Category: Tech news

There’s currently something going on in the outskirts of the tech world that’s a bit sensitive, so no one really likes to talk about it: we (journalists, bloggers, etc) are at war with the PR industry.

That sentence alone will throw the PR flacks into a tizzy. “Hyperbole!” “Sexy statement, no substance!” “Don’t believe everything you read!” And all the other bullshit they typically spew to blunt interesting concepts into dull, gray PR-friendly dribble. We are at war.

And no, this isn’t about dumbass embargoes (though that remains a huge problem that the PR industry doesn’t seem to have any real interest in solving). This goes deeper.

The fact of the matter is that the entire PR industry is like a weed growing out of control. Current estimates have PR people now outnumbering journalists 3 to 1. Think about that for a second. And one of the industries in which this infectious growth is most apparent is the tech industry, where it’s boom time. My email inbox is a testament to this. As is my voicemail inbox. I’d bet that at least 75 percent of the messages I get in the day are from PR people. Their campaign strategy in this war is shock and awe.

Now, I don’t mean to suggest that all PR people are evil or have the wrong intentions. Many are very nice people. And some are even very good at what they do. But increasingly what they do is nothing more than attempt to spin or grossly misrepresent what it is we do. For many of them, helping journalists/bloggers/writers get access to accurate information is secondary. It’s all about controlling a narrative — by any means necessary. And that has to stop.

Case in point: Facebook.

While I like many of Facebook’s PR team on an individual basis, as a whole, they are probably the worst in the industry when it comes to manipulation, double-speak, and all around slimeballishness. And while the Burson-Marsteller debacle (you know, the failed smear campaign against Google) showcased this fact to the world, things had been bad long before that. And they’re still bad.

A couple days ago, I wrote a story about a secret Facebook project called “Project Spartan“. I gave Facebook PR the heads up over a day before I published, to see if they wanted to comment, and they declined. So I wrote the story, and immediately the PR machine goes into action.

The basis for my story was that Spartan, as seen from the perspective of developers actually working on the project and from myself (I saw everything), is clearly aimed to be step one in a maneuver against the companies currently controlling the mobile ecosystem, namely Apple and Google. Facebook has been making it very clear over the past two months to these developers that mobile Safari in iOS was the initial target. So yes, as I see it, and as the developers working on the project see it, Facebook is in the beginning phases of going after Apple. But they’re doing so as a wolf in sheep’s clothing.

Obviously, Facebook did not like this angle.

Facebook PR began emailing journalists almost immediately, trying to pitch them stories countering my story. What Facebook PR failed to realize is that the people they’re emailing are far more loyal to their own kind than to some flack. I was immediately alerted to these messages from multiple friends in the industry.

“You guys should remind people that there’s not much new in tonight’s TC story,” began one message. “You guys should” — three words that should never come out of a PR person’s mouth. Ever.

The narrative they tried to spin (all on background, naturally) was basically that Facebook CTO Bret Taylor has long been talking about the importance of HTML5 to the company. No shit. I’ve sat down and spoken with Taylor about this before. And I linked to that interview in my Spartan story. What Facebook PR conveniently did not address at all in their emails to journalists was Project Spartan or the larger ramifications — their own mobile app distribution mechanism and mobile Credits payments scheme. Those are the big elements. And both are very new.

Facebook’s email was trying to make journalists believe this was a total non-story. And yet, at the exact same time, Facebook’s developer relations team began a hunt to find out how this information got to me. How do I know? I have those emails too.

Facebook sent developers working on Spartan (“Team Spartan”) a blunt reminder that all the information about the project was confidential and not to be shared with anyone outside of the project. They also demanded that developers add a new “security feature” to their apps. In other words, a way to track who is seeing what about the project.

So my “non-story” caused Facebook to lock down Project Spartan? Makes total sense.

Meanwhile, Facebook PR shot another email out to journalists. “There’s a bunch of confusion out there right now from the TechCrunch story yesterday, especially in how this is wrongly positioning us against other companies,” is the opening line in this one. Again, the meat of the info sent is all on background — in other words, the journalists can use it, but can’t say it came from Facebook. In other words, Facebook PR are manipulative cowards.

This type of manipulation is nothing new in the industry; companies do this all the time. But that doesn’t make it any less shady. And guess what, it works!

Exhibit A: This GigaOm article from yesterday: Project Spartan isn’t anti-Apple — it’s pro-Facebook. There were four main bullet points in Facebook’s background information from their email, and that article conveniently hits on all of them.

Next, Facebook PR dispatched Bret Taylor to talk to the WSJ to once again counter the Project Spartan notion. To their credit, WSJ did not eat up the company line word-for-word. Instead, it appears they too talked to developers working on Spartan (which they erroneously call “Titan” — Facebook’s old codename for what became Messages) and got the same reaction we did, “Facebook’s underlying motivation is to position itself as an alternative development platform for programmers that now tailor mobile apps specifically for Apple’s iOS operating system or Google Inc.’s Android,” they wrote.

At least one more major publication was ready to publish similar findings about Spartan, but were dissuaded by Facebook PR at the last minute, we’re also told.

Let’s take a step back for a moment. Amid the flurry of bullshit Facebook PR is spewing, let’s just think about this from a common sense perspective.

With some 700 million users, Facebook is one of the biggest forces in the tech world today. But their glaring weakness is that they do not ultimately control their own destiny. They have flourished on the desktop-based web, which is mainly open, but mobile is the key to the future. Facebook has been doing pretty well here so far, but because they do not control the platforms they are on, things are likely to get hard for them going forward as rivalries intensify. They already have a robust rivalry with Google, the ones in control of Android. And by all accounts, the relationship with Apple is complicated to say the least. You think it’s an accident Apple went with Twitter for iOS 5 single sign-on? Please.

It’s ridiculous to argue that Facebook should not be making moves to put themselves in control of their own destiny. In other words, of course they should be working on their own mobile app distribution and payments model! They’d be stupid not to. Yet that’s the story Facebook PR is trying to spin. It’s ridiculous.

The explosion of mobile apps as controlled by Apple, Google, and the like is absolutely a threat to Facebook. Facebook is not a non-profit, they need to make money. And they know one of the key ways forward are the apps on their platform and the use of Facebook Credits in those apps. Apple, obviously has other ideas. They want users on their apps, using their in-app payment system. While Facebook having a unified app directory for mobile and the web sounds peachy keen, payments are very much on a collision course. And I’m hardly the first person to bring this up. This is a very real issue for Facebook.

So why not just admit what is painfully obvious? Why go to all this trouble to spin this elaborate tale of peace and harmony in the mobile ecosystem? “Facebook and all of our developers will choose both [HTML5 and native apps]. You want to reach as many people in as many places as possible,” Taylor tells WSJ. Ha. Okay. Tell that to the team of two that barely has the resources to create an app on one platform, let alone two or three or ten. Facebook absolutely wants HTML5 to win here because they want to be the platform that controls the mobile space. Who wouldn’t want to be in that position? It’s totally disingenuous for them to say otherwise.

So again, why not just say it? Because they’re scared shitless of Apple. That’s what this song and dance is really all about. One source familiar with the relationship between both sides compares Apple’s treatment of Facebook to an “abusive spouse”. Facebook has pissed off Apple in the past, and it has had ramifications. They have to tread lightly here.

Here’s where things get more interesting. Apple knows about Project Spartan, and is believed to even be lending some minor support to the project. Why do that for a project that ultimately hopes to usurp the native App Store and Apple payment model? Because Apple is not afraid of it at all, we’ve heard. And based on some of the HTML5-based Spartan apps I’ve seen, I have to agree. The likelihood users would choose these over a native iPhone app right now, is laughable.

So in mildly supporting Facebook’s efforts here, Apple looks benevolent and smart (while shaking their head and laughing). But I also believe Apple doesn’t know the full extent of the project. The Facebook Credits aspect, for example. Again, that’s really the key here, and I believe the main reason Facebook is pissed off about our Spartan story is this part in particular. Apple may not view Spartan as a threat at all right now — and in fact, it sort of helps them because it is moving popular games, like the ones by Zynga, off of Flash and onto HTML5 — but down the road, that is absolutely what Facebook intends it to be.

Still, perhaps Apple is that bearish on HTML5 app development. But others certainly aren’t. Not just Facebook, but many developers, including all the ones working on Spartan. They believe that HTML5 will eventually take down the native model. But perhaps Apple just has the mentality that they’ll deal with that issue when it actually becomes a problem.

We also know that Apple has been working with Facebook on their iPad app, which should finally be available in the next few weeks. Apple has wanted this app since the initial iPad launch just over a year ago. After all, the Facebook iPhone app is the most downloaded app of all time. Like it or not, it’s a selling point for the device. At first, Facebook made it sound as if they weren’t going to do one at all. But they have been working on it for months. And there’s no reason it should have taken that long, unless they were holding it back as some sort of leverage over Apple.

Leverage for what? That we’re not clear about. But recent code changes in Spartan suggest that the project could work inside of Facebook’s iPad app as well. All of this could very well be related.

That story will evolve over the coming weeks. And hopefully we’ll be the ones to bring it to you, and not Facebook PR feeding up bullshit from a cloaked hand.

The moral of the story is that Facebook PR can talk until they’re blue in the face about how their secret project now on lockdown is neither new nor interesting, but consider who is talking. I’m not going to go so far as to say they’re outright lying, but they are being extremely disingenuous and manipulative. (How do I know when Facebook PR is full of shit? Their mouths are moving.) From now on, that’s to be expected. We are at war, after all.

Anyone who was in the Valley during the late 1990s knows exactly the guy I’m about to describe. He wore blue shirts and khakis. He was a regular at the Bubble Lounge. He always insisted on grabbing the check, throwing down the dot com AmEx for everyone’s drinks, making sure everyone knew he did and later bragging about dropping “several C notes last night.”

He was a business school drop out, who thought that gave him enough cool points to negate the fact that he was lame enough to enroll in business school in the first place.

He hogged the Razor scooter at your cavernous loft-like office, was way too loud when he won at foosball, took up all the restaurant reservations and cabs in the city, drove up the rents to unsustainable levels and generally made everyone else’s life miserable. Worse: He was frequently seen as the most important person in the startup.

Thank God he left in droves once the bubble burst. Even better: He never came back.

But as happens with hot markets, there’s a new douchebag in town. We’ve written several times about how easy it is now to start a company in the Valley, and this new gold seeker isn’t the biz dev guy. He’s the knock-off wunderkind.

Paul Carr has described him as the Mark Zuckerberg tribute band: The kid who wears a hoody and tells people his company will be worth $1 billion dollars, but won’t give you any details on what they do. I’ve described him as the tribute band for the Aaron-Sorkin-fictionalized-version of Mark Zuckerberg: The kid who tries to talk fast, sound witty, but say absolutely nothing. The guy who thinks it’s fine to screw people over, because the startup journey is all about you, the almighty founder. The kid who shows up at 10:30 am for work and plays video games until late at the office, forgetting he was supposed to be building a company all day. He elevates cliched millennial entitlement to an art form.

Fashion-wise, he’s a hipster, frequently with floppy hair ala Kevin Rose and Dennis Crowley. The BMW the biz dev guy drove around has become a bike. (At least that’s a win for the environment.) And if my morning coffee run is any indication, he’s always at the Creamery talking just a bit too loudly about his company. Once I overheard two of them in a heated debate over whether or not Farmville was the most important development we’d seen in our lifetimes.

But here’s the real problem with him: Like all gold-rushing douchebags of any era, he’s not starting a company because he believes in it. You can tell because there’s no great idea there, rather it’s a collection of buzzwords and phrases like “We’re the (fill in the blank) of (fill in the blank). With badges.” And he’s happy to abandon his company if something shinier comes along. Like a wet Gremlin, he’s multiplying like crazy right now. And like all gold-rushing douchebags of any era, there are plenty of people who can’t wait until he leaves. Don’t worry, he will. They always do, and the great entrepreneurs stay and continue to build awesome stuff.

In case you don’t know the guy I’m talking about, the good people at College Humor have done a pretty good job of capturing him in this video. Embedding is disabled on it, which is — appropriately– kinda douchey.

Chris Dixon resumes his Founder Stories conversation with Eventbrite’s Kevin and Julia Hartz by asking questions about their strategy for attracting customers. Not surprisingly Facebook, Twitter and LinkedIn all factor in to the mix.

Julia Hartz says initially Eventbrite positioned itself to be “highly optimized for search engines and discovery.”  However, search eventually gave way to sharing in the form of Facebook, and now according to Julia, “Facebook is the number one driver of traffic to our site.” (It has been for a while). She notes “It’s extremely easy to get people to share what events they are going to because events are inherently social”  and continues by saying with the “ticket buyer sharing where they’re going” it drives “real traffic back to the site as well as ticket sales.”

Recognizing the importance of not being “reliant on a single source” Kevin tells Chris that Twitter is also a player in their digital strategy as is LinkedIn because “conferences/professional events is still the largest, single largest percentage of events on our system.”

In the below clip, Dixon asks about competition—specifically Ticketmaster.  Kevin responds by talking about the challenges of getting into the music market with some of the contracts that it requires and then lists events Ticketmaster does not necessarily service, such as “a small show, a club … attending a wine tasting event.“ 

Julia notes “there’s always a little bit of friction when you’re trying to democratize an industry” and speaking to “traditional ways of doing ticketing … in music and live entertainment” Julia says it requires “exorbitant fees and that is just not what we stand for.”

Make sure to check it all out in these two videos—and in case you missed episode I with Kevin and Julia Hartz you can find it here.

Past episodes of Founder Stories are here.

We had a blast at Disrupt this year in New York City. Now that we have disrupted the startup scene in New York, we are taking it back to our home turf, San Francisco. We will have new special speakers and guests, amazing new startups, fun after parties, and much more we will start revealing soon. Want to come with us? Here’s your chance.

To enter for a chance to win, just follow the steps below.

1) Become a fan of our TechCrunch Facebook Page:

2) Then do one of the following:

– Retweet this post (making sure to include the #TCDisrupt hashtag)
– Or leave us a comment below telling us why we should pick you

The contest starts now and ends June 19th at 7:30pm PT.

Please only tweet the message once or you will be disqualified. We will choose at random and contact the winner this weekend. Anyone in the world is eligible!

Also, as a little surprise, Ryz Media, maker of the popular My TV Remote app that turns the iPhone into a super powerful remote control, introduced a new colorful orb hardware design that plugs into the iPhone headset jack, allowing control of almost every entertainment device in the house. These four colorful new options improve function, as well as form, with an updated IR transceiver. The app includes a complete program guide for every zip code in the U.S., displays the most popular shows on TV, and also connects TV fans with others who are watching. Our own MobileCrunch raved about it last year.

They have offered to give 250 of these away for free. The first 250 people who email here will win. A picture of the new design is below.

Hacker group LulzSec, which only communicates through its own Twitter account, LulzSecurity.com and random messages on Pastebin, has been on a Public Relations tear this morning. For the uninitiated, LulzSec is the loosely conglomerated internet griefer group behind the relentless hacker war on Sony, attacks on PBS, the US Senate, the CIA, and a slew of gaming sites popular with 4Chan users including EVE Online, Minecraft and League of Legends.

But despite the group’s eagerness to get in confrontations for the “lulz” and the numerous mass media headlines to the contrary yesterday, LulzSec is NOT at war with Anonymous, another hacker group — Anonymous, before the appearance of LulzSec, was held to be the preeminent Internet troublemaker. As the @LulzSec Twitter account makes clear this morning …

“To confirm, we aren’t going after Anonymous. 4chan isn’t Anonymous to begin with, and /b/ is certainly not the whole of 4chan. True story./b/ is the peon of all the 4chan boards and 4chan is the mass amplification of crowdsourcing used by AnonOps to gain support. #MediaFacts Saying we’re attacking Anonymous because we taunted /b/ is like saying we’re going to war with America because we stomped on a cheeseburger.”

The group then emphasized this by retweeting a statement by @YourAnonNews, “We are NOT at war with @LulzSec #MediaFags.”

Okay, for those of you still confused, /b/ or http://boards.4chan.org/b/is a subsector of 4chan which is used by some Anonymous members , and while LulzSec did claim to have infected /b/ and 4Chan.org was down for awhile on Wednesday, it is unclear what, if anything, was caused by an organized  LulzSec DDoS. In any case, what the @LulzSec tweets are saying is that an attack against /b/ does not equal an attack against the entire Anonymous organization which hangs out primarily on its own IRC channel and not necessarily 4Chan.org. The main mistake people seem to be making is assuming that the two organizations, Anonymous and 4Chan, are interchangeable.

Explains internet griefing expert Adrian Chen, “If Anonymous and Lulzsec were warring, Lulzsec would have DDoS’d the Anonops servers or something. And instead of just circulating posters on 4Chan and Reddit, there would have been a big campaign by Anonymous to take on Lulzsec.”

All this leaves one wondering where exactly the “friend vs. foe” line is drawn. Despite all its gaming related mischief, apparently LulzSec is a fan of SEGA DreamCast and not involved at all in the SEGA Pass hacking this morning, and indeed wants to “help.” Or that could just be a joke. I for one have no idea.

For more on the (i)rrationale behind their efforts, read their press release, posted in honor of their 10,000 tweet today.

Dear Internets,

This is Lulz Security, better known as those evil bastards from twitter. We just hit 1000 tweets, and as such we thought it best to have a little chit-chat with our friends (and foes).

For the past month and a bit, we’ve been causing mayhem and chaos throughout the Internet, attacking several targets including PBS, Sony, Fox, porn websites, FBI, CIA, the U.S. government, Sony some more, online gaming servers (by request of callers, not by our own choice), Sony again, and of course our good friend Sony.

While we’ve gained many, many supporters, we do have a mass of enemies, albeit mainly gamers. The main anti-LulzSec argument suggests that we’re going to bring down more Internet laws by continuing our public shenanigans, and that our actions are causing clowns with pens to write new rules for you. But what if we just hadn’t released anything? What if we were silent? That would mean we would be secretly inside FBI affiliates right now, inside PBS, inside Sony… watching… abusing…

Do you think every hacker announces everything they’ve hacked? We certainly haven’t, and we’re damn sure others are playing the silent game. Do you feel safe with your Facebook accounts, your Google Mail accounts, your Skype accounts? What makes you think a hacker isn’t silently sitting inside all of these right now, sniping out individual people, or perhaps selling them off? You are a peon to these people. A toy. A string of characters with a value.

This is what you should be fearful of, not us releasing things publicly, but the fact that someone hasn’t released something publicly. We’re sitting on 200,000 Brink users right now that we never gave out. It might make you feel safe knowing we told you, so that Brink users may change their passwords. What if we hadn’t told you? No one would be aware of this theft, and we’d have a fresh 200,000 peons to abuse, completely unaware of a breach.

Yes, yes, there’s always the argument that releasing everything in full is just as evil, what with accounts being stolen and abused, but welcome to 2011. This is the lulz lizard era, where we do things just because we find it entertaining. Watching someone’s Facebook picture turn into a penis and seeing their sister’s shocked response is priceless. Receiving angry emails from the man you just sent 10 dildos to because he can’t secure his Amazon password is priceless. You find it funny to watch havoc unfold, and we find it funny to cause it. We release personal data so that equally evil people can entertain us with what they do with it.

Most of you reading this love the idea of wrecking someone else’s online experience anonymously. It’s appealing and unique, there are no two account hijackings that are the same, no two suddenly enraged girlfriends with the same expression when you admit to killing prostitutes from her boyfriend’s recently stolen MSN account, and there’s certainly no limit to the lulz lizardry that we all partake in on some level.

And that’s all there is to it, that’s what appeals to our Internet generation. We’re attracted to fast-changing scenarios, we can’t stand repetitiveness, and we want our shot of entertainment or we just go and browse something else, like an unimpressed zombie. Nyan-nyan-nyan-nyan-nyan-nyan-nyan-nyan, anyway…

Nobody is truly causing the Internet to slip one way or the other, it’s an inevitable outcome for us humans. We find, we nom nom nom, we move onto something else that’s yummier. We’ve been entertaining you 1000 times with 140 characters or less, and we’ll continue creating things that are exciting and new until we’re brought to justice, which we might well be. But you know, we just don’t give a living fuck at this point – you’ll forget about us in 3 months’ time when there’s a new scandal to gawk at, or a new shiny thing to click on via your 2D light-filled rectangle. People who can make things work better within this rectangle have power over others; the whitehats who charge $10,000 for something we could teach you how to do over the course of a weekend, providing you aren’t mentally disabled.

This is the Internet, where we screw each other over for a jolt of satisfaction. There are peons and lulz lizards; trolls and victims. There’s losers that post shit they think matters, and other losers telling them their shit does not matter. In this situation, we are both of these parties, because we’re fully aware that every single person that reached this final sentence just wasted a few moments of their time.

Thank you, bitches.

Lulz Security

Image: LulzSec

A New York City startup that helps brands connect with and reward their fans via Facebook, Crowdtap, recently crossed the $1 million revenue mark for 2011, with 115,000 active members and about 50 major brand clients, chief executive officer Brandon Evans reported today.

Crowdtap members earn redeemable points for taking “brand actions” like: completing “quick hit” surveys, voting in a poll, participating in a live-online discussions or sharing brand-related content with a few friends via social media and the Crowdtap platform. The points that Crowdtap gives its members can be redeemed for an array of real world incentives, among them: an Amazon.com gift card, or a cash donation to a charity chosen from the company’s list of approved organizations. These range from environmental non-profits like the World Wildlife Fund (WWF) and The Nature Conservancy to The American Red Cross, Autism Speaks and Invisible Children.

Crowdtap requires that users donate five percent of their points to a charity of their choice. They can give more if they choose. Since launch, users have racked up $20,000 worth of points in donations to these charities (not all of that has been paid out, yet). Evans said his company aims to give users more and more choices over time; he is constantly adding causes and charities to the list.

To prevent Crowdtap members, who are brand fanatics, from turning into spammers the site only rewards points to users for sharing brand-related content that they “like” with up to four friends online. The points are doled out to the sharer once the recipient rates the content they’ve received.

Users who agree to either create content about a brand — like a video they made about their latest shopping trip to Old Navy— or who volunteer to host a party where they’ll pass around sample products provided by the brand, can gain a stronger reputation (and badges) within Crowdtap. Users with a higher reputation score become eligible for product freebies and other incentives that new or lighter users won’t get.

Marketers and media planners are embracing Crowdtap, Evans explained, because:

“The motivation we provide is not to get someone to simply post something. We motivate members to participate in a [brand’s] community and with our site in a way that’s as authentic as it can be. We can provide measurement that’s granular. We factor in proximity, intensity, engagement, and memory— time users spent with a brand in addition to [how many users the brand] reaches.”

[Ed’s note: See the screenshot below for a look at the marketer-side of Crowdtap.]

More than 75,000 of Crowdtap’s users signed up after the company launched its site in March at SxSWi, Evans said. The company charges its clients per interaction— if a user agrees to share a brand’s content, or take other actions, that generates a fee for Crowdtap. The number of brand-sponsored actions that Crowdtap members have completed in May 2011 totaled 385,000 Evans said. About 50 major brands and agencies are currently using Crowdtap, ranging from AOL (which owns TechCrunch) to Diesel, GolinHarris public relations, Pinkberry, Entenmanns and the ad agency Mullen.

Crowdtap ran a poll in May 2011— of the type it would run on behalf of an automotive brand or environmental group— for TechCrunch Greentech. We asked the site’s users who are parents: when would you buy an electric vehicle (if ever)?

Up until now, ecommerce valuations have been relatively reasonable compared to social media valuations. As Aileen Lee of Kleiner Perkins and Kevin Ryan of Gilt Group discussed on stage at Disrupt, there’s resistance for these companies’ prices to get too out of control because frequently the margins are tight and scaling up takes time and investment.

Also, ecommerce companies have a pretty clear business model. That sounds like it should be a good thing for whetting investor attention, but the unfortunate truth is nothing ruins a wildly speculative valuation like real revenue numbers. Real revenue numbers usually get multiples off existing revenues, not multiples off the promise of what they could be.

Someone should tell all that to BeachMint, because its new funding round seems to break all of those preconceived notions. The company has confirmed exclusively to TechCrunch that it has raised $23.5 million, just six months after its last $10 million venture round. The company wouldn’t comment on the valuation, but according to our sources it was at a rich $150 million pre-money valuation.

This brings BeachMint’s total invested to date to $38.5 million. This round was lead by Scale Venture Partners with Chicago-based LightBank coming in as a new investor as well. Also participating in this round were all the existing investors including Valley firms Trinity Ventures and NEA. Scale general partner Sharon Wienbar had been tracking the company for a while and was impressed by the combo of a strong curation model, an experienced team mixed together with “a little of that Southern California celebrity magic.”

BeachMint, started by MySpace cofounder Josh Berman and Diego Berdakin, primarily operates a site called JewelMint, which is almost the exact same model as ShoeDazzle. People join a monthly club, fill out a fun survey to asses their personal style, and they’re shown a selection of jewelry each month they might like for about $30 each.

Unlike the old CD clubs of my childhood, there’s no obligation to buy something every month. Like ShoeDazzle is cofounded by Kim Kardashian, JewelMint has some celebrity backing too, from Kate Bosworth and her stylist Cher Coulter. (In case it’s not clear, they did not design the jewelry used to illustrate this post.) Its second site, StyleMint is opening in June and will feature T-shirts designed by the Mary Kate and Ashley Olsen for $29.99 per month. The plan is to expand to multiple verticals, not just in women’s apparel. Things like food, wine, beauty products are all on the table. “We have 100 ‘Mints’ we’ve thought of,” Berman says.

The company seems to be doing well roughly nine months after the launch of JewelMint, but the rich valuation caught several Valley VCs by surprise. ShoeDazzle also recently raised a round of venture money at impressive terms: Andreessen Horowitz invested $40 million at a valuation we originally reported to be north of $200 million. We’ve since learned the post-money price was $280 million. Also not bad.

But a source with knowledge of both companies tell us there is one big difference between the two companies: Their revenues. ShoeDazzle is doing roughly $5 million in monthly revenues, while JewelMint is doing just $500,000 a month– literally ten times less. What made Andreessen Horowitz so hot and bothered to get in ShoeDazzle was the model in part, but it was also the revenues, the growth, and the company’s rabidly engaged Facebook fan page, which has more than 1 million users. JewelMint’s fan page attendance is about half that; then again it’s a younger brand. It also didn’t hurt that ShoeDazzle founder Brian Lee’s other company LegalZoom just raised a round from Kleiner Perkins and is expected to go public this year.

Either Shoedazzle’s investors got a steal, Berman is an ace negotiator, or investors really believe the vertical strategy is going to catch hold in a big way. BeachMint wouldn’t comment on revenues or the valuation, but said they had multiple bids at that price. “We talked to very quantitatively driven investment firms, and they got very excited when they saw the numbers,” Berman says.

A couple VCs we spoke with say they passed on the BeachMint deal because of concerns over whether this model works broadly across all a myriad of verticals. After all, sprawling shoe collections have made Imelda Marcos and Carrie Bradshaw aspirational figures for many women– it’s hard to think of many cult figures with obscene collections of $30 earrings. And other verticals may make less sense. How many categories are there where you want to pay $40 to have a new item every month? How many sunglasses, hair accessories, bath products or handbags does one woman need? When it comes to clothes, H&M and Zara are formidable low-cost, real-world incumbents.

Indeed, ShoeDazzle and JewelMint’s success is theoretically at odds with the philosophy behind another hot ecommerce company, Rent the Runway, which tries to solve the problem of a having a closet-full-of-nothing-to-wear by allowing women to rent a couture piece for the price they’d spend on something new at H&M.

Weinbar and BeachMint’s founders agree that jewelry is a far less intuitive category, and say the fact that JewelMint is going so well is evidence that there are others out there that might surprise us all. The risk is overload, particularly now that two companies have scored rounds at such impressive valuations. No doubt even more copy cats are on the way. Getting into the too-siloed “It’s a Facebook for people who like fish!” territory rarely ends well.

Recently I sat down with a well-connected Silicon Valley CEO who just raised a ton of money, and who knew of other startups raising even more. There is a new startup club of younger companies raising money right now at $1 billion valuations. I already knew a couple of them, but I started asking a few venture capitalists and now I have a pretty good list of who is in that club and who is trying to get in (see below).

As we all watch the established Web companies go public (LinkedIn, Pandora) or prepare for an IPO (Groupon, Zynga, Facebook), there is this new class of younger, but fast-growing, startups rising up right behind them. A lot of them are out raising money right now at $1 billion valuations. These are $50 to $100 million rounds, and they are generally going to companies showing incredible growth rates in both users and revenues, at least according to investors who have looked at these deals.

So who is in the new billion dollar valuation club?

Airbnb is definitely in the club. The crowdsourced marketplace for turning your apartment into a hotel for a night grew 800 percent last year in nights booked to 800,000. There are currently 60,000 listings, and bookings keep growing by 40 to 50 percent a month. Sublets are next. This is going to be one of the biggest companies to come out of Y Combinator.

Square is also in the club. It is raising at least $50 million. Square passed 500,000 card readers and 1 million transactions in May, and is processing more than $3 million a day in mobile payments. COO Keith Rabois told us at Disrupt NYC that Square will do $1 billion in transactions this year, and he thinks it could ultimately do better financially than Paypal (where he was an early executive). Vinod Khosla recently joined the board.

Spotify is finally closing its $1 billion round that’s been in the works since at least February, with DST, Kleiner, and Accel participating. The $100 million or so it is expected to raise will help the music streaming service enter the U.S. market. Finally. Maybe. We’ve been waiting for you.

Dropbox, the Y Combinator file-sharing startup that only ever raised $7.2 million might end up with the largest valuation in the club, perhaps as high as $1.5 billion or $2 billion. It’s just growing like crazy, with 25 million users saving 200 million files daily. That’s up from 4 million users 18 months ago. But this deal is the one that keeps getting pushed out (it is growing so fast that the longer it waits to take money, the higher the valuation).

Gilt Groupe is already in the club. It closed a $138 million round at about a $1 billion valuation last May. One of the first companies to introduce online flash sales in the U.S., Gilt is on track to do $500 million in revenues this year and has expanded from fashion to food, travel, local deals, and more.

FourSquare is also rumored to be out raising another round, but it might not quite make it into the $1 billion club because its revenues don’t justify that kind of valuation. Unless, that is, it pulls a Twitter.

Just above this group, is Pandora (which just went public with a $2 billion market cap), LivingSocial (with a $3 billion valuation), LinkedIn (already public, with a $6.3 billion market cap), Twitter (which is worth anywhere from $3.7 billion to $10 billion), Zynga (which will be worth north of $10 billion when it goes public), Groupon (which could be worth more than $25 billion) and Facebook (which is already worth $50 billion and could go as high as $100 billion by the time it IPOs).

Image credit: John Talbot

comScore has just released its monthly data on online video engagement, with 176 million U.S. Internet users watching online video content in May for an average of 15.9 hours per viewer. The total U.S. audience engaged in more than 5.6 billion viewing sessions during the course of the month. And 83.3 percent of the U.S. Internet audience viewed online video.

comScore says Google sites (a.k.a. YouTube) was again the top video property in May with 147.2 million unique viewers, 2.17 billion viewing sessions and an average of 311 minutes spent per viewer on the site (that’s an average of 5 hours spent per view in May).

YouTube had previously revealed that the video site is now handling 3 billion views per day, but comScore’s measurement of viewing sessions is different from actual views. We’re assuming a viewing session is measured as sitting in front of YouTube before clicking away, which could include watching 1 video or 10 multiple videos in a single session. YouTube is probably counting individual views.

VEVO followed with 60.4 million viewers (and 309 million viewing sessions), with Yahoo (55.5 million viewers) and Facebook (48.2 million viewers) taking the third and fourth spots, respectively. Viacom Digital ranked fifth with 46.5 million viewers.

The U.S. internet audeince viewed a whopping 4.6 billion video ads in May (up from 3.8 billion in April), with Hulu generating the highest number of video ad impressions at more than 1.3 billion (up from 1.1 billion ads in April).

Tremor Media Video Network ranked second overall (and highest among video ad networks) with 700.8 million ad views, followed by Adap.tv (642 million) and BrightRoll Video Network (565 million). Time spent watching videos ads totaled more than 2 billion minutes during the month, with Hulu delivering the highest duration of video ads at 560 million minutes.

Video ads reached 45 percent of the total U.S. population an average of 34 times during the month. Hulu also delivered the highest frequency of video ads to its viewers with an average of 48 over the course of the month.

The duration of the average online content video was 5.2 minutes, while the average online video ad was 0.4 minutes. Video ads accounted for 12.6 percent of all videos viewed and 1.2 percent of all minutes spent viewing video online.

The Internet is abuzz with chatter that this, the tablet in the pic above, is the Xoom 2. It’s featured in a new Verizon ad (embedded after the link) and while it lacks any branding besides the large Verizon logo on the back, it at least looks like a Xoom. It has the same matte black color scheme, contured back and, as Droid-Life points out, the same unique speaker found on the Xoom. But please-oh-please do not let it be the Xoom 2. Or rather, please don’t release the damn thing anytime soon.

The original Xoom started slowly rolling out back in late February. It was supposed to be the ultimate Honeycomb tablet — a sort of Nexus product. But it isn’t and the sales reflected that. It’s stupid expensive, hard to hold, lacks a USB host port and functional microSD card slot. Then there’s Honeycomb, which isn’t exactly fully cooked even now thanks to the lack of apps. It only makes sense that Verizon and Motorola would want to quickly recover from the Xoom disaster, but launching the Xoom 2 anytime soon would do just the opposite.

Read More

Forrester Research has just released a new report this morning projecting U.S. mobile commerce to reach $31 billion by 2016, growing at a 39% compound rate. But the report says that mobile commerce is only expected to be 7% of overall eCommerce sales by 2016 and only 1% of general retail sales.

This year alone, mobile commerce sales are expected to reach $6 billion as more consumers look to their smartphones to make purchases. Forrester says that most retailers are continuing to invest in mobile apps and mobile optimized sites. In a recent survey of major retailers, the firm founds that only 9 percent of online retailers didn’t have a mobile presence or strategy.

Forrester says that there are a number of factors that will help drive growth. First, as mobile security improves, more consumers will feel comfortable inputting financial data into phones. And as smartphones usage increases, more consumers and retailers will look to mobile as an e-commerce platform. Plus as more brick and mortar stores create a web presence (as competition from online retailers heats up), mobile will inevitably be part of this strategy.

To put the $31 billion estimate in perspective, the research firm also recently estimated that both US and European online retail (representing 17 Western European nations) will grow at a 10 percent compound annual growth rate from 2010 to 2015, reaching $279 billion and €134 billion, respectively, in 2015.

Question: Who is the mother of MP3?

Answer: Singer songwriter Suzanne Vega, whose iconic 1981 song “Tom’s Diner” was used by MP3 inventor Karl-Heinz Brandenberg to calibrate the standard of the revolutionary codec that would change the music industry forever.

Vega’s attitude to the music industry is pretty matrimonial too. On Wednesday, she keynoted the “CREATE: Protecting Creativity from the Ground Up” conference in Washington DC, put on by the technology and media coalition Arts and Labs (for whom, full disclosure, I consult). Not only did Vega play us an haunting intimate version of “Tom’s Diner”, but she also spoke uncompromising in favor of the artist’s right to be paid for his or her work. Arguing that if she wasn’t paid for her songs she would have to go back to being a receptionist, Vega argued that music, like oranges, shouldn’t be given away for free.

Whatever else one might say about Vega’s critique of free culture and piracy, she can’t be accused of being a Luddite. As she confessed to me when I caught her on camera after her CREATE speech, she is a big fan of Twitter and particularly Facebook where she goes “eight or nine times a day”. Nor does she defend the status-quo of the old record industry. “The audience is the most important thing”, she explained the new reality of the business, telling young musicians that it’s much more important to build a loyal following than get a record deal.

Her faith in today’s digital technology to build viable new business models was echoed by a number of other speakers at CREATE. On a panel about the future of the digital economy that I moderated, for example, all the panelists agreed that the digital economy provided exciting opportunities for all creative industries in the 21st century. From Mike Fricklas, Viacom’s General Counsel to Matt Serletic, CEO of Music Mastermind to Jim Cavanagh, President of the American Society of Media Photographers to Tom Adams, Rosetta Stone CEO, everyone agreed that new streaming and anti-piracy technologies and devices offered incredibly exciting opportunities for media entrepreneurs. But, like Suzanne Vega, too, all the speakers on my panel agreed that digital content, like analog oranges, couldn’t and shouldn’t be given away for free.

Photo courtesy rpichler, stock.xchng

I was trying for a few weeks to write a review of the remake of Legend of Zelda: Ocarina of Time on the 3DS and I couldn’t do it. It was too hard. I was lost to the experience of the thing and knew that I’d simply gush over the new graphics and old storyline and have little to say about the quality of the thing. Then, like a porcine Robert Pirsig, I began to think about the quality of the thing and why Zelda plays such an important part in my life and the lives of an entire generation.

The Legend of Zelda came out at a crucial point in history. Launched in August, 1987, the game appeared on the cusp of the Iran-Contra hearings and its launch coincided with a major LA earthquake. To children of the 1970s who were just coming into their own (I was 12 then), it was a frightening and confusing time. I was too young to understand the world, yet old enough to be afraid of it. I don’t want to conflate world events with the launch of a game, but I think it’s accurate in this case and, at the very least, helps explain some of the world as we (or I) saw it.

Read more…

Expanding e-commerce operations to international markets is a challenge for online retailers. The logistics of localizing product prices in a country’s currency, and integrating shipping and delivery options can be difficult even for the biggest retailers in the world. Enter FiftyOne, an e-commerce platform that helps power international expansion and operations for online retailers.

FiftyOne streamlines all aspects of the international shopping experience for retailers. FiftyOne will manage all aspects of the international order life cycle, including multi-currency pricing and payment processing, landed cost calculation, customs clearance and brokerage, international fraud management, international logistics orchestration, and more.

Here’s how it works. With FiftyOne’s software powering the backend of the site, a localized homepage will appears automatically, welcoming the customer with a flag denoting their country and their selected currency.

At checkout, a customer can view a guaranteed order total in their own currency, including international duties (if applicable), taxes, and delivery costs, with a guaranteed exchange rate. Similar to the normal experience of purchasing an item online, the customer receives an e-mail directly from FiftyOne with the order number, estimated delivery timeframe and a link to the online tracking system.

FiftyOne has an impressive client base of retailers who are using its platform for global expansion. Barneys New York, Macy’s, Bloomingdale’s, Pottery Barn, Williams Sonoma and others have all used FiftyOne.

As more retailers see sales opportunity on the web outside of the U.S., FiftyOne is growing like gangbusters, In 2010, FiftyOne increased its annual sales by 310% year-over-year, from $25 million in 2009 to $77 million in 2010.
This year the company is on a trajectory to increase its sales by more than 250%.

You don’t hear news like this too often these days, but according to Japanese business daily The Nikkei, HP is planning to shift part of its notebook production from China to Japan in the next few months. The Californian company plans to eventually manufacture all computers for sale in Japan in factories in Akishima near Tokyo.

For that, HP plans to hire 50% more workers in Akishima, boosting the number of employees there to 450. According to the Nikkei, labor costs in Japan are about four times higher than in China. But with this move, HP apparently wants to increase efficiency, be closer to the market, stand out with a “made-in-Japan” moniker, and push down delivery times especially to Japanese business customers.

Read More