteran journalists, including PoliticsDaily's Editor in Chief Melinda Henneberger.

Why would AOL target some of its most experienced writers and editors while it's also hiring new people? Most likely because experience is expensive. It's cheaper to bring on young writers who ask for less money, are willing to crank out lots of blog posts, and will go along with AOL's aggressive new traffic strategy called "the AOL Way." (When Engadget Editor Paul J. Miller left the AOL-owned gadget blog last month, he pointed to the AOL Way as evidence that the company "has its heart in the wrong place.")

Former AOL employees aren't the only ones with doubts about what Armstrong claims is an "enhanced focus on quality journalism." New York Times Executive Editor Bill Keller published a column today called "All the Aggregation That's Fit to Aggregate". While it was almost certainly written before the layoffs were announced, it's still relevant. Keller takes aim at The Huffington Post, which AOL recently acquired, and which will take a prominent role in the company's editorial structure. Keller's arguments are pretty familiar, but they're stated eloquently and amusingly:

"Aggregation" can mean smart people sharing their reading lists, plugging one another into the bounty of the information universe. It kind of describes what I do as an editor. But too often it amounts to taking words written by other people, packaging them on your own Web site and harvesting revenue that might otherwise be directed to the originators of the material. …

Last month, when AOL bought The Huffington Post for $315 million, it was portrayed as a sign that AOL is moving into the business of creating stuff — what we used to call writing or reporting or journalism but we now call "content." Buying an aggregator and calling it a content play is a little like a company's announcing plans to improve its cash position by hiring a counterfeiter.

Naturally, Huffington Post founder Arianna Huffington has responded.

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RadiumOne raises $21M for new ad network with a social twist

Posted: 10 Mar 2011 04:00 PM PST

RadiumOne said it has raised $21 million for a new digital ad network that leverages the social web.

That a lot of capital for an ad-based startup, but the San Francisco company believes it can deliver superior advertising performance through its patent-pending ShareGraph technology. The ShareGraph technology analyzes how users communicate with their closest connections and then identifies the specific consumers who are most likely to engage with a brand’s ads. RadiumOne says this works better than traditional behavioral targeting techniques. It also enables consumers to share ads with their friends, creating a multiplier effect for advertisers.

The company is the brainchild of Gurbaksh Chahal, founder and chief executive. He became famous as a whiz kid entrepreneur, founding two ad companies worth $340 million by the age of 25. He founded the ad network ClickAgents at age 16 and sold it in 2000 for $40 million. Then he started behavioral targeting firm BlueLithium in 2004 and sold it to Yahoo in 2007 for $300 million.

RadiumOne is a restart. Originally, the company started 18 months ago as gWallet, which sought to monetize social games through special ads known as offers. The offer business went through a crisis last fall as users felt like some of the offers were scams. The gWallet business is now a subset of RadiumOne’s business and is known as R1 Social.

Chahal sought to come into the offer market as a clean company that worked only with major advertisers and brands. The company is working with more than 200 Fortune 500 brands. But Chahal said he had always wanted to start an ad network but had been prohibited from doing so by a non-compete agreement with his previous company. That non-compete expired on Oct. 15, 2010.

Chahal said he started gWallet to learn more about the social space and it succeeded in bring more than 100 brands into the social space via the offer business. There is synergy between R1 Social and RadiumOne’s ad network business, as both share similar publishers and advertisers. And R1 Social helps ad targeting by providing anonymous user data to RadiumOne.

The company will use the round for international expansion and acquisitions. The company recently opened a United Kingdom office and will launch in continental Europe and Asia-Pacific. The company says it became profitable in the fourth quarter.

Chahal says that the goal of RadiumOne is to use social data to improve online advertising and make a measurable impact for both advertisers and consumers. The company plans to fill a void of socially-targeted advertising outside of Facebook to the open web.

The round was led by Crosslink Capital, with participation from DFJ Esprit and previous investors Adams Street Partners and Trinity ventures. That brings the total raised to $33.5 million. The company has 80 employees and plans to grow to 150 by the end of the year.

Rivals include Media6Degrees, Advertising.com, and SpecificMedia. RadiumOne says it is the only ad network that effectively leverages the social web to serve ads via ShareGraph. One of its innovations is the “R1 Like Button,” which places a button on display ads that lets consumers “like” or share the ad. That helps ads spread in a viral way and gives advertisers feedback on the kind of ads that users want to see.

Unlike friends on Facebook (where users are "connected" to people whom they may not know well), RadiumOne believes that the most significant insights into consumers can be obtained by understanding what people share with a much smaller circle of friends.

ShareGraph relies on real connections where users send or share content with each other in a tighter circle. It leverages all user activities through the whole internet, rather than just a specific social network. ShareGraph measures the strength of a connection between two users based on the type of sharing they do, how often they share, and how recently they communicated.

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