Category: Tech news

Marc Lore and Vinit Bharara have figured out a formula for selling low-margin goods online and shipping them overnight to customers. The two entrepreneurs have built Diapers.com into the largest seller of diapers and other baby products on the Web. Diapers.com is on track to bring in $300 million in revenues this year. Now the two are getting ready to launch a new e-commerce site, Soap.com..

It will sell much more than just soap. When it launches in July, Soap.com will offer 25,000 products—daily essentials ranging from cleaning supplies to toothpaste. By the end of the year, it will offer 60,000 different products, all at the same price you’ll find at Target or Wal-Mart, and about 25 percent less than at a typical drugstore, with free overnight shipping for orders of $50 or more. The overnight shipping is key because when you run out of toilet paper you can’t really wait around three days for your order to arrive.

The parent company, Quidsi, raised $30 million last year which they’ve been using to prepare for the launch of Soap.com. It will use the same warehouses and facilities that Diapers.com uses, and the same back-end inventory, logistics, and shipping software. The company recently moved to new fully-automated warehouses on both coasts, and now has 2.5 million square feet of warehouse space ready and waiting. “All the robots are in place,” says Bharara. They will pick and pack your soap and get it to you by the time you take your morning shower, or at least by the time you get home from work.

Here is a cool video showing how those robots give Quidsi a competitive advantage:

We’ve written about digital music startup Rdio a bunch in the past, starting from when we found out Kazaa, Skype and Joost founders Janus Friis and Niklas Zennstrom were involved in setting up and funding the business through their investment firm Atomico Ventures.

We noted how they were silently assembling a killer team, and took notice when an early iPhone app landed in the App Store that nobody was able to access yet.

This morning, the company finally unveiled its strategy for the first time, and opened up a preview version of the service to users in the United States on an invitation-only basis. We had a chat with Friis, CEO Drew Larner and COO Carter Adamson about the idea behind the service, the business model, future plans and some history.

Adamson explained to me that Rdio was born out of necessity. The founding members of the company looked around the digital music space and saw a lot of shortcomings on the market, specifically in terms of pricing strategies, portability, seamless playback and social sharing abilities across devices and issues with music discovery.

Rdio aims to solve all those problems with one single service and two fixed pricing plans.

Time is ripe now, they claim, because of the increasing proliferation of capable smartphones, more stable and faster networks worldwide, people getting accustomed to all-you-can-eat pricing models and paying for applications, and so on. We’ve heard that before, of course, including from many startups who’ve tried their hand at bringing music sales and distribution into the digital age – and most have failed spectacularly in doing so.

Most of the coverage of Rdio’s launch was focused on its subscription-based model. Basically, you can gain access to more than 5 million songs online for $4.99 a month, or $9.99 a month if you also want to be able to access your music collection from your mobile device. Apps for the iPhone and BlackBerry are on the way, with an Android version also scheduled for release ‘very soon’.

The service is being launched in the US first, then Canada, the UK and parts of Western Europe later on. Management is hopeful that the international roll-out will be carried out largely before the end of this year, but declined to discuss specific launch dates.

What’s been left out of most coverage is that Rdio also doubles as an à la carte store that could potentially rival Apple’s iTunes and Amazon’s MP3 store. That means you’re also able to purchase individual songs and albums through Rdio and download them to your computer.

It will be interesting to see if Rdio can stand its ground against juggernauts like Apple and Amazon, but also other Web giants like Google, Yahoo, MySpace, Microsoft and eventually, Facebook. Not to mention the likes of Rhapsody, Spotify, Pandora, Napster, MOG and We7.

If Rdio fails and becomes another Joost rather than another Skype-like story, it won’t be because of lack of content. The company has licensing deals in place with the world’s largest music labels – EMI Music, Sony Music Entertainment, Universal Music Group and Warner Music Group – along with a number of independent aggregators of digital music.

But the unique thing about Rdio, Larner and Adamson told me, is the social element. Users will be able to not only stream and download songs, but the whole experience revolves around activity streams, which is core to the service and enables people to discover music through what their friends are listening to and buying. There’s also some basic integration with social networking services like Twitter and Facebook.

Rdio also offers recommendations much like iTunes does with Genius, by algorithmically learning which music you like to listen to. Users can also discover music by browsing category rankings and playing artist-based radio channels, which serve tunes from similar artists as well.

Also compelling is that Rdio offers a small desktop app that serves as a basic music player but also scans a user’s iTunes and Windows Media Player history. That way, Rdio can check if the music you play on your computer is available through their service based on metadata and build your catalog based on your history, so you don’t have to start from scratch. This only takes seconds, Adamson explained.

I asked Friis if he took any lessons from his Kazaa days, which notably are almost a decade behind us. Surprisingly, he told me that the relations with key people from the music industry, which he developed throughout the whole litigation process and namely the settlement procedures, were key in getting Rdio off the ground in the first place.

In many ways, it seems like they wouldn’t have been able to seal the licensing deals that are in place now and are needed for Rdio to become a sustainable venture if it weren’t for Friis and Zennstrom’s history with Kazaa and the music labels. Funny how that goes.

Friis also took a lot of lessons away from Joost, the failed online video venture that the pair started a couple of years ago. The two businesses can not really be accurately compared apples to apples, Friis says, but he did learn a number of interesting things from the whole adventure, which he wouldn’t get into further because it would take him too much time.

Friis told me that he will divide his time between Rdio, Skype and other commitments, but that he has been and will remain closely involved with product strategy and more aspects of the business. Zennstrom will focus more attention on Atomico Ventures, although both he and Friis have personally invested in Rdio along with the (undisclosed amount of financing) that was contributed by Atomico.

Expect a full review and more screenshots of the Rdio service soon.

It was eight years ago that Ghyslain Raza slashed his way into our hearts with his Star Wars Kid video. Sadly, Raza suffered from severe bullying and abuse for his video and eventually ended up in a psychiatric ward for children. However, his video was seen 1 billion times and multiple thousands of geeks came immediately to his defense. While those must have been the worst years of his life, things are now looking up.

He and his family sued the kids who leaked the video for $250,000, settled, and that seemed to be the end of it. Now, however, Ghyslain just became the president of the Patrimoine Trois-Rivières, a heritage society dedicated to conserving his hometown in Quebec. He’s also working on law degree at McGill in Montreal.

Raymie Stata, Chief Architect at Yahoo has been promoted to the role of CTO and Senior Vice President, according to a post on Yahoo’s corporate blog. Stata will replace former CTO Ari Balogh, who left the company in April.

Stata joined Yahoo in 2004, and has led a number of significant tech initiatives across the company from re-imaging its technology stack, to spearheading search and advertising development work and architecting the company’s private cloud.

Prior to joining Yahoo, he founded Stata Laboratories, which he sold to Yahoo in October 2004. Prior to founding Stata Labs, Raymie worked at the Digital Equipment Corporation’s Systems Research Center, where he contributed to the AltaVista search engine. He was an Assistant Professor of Computer Science at the Baskin School of Engineering at UC Santa Cruz, and has collaborated with the Internet Archive.

Stata will report to chief product officer Blake Irving. Stata recently participated in TechCrunch Disrupt, where he served as a panelist and awarded Art.sy with the Rookie Disruptor Award. It’s nice to see talent actually staying at Yahoo, considering the growing number of executives and early employees have left over the past few months.

In-stream advertising network Ad.ly, which launched last year, is moving beyond just advertising on Twitter today. The startup just announced a deal with MySpace to allow the social network’s members to insert in-stream ads in their activity streams. Terms of the deal were not disclosed.

Ad.ly, which will continue to advertise on Twitter, links up advertisers with users and then distribute links to marketing campaigns through the user’s tweet streams with full disclosure. Ad.ly’s recently launched self service platform platform enables Advertisers to connect with any user who signs up for Ad.ly’s service. So for example, an advertiser for Dell could choose which Twitter power-user to pitch their ad too and then submit a bid to a particular user. The publisher then approves or denies the request. Once the publisher approves the Tweet, the message is sent out via their account by Ad.ly.

Beginning today, MySpace publishers can visit this site on the network to sign up with Ad.ly and create a profile. Once registered, publishers can decide which messages from advertisers they want to support and Ad.ly will deliver the approved messages into the activity stream, similar to the arrangement with Twitter. MySpace feels that Ad.ly is a prime opportunity to allow others, particularly musicians, filmmakers and celebrities on the network, to monetize off of their stream.

This isn’t the first time that MySpace has inserted ads into the stream. The social networks began inserting ads in-stream earlier this year. But the deal with Ad.ly is one of the first with a third-party in-stream ad network. It’s interesting that Ad.ly has engaged in a formal deal with MySpace (where we’re assuming there is money exchanging hands). We’re assuming that Twitter doesn’t have a similar monetization deal Ad.ly but after COO Dick Costolo’s announcement last week, this may change.

Costolo addressed Twitter’s long-term strategy and updated TOS last week, which was thought to ban in-stream ads and affect in-stream ad networks like Ad.ly. However, Ad.ly was quick to respond that their service does not violate Twitter’s TOS and will continue to operate as is. Ad.ly founder Sean Rad echoed these sentiments to me, saying that the new TOS do not affect Ad.ly.

Regardless of where Twitter goes with banning ads in the stream, Ad.ly is wise to diversify its network beyond Twitter, which seems to be figuring out its own monetization and advertising strategy. And armed with $5 million in new funding, Ad.ly should be ready to improve its product with new features and iterations.

Google confirmed reports from yesterday that it acquired Invite Media, a bidding exchange for display advertising. Google did not disclose the amount of the deal, but Peter Kafka at MediaMemo pegs it at around $70 million (update: one investor calls that amount “inaccurate,” but can’t disclose the true amount. The company raised a total of about $5 million in two rounds). Today on the DoubleClick blog, Google explains what the startup does:

Invite Media has developed technology that enables advertisers and agencies to use “real time bidding” to buy display ad space, and to optimize display ad campaigns, across multiple advertising exchanges, all in a single interface.

Google is a big proponent of realtime bidding. Its search keyword advertising is priced based on an auction model. Invite Media brings auction pricing to display ads by giving advertisers a mechanism to ” tailor their bids on an impression-by-impression basis, based on their own data.”

Last year, DoubleClick launched its own Ad Exchange, which will work now work hand-in-hand with Invite Media’s technology. There is no doubt that Google wants to take the best parts of paid search ads and bring those economics to the world of display advertising. The question remains, however, whether auctions benefit the advertisers or publishers more. It all depends on how much bidding there is for a specific ad slot. My guess, though, is that there is so much inventory that market pricing will have the effect of pushing average CPMs down because there is no scarcity when it comes to online advertising.

European music startup Spotify has all its “ducks lined up” for a U.S. launch, we’ve heard from multiple sources. It has servers ready to go in the US and, crucially, users already there, even though it has not yet officially launched. It fact it has 30,000 users in the U.S., according to the chatter coming out of the Stockholm tech scene where the company has its main development arm. But these users are being kept quiet.

So why isn’t Spotify launching in the U.S. right now?

YouTube has become an integral tool for political campaigns across both national and local levels. And Google moderator has also been used in a variety of ways to host community town hall meetings. Today, Google is launching a 2010 Campaign Toolkit and an upgraded Google Campaign Toolkit.

The toolkits aim to provide political candidates with the resources to successfully use both YouTube and other Google products to engage constituents and citizens. On YouTube, campaigns will have access to features like a Politician channel (which allows campaigns to brand their channel and upload longer videos), Google Moderator, and analytics tool YouTube Insight. The toolkit also includes paid advertising campaigns, such as in-stream ads and Promoted Video. The Google toolkit shows how products in the Google Apps family like Docs and Gmail, can keep staff and volunteers connected.

The offerings are sure to be particularly useful for politicians and candidates who are running for office in the coming year. Long-winded politicians should love the fact that video time limits are longer than normal, and they can run the same 15-second and 30-second TV ad spots in YouTube. President Obama notably used YouTube for both his campaign efforts and now within the White House. The White House also uses Google Moderator and App Engine.

The picture above is a complete fake. But more on that in a minute.

Microsoft is giving a preview of a variety of enhancements to its Windows Live Essentials suite – a set of online and desktop services that includes hotmail, messenger, sync, movie maker and photo gallery. Most of the desktop versions of these services are available only for Windows users, although the online components only require a browser from any operating system.

These enhancements come after Microsoft’s preview of the online version of Office, which is also within this suite. I had a chance to sit down with Brian Hall, GM of the Windows Live Business Group, today to see some of the changes.

Many of the changes are fairly minor, but at least two are going to be big crowd pleasers. First, Microsoft has made changes to their Movie Maker video editing software that allows for the creation of Animoto-like video clips containing photos and videos. They’ve added a variety of transition and effect options, as well as the ability to add music and text, to these clips.

But the really interesting changes are around Photo Gallery. Previously Microsoft had a facial recognition feature to allow you to quickly add names as tags to photos. But they are now adding facial recognition as well, and it takes a guess as to the person in the photo. In the demo it worked very well and saves time with tagging – a lot of time. The application also has one click sharing of photos to Facebook and other services and the tags go with it.

But by far the most impressive thing I saw today was the Photo Fuse feature that they’ve added. The general idea is you can take a bunch of pictures and turn them into a single photo that’s better than any of the originals. And it only takes a few seconds.

The best use case is clearly group photos that you’d take a a wedding or wherever. Someone always has their eyes closed or is looking away. With Photo Fuse you can take the best parts of a number of photos and create that perfect group picture.

Hall spent a lot of time today showing me Photo Fuse, which I zeroed in on among all the other new features launching. We even took a few pictures of Hall and his PR people – Michael Celiceo and Bonnie McCracken – and ran them through Photo Fuse.

This was the final result – a picture that was never actually taken (the top image – you just can’t tell). The working photos that are real are below it. There’s also a video of the whole process. Fascinating stuff.

The new suite will launch in a few weeks, says Microsoft. In the meantime we’ll give away 100 accounts now – details in the next post.

More screenshots from the new products:

Today during an interview at AllThingsD’s D8 conference, Facebook CEO Mark Zuckerberg got grilled by Walt Mossberg and Kara Swisher on Facebook’s recent privacy changes, the resulting backlash, and the company’s long-term vision.

By far the most tweeted about moment of the conversation came around a third of the way through, when Zuckerberg (who was sweating and appeared to be nervous, according to multiple tweets) took off his famous hoodie, revealing it to have Facebook’s mission statement stitched inside. Fortunately the conversation didn’t linger on Zuckerberg’s attire for long — the questions quickly turned toward some more pressing issues like Instant Personalization, and how Zuckerberg goes about making decisions.

When asked about the site’s privacy changes, Zuckerberg wasn’t exactly forthcoming. Many tweets, and the official live coverage of the event, noted that Zuckerberg dodged some questions about privacy, resorting to talk about encouraging serendipity through openness and well-worn anecdotes detailing why sharing is important. Zuckerberg also brought up Facebook’s oft-repeated stat that over 50% of users have adjusted their privacy settings, citing it as evidence that users know what they’re doing (this doesn’t convince me in the slightest — that means nearly 250 million people haven’t touched them).

With regard to Instant Personalization, Zuckerberg referred back to the News Feed backlash as evidence that innovative features can become immensely successful once the controversy dies down. He predicted that a few years from now, we’ll look back and question why all of these websites weren’t personalized.

Asked about leadership and his role at the company, Zuckerberg said that he would remain as CEO after an IPO, though he didn’t know when that would be. He also said that he regularly consults with a “core group” of Facebook employees that he has worked with for years, and that any of them would be capable of steering the company.

Toward the end of the conversation, Zuckerberg also noted just how much Facebook manages to accomplish with extremely small teams. Facebook Chat is run by one person. And Facebook search — which Zuckerberg said sees usage that’s on the same order of magnitude as Google search — is run by only twelve people.

Not to belittle what Facebook has accomplished with such small teams (really, it is quite incredible), but it’s worth pointing out that  the search comparison isn’t really fair. As MobileCrunch editor Greg Kumparak explains:

That.. doesn’t really make sense. Not the magnitude, but the comparison. It’s like saying “We are just as good at searching through our perfectly organized file cabinet as Google is at searching through someone else’s mansion.”

Marin Software, a startup that creates search engine management software for advertisers and agencies, has raised an additional $11.2 million in Series D financing. Marin’s venture capital investors include a href=”http://www.crunchbase.com/financial-organization/dag-ventures”>DAG Ventures, with Focus Ventures, Benchmark Capital, Amicus Capital and Triangle Peak Partners. This brings Marin’s total funding to $35 million.

Marin Software, which just raised $13 million last year, offers a browser application to help advertisers and agencies managing paid search advertising campaigns across Google, Yahoo, MSN and other search sites. Marin’s software is used by 180 companies including Razorfish, and FreeCreditReport.com. Marin’s customers spend at least $100,000 per month on paid search campaigns across the major search engines.

Ever since the launch of his CityGrid local advertising network at the beginning of the year, Citysearch CEO Jay Herratti has been putting most of his efforts into building out CityGrid as the largest network of local advertisers and local apps. Citysearch is now simply a flagship publisher on the CityGrid network. To reflect this shift in focus, the Citysearch business unit of IAC (which includes CityGrid, Citysearch, Urbanspoon, and Insider Pages) is changing its name to CityGrid Media

All of the local listings in Citysearch are available through CityGrid’s APIs so that anyone creating a mobile app or local Website can grab business listings, addresses, phone numbers, photos, reviews, and more and build their own apps around them. CityGrid also matches local advertisers with these local publishers.

The geo-local market is developing so quickly that Herratti knows he cannot predict which mobile app or approach will win out in the end. Instead, he wants to scale CityGrid to become the largest network of local advertisers and publishers so that no matter what turns out to be the hot Geo app of the moment, CityGrid ads and content will be at the center of it. CityGrid already has 700,000 paying local advertisers, and is on its way to a million. Some Citygrid partners include YellowPages.com, SuperPages.com, Bing.com, MapQuest, and Loopt.

According to a Tweet just posted by Twitter engineer Nick Kallen, the microblogging network has just enabled a new “You both follow” feature. The feature, which is only being tested for 10 percent of users, allows you to see any common people that you and another user both follow. Here’s a screenshot of what the feature looks like.

The “You both follow” feature is pretty much what it sounds like. When you click on a contact it will show you the common people you both follow on the right sidebar of the page, just above the “following” tab. It’s actually surprising the feature hasn’t been turned on sooner, considering how useful it is in showing your social connections between other Twitter users.

“You both follow” is similar in theory to Facebook’s friends in common feature, which has been around for some time now. The feature no doubt makes Twitter a little more of an interconnected social network and it should be interesting if the microblogging network takes it a step further. For example, Twitter could start recommending people to follow based on who your friends are following.

UPDATE: Twitter API engineer Marcel Molina says in a Tweet that he’s formed a new team with Kallen to “build rapid prototypes.” I think this means we should be expecting more feature updates in the neat future.

doubleTwist, the ‘iTunes for Android’ software that lets you sync your media files with dozens of devices, including Android phones, is one step closer to being a full-fledged solution for media sync on Android. The company has released a native Android application, available on Android Market for free, which offers users a polished media player capable of playing both audio and video.

Android is notorious for coming with a clunky default media player, and doubleTwist easily bests it, sporting a much cleaner interface, the ability to import iTunes playlists, and support for audio/video podcasts. That said, there are already plenty of third party solutions that also beat the stock Android player. So what makes doubleTwist different?

CEO Monique Farantzos says that the new doubleTwist Android player works directly with doubleTwist’s desktop software, in much the same way that the iPod and iTunes work together. Users can transfer ratings, playcounts, and other information back and forth between their phone and computer. Farantzos also says that online radio and support for wireless media sync (which would be big) are coming in the near future.

It’s worth pointing out that Android will soon allow users to stream their music from their PCs without having to physically connect their devices, but I suspect there will still be plenty of people looking to store and manage their media locally.

Google has just launched a new feature for mobile devices — namely the iPhone and Android — that lets you use Google Search to quickly find native applications from the App Store and Android Market. You don’t have to do anything to activate the feature: just run a Google query like “shazam app” or “download yelp” from your phone, and Google will place a special result at the top that links directly to the application in the App Store or Android Market, depending which platform you’re browsing from. The result also shows the app’s star rating and a link to other applications relevant to your query.

It’s certainly a handy feature, but it’s a little inconsistent — a query for “shazam app” worked as expected, displaying a link to the application as well as its star rating and price. But a query for “yelp app” didn’t activate the feature (though “download yelp” did work).

At this point it’s not entirely clear how Google is determining which application to display. I found that the somewhat generic query “basketball app” yielded “Pro Basketball Scores”, a popular free application for Android with over 1000 reviews. Oddly, this is not the top result when you type “basketball” or “basketball app” into Android Market directly, which probably means that Google search is using a different algorithm.

It will be interesting to see if Google tries to do more with this, especially given how weak the search feature built into the App Store is. Apple controls the content on the App Store (descriptions, photos, etc.) so Google probably can’t do anything with that, but perhaps it could use its own data (for example, the number of times people have run queries for a given app title) to serve up more relevant results.