Natick, MA-based Vivox said today that it’s opening its new “Vivox Web Voice for Facebook” service to all Facebook members. The application—which allows Facebook users to set up free voice chat rooms and invite their friends to participate from within Facebook—is one of the first creations of Vivox Labs, a new R&D arm of the company, and had been in closed beta testing for the last few months. Vivox, which we profiled last month, is known mainly as a provider of voice communication services for massive virtual worlds and game worlds such as Second Life and Eve Online.

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When California Gov. Gray Davis created the California Institute for Telecommunications and Information Technology in 2000, it was part of a broad state initiative that spawned four new centers for science and innovation with a shared mission “to invent the future.” The specific mission for the institute known as Calit2 (Cal IT²), which is based at UC San Diego and UC Irvine, was to “radically expand the capacities of communications and information infrastructures.”

In the nine years that he has served as Calit2’s director, Larry Smarr has done all that and more. He describes the institute as a “collaboration framework” that enables researchers throughout the University of California to take a multi-disciplinary and systems-based approach to complex problems. As a result, Smarr says Calit2 has engaged hundreds of UC researchers, formed affiliations with over 300 federal agencies, and worked with more than 200 industry partners. “I have to say we’re pleased with the progress we’ve made,” he says. (Smarr talks about the origins of the Internet in Part 1 of my story here.)

But Smarr also is looking at the path forward. He tells me he’s spent the past six months “on a vision quest” to identify the large societal challenges that he anticipates the next decade will bring. And if there is a thread that runs through his vision, it is to harness the power of Calit2’s expanding resources—“to build across the successes that we’ve had”—to tackle four over-arching problems of the next decade. These are Smarr’s big ideas for what he calls the digital transformation of healthcare, energy, the environment, and of our culture itself:

—Healthcare. Smarr sees healthcare moving increasingly to “a prevention and wellness model” that relies on innovations in the emerging field of “wireless health” technologies and the digital transformation of medical care. In our conversation, Smarr compares the way it will work to an automobile maintenance schedule:

“I just bought a new car, a hybrid,” Smarr says. “It has 30 computers in it. It probably has another 60 or 70 sensors, actuators, and memory chips. So my car will easily run …Next Page »

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Kirkland, WA-based Digeo, a 10-year-old home entertainment company backed by Microsoft co-founder Paul Allen, has been sold to Arris, a broadband communications firm based in Suwanee, GA, for about $20 million in cash.

Digeo is known for its high-definition digital video recorder, called Moxi. The acquisition gives Arris expertise, intellectual property, and talent in video networking and multimedia services delivery. Arris will gain about 75 Digeo employees (mostly engineers) in Kirkland, which will raise its R&D costs by about $3 million per quarter, the company said.

“Arris delivers the market position necessary to take the Moxi vision to the next level,” said Digeo’s CEO, Greg Gudorf, in a statement. “I am extremely pleased that the Digeo team will continue to drive the evolution of the Moxi platform.”

But observers point out that the purchase price means a substantial loss on the investment for Allen. PaidContent reports Digeo’s total funding was more than $110 million. In an interview with TechFlash, Gudorf said fewer than 10 Digeo employees would lose their jobs in the acquisition, and that he will stay with Arris during the transition. The news of Digeo’s layoffs was first reported by the Seattle Times.

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Verizon Wireless and chipmaker Qualcomm announced today that they are teaming up to offer machine-to-machine (M2M) wireless services to companies in industries ranging from healthcare to utilities to manufacturing. Their still-unnamed joint venture is designed to encourage corporations to use Verizon’s cellular network for more than phone services. For example, a utility could monitor and interact with circuit breakers, transformers, and other equipment to manage networks more efficiently and reliably. Just yesterday, Verizon Communications, which owns 55 percent of Verizon Wireless, announced it plans to cut a whopping 8,000 jobs by the end of 2009.

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Waltham, MA-based Matrix Partners has closed its ninth fund, raising $600 million for investments in software, mobile, consumer internet, communications, and systems startups, according to a press release. While the announcement only mentions one fund, PE Hub reported today, following up on its report earlier this week, that two funds were actually raised—the main Matrix Partners IX fund of $450 million, and a $150 million special opportunities fund, which it says is for investments outside Matrix’s core fields. Matrix had not responded to our request for clarification by the time this article was posted.

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San Diego’s TelCentris is announcing an upgrade to its VoxOx universal communicator service that includes a personal assistant feature, a virtual service that can answer your phone calls and route them according to your personal preferences. With the technology, you can direct phone calls from a family phone to reach you on your cell phone, office phone, or home phone—and you can send phone calls from that pesky sales rep to your voicemail.

The company says VoxOx is meant to solve your personal communications overload by unifying all the different methods that you use to communicate into a single user interface. While the startup faces a number of larger rivals—such as Google Voice—that offer unified communications service, TelCentris executives maintains that its service represents a different proposition than Google Voice or Skype. “There’s really no other product like it that’s out there,” says TelCentris CEO Bryan Hertz.

TelCentris CEO Bryan Hertz

Before today’s announcement, Hertz told me that while some rivals have combined communication services, most “unified communications” are usually done within the limits of an enterprise software application. Microsoft Exchange Server, for example, enables users to get audio voicemail messages, faxes, and e-mail delivered in their mailboxes, and lets them access their mailboxes from their cell phones or wireless devices.

In contrast, Hertz says VoxOx is “technology agnostic.” Unlike Google Voice, Hertz says VoxOx can be used to integrate a variety of communications services from a variety of third-party providers. So a VoxOx user can combine his or her existing phone number with their Gmail or Microsoft e-mail service and an outside instant messaging provider such as Yahoo, AIM, MSN, as well as social networking sites like Facebook, MySpace, and Twitter. “We’re not necessarily here to replace them, but we are here to organize them,” Hertz says.

The new VoxOx service—which is free—also aggregates the user’s list of contacts from different sources into a universal address book that is part of an iPhone-like graphical user interface. “We go much deeper than any of these other tools do individually,” says Hertz.

For example, if you use the VoxOx desktop display to update …Next Page »

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Back in March, I wrote a column about Google Voice, the reincarnated version of a voicemail unification service that Google acquired from Grand Central back in 2007. The free service gives you a single phone number for life that isn’t tied to any particular land line or cellular device—instead, calls ring through to whichever phones you specify. Voicemails get stored online and (if you want) transcribed into text e-mails. In my column, I called Google Voice “the end of the phone as we know it,” since a Google Voice number resembles an e-mail address more than an old-fashioned phone line. It goes with you everywhere, can be managed entirely through the Web, and literally turns your voicemails into e-mails.

Google Voice was, and still is, in a private, invitation-only, beta testing phase. When I checked with Google early last week, employees were still saying the service will be available to the general public “soon”—which is the same thing they were saying back in March. But the big day may be approaching. While rumors circulating last week about the service’s impending launch turned out to be false, Google Voice product manager Craig Walker did state, via his public Twitter stream, that “We’re cranking 24/7 to get there.”

In conjunction with my March column, Google kindly provided 100 Google Voice beta invitations for Xconomy readers—and not surprisingly, all of the invitations were snapped up within an hour after we publicized the offer. So in anticipation of the public launch of Google Voice, I decided to ping the lucky 100 beta account winners last Friday to find out how the service has been working out for them, and whether they’d recommend it to others.

The readers who’ve written back so far have been lavish with their praise—at least, the ones who have actually been using their accounts. Several have admitted that they never signed up, or that they signed up but found that Google Voice wasn’t what they expected, or that, as one reader put it, “I would have liked to [use it] but then work (life?) got in the way.” More about the potentially high barriers to adoption below.

Readers who’ve used Google Voice seem to like the way it lets them give out a single phone number to everyone, rather than separate office, home, and cell numbers. Several readers said they like the (somewhat sneaky) feature that lets users listen to callers as they’re leaving a voicemail, and break in if they want to talk to that person directly. And if there’s one feature everyone loves, it’s the automatic transcription of voicemail messages into e-mails—a Google invention that wasn’t part of the original Grand Central service. While Google’s speech-to-text technology is far from perfect, readers say it’s good enough to get the gist of a message across, and that it saves them from the universally dreaded task of actually listening to all their voicemail. (You can browse readers’ detailed comments below.) Xconomy’s CEO and editor-in-chief, Bob Buderi, has been using Google Voice since March, and he also cites voicemail transcription as his favorite feature.

Readers report surprisingly few technical glitches or other difficulties using Google Voice. The problems they do cite tend to be ones that are baked into the service’s design. Most people said it’s too much trouble to make outgoing calls through Google Voice, since users must either call their own Google Voice number first, or go to the Google Voice website. Which leads to another frequent complaint—the caller ID problem. Unless you place all your outgoing calls through Google Voice, then the people you call will see the number of the device you’re calling from, rather than your Google Voice number. That means you have to train everyone not to store your device’s number in their contact list, but to call you back on your Google Voice number instead. That’s plain confusing for everyone.

Asked to say whether they’d recommend Google Voice to a friend or a family member, quite a few readers said “Yes, but…” The “but” was that they’d only recommend it to people who are technically adept—”power users,” in one reader’s phrase. As another reader put it: “The person who is going to use [it] needs to be a bit of a techie (not super technical, but my wife who is not technical would get lost in the concept)…[there are] lots of configuration options which I enjoyed learning and setting up.”

How much have Xconomy readers actually used their Google Voice accounts, in the end? That varies. Some say they’ve made their Google Voice number into their main phone number, and that they use the service extensively every day. Others say …Next Page »

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Marlborough, MA-based signaling company Axis Semiconductor has completed half of a proposed $2,050,000 equity financing round, according to an SEC filing. No details on the investors were provided, par for the course for the company, which has been in stealth mode since its incorporation in 2007. Three members of Axis’ board of directors, including the chairman, previously worked at Analog Devices, the Norwood, MA-headquartered signal communications firm. Axis’ website claims its technology “improves the efficiency of signal and data processing by orders of magnitude over existing solutions.”

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At a time when communications startups are about as rare in San Diego as a newborn Panda at the zoo, the local wireless industry is delivering a nursery. CommNexus, the San Diego communications industry group, and San Diego-based Leap Wireless (NASDAQ: LEAP) are establishing a non-profit business incubator here to nurture startups developing communications technologies.

CommNexus CEO Rory Moore tells me that San Diego’s new business incubator, dubbed EvoNexus, is intended to provide a safe harbor for entrepreneurs who have been caught in the worst recession in decades. “We have a lot of very talented engineers who have been laid off,” says Moore, who was a founder or co-founder of seven companies, including San Diego’s Silicon Wave and Peregrine Semiconductor. “Two years ago, the best and brightest kids were sucked up from the Jacobs School of Engineering at UCSD, and now they can’t find a job.”

In an e-mail blast sent to thousands of recipients yesterday afternoon, CommNexus issued a “call for applications” that invites telecom-minded entrepreneurs to launch their startup in the new incubator, dubbed EvoNexus. The incubator hopes to host one or two startups by July and as many as 10 by the end of the year, according to Cathy Pucher, executive director of EvoNexus.

Cathy Pucher

Pucher says she’s targeting startups that specialize in communications and communications convergence technologies, such as in wireless life sciences, or wireless smart grid equipment. Among other things, applicants will be judged on the soundness of their development plan, target market, domain experience, and willingness to participate in entrepreneurial education programs. Pucher is a longtime industry veteran currently a co-founder and executive vice president at HuTribe, a San Diego startup focused on mobile social management applications.

The EvoNexus incubator will provide free and fully furnished office space, utilities, Internet access, and education and business mentoring by local executives and other volunteers. Startups will be allowed to stay for as long as two years, and will have no financial or other obligations to EvoNexus after they depart.

San Diego-based Leap Wireless, which provides low-cost wireless services through its Cricket Communications subsidiary, is donating office space for the incubator in Sorrento Valley, where Qualcomm and scores of other tech companies reside.

Moore acknowledges that getting venture funding for such startups is another matter. “It’s miserably hard for a company to get funded …Next Page »

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Since it began raising its second venture fund several years ago, New York-based Lux Capital has only invested in one startup in the San Diego region—Carlsbad’s Luxtera, which specializes in developing technologies to eliminate the bottlenecks in fiber optic networks for computers. (Luxtera got $26.7 million in a later-stage venture round at the end of last year from Advanced Equities Financial, August Capital, New Enterprise Associates, and Sevin Rosen Funds.) In comparison, Lux Capital counts four portfolio companies in the Boston area: Magen Biosciences, Genocea Biosciences, Cerulean Pharma, and Lux Research.

Perhaps compensating for such imbalance is the fact that Larry Bock, a respected biotech entrepreneur and venture investor (and Xconomist), represents Lux Capital in San Diego as a special limited partner. As a serial entrepreneur who has specialized mostly in the life sciences, Bock has founded 17 companies, including San Diego’s Illumina (NASDAQ: ILMN), Sequana Therapeutics, River Medical, Idun Pharmaceuticals, and Neurocrine Biosciences (NASDAQ: NBIX).

Bock also has become increasingly active as a philanthropist, and was both a principal organizer and sponsor of the San Diego Science Festival, a celebration of science held throughout March. The festival’s events included a session on nanotechnology, which pulled Lux co-founder Josh Wolfe out of his New York orbit. After giving Bock a few weeks to recuperate from the science festival, I recently caught up with both of them by phone to get their thoughts on investment strategy in the current climate.

Larry Bock

When I asked Bock if there would be another science festival next year, he said, “I was a little ambivalent whether I would do another one until the next-to-last day. But then, on the last day of the Science Festival, 100,000 people showed up at Balboa Park and the traffic was backed up for about 8 miles. The police had to close down [access to] the park at 2 pm.”

Bock also noted that having spent 15 months organizing the festival, “I’ve gotten to know every science community in San Diego. Being involved was one of the best sources of venture deals I’ve ever experienced.”

Bock said he met Wolfe more than six years ago, after he developed an interest in nanotechnology. “When I was traveling around to universities and scientific conferences, learning about nanotechnology, the only other VC I’d see was Josh,” Bock said. But Wolfe said Lux’s investment focus extends …Next Page »

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The evaporation of venture deals involving San Diego’s software, wireless, and related IT startups was probably the most surprising revelation that jumped out of the regional first-quarter venture data released Friday.

The survey by Dow Jones VentureSource reported that 15 startups in the San Diego region got a total of $194.6 million during the first three months of 2009, with life sciences companies getting $190.6 million of that. The survey reported only one non-healthcare investment during the quarter, a $4 million in an unnamed startup. That represents a 72 percent drop from the $14.5 million invested in four San Diego IT startups during the first three months of 2008.

In comparison, nationwide VC investments in the information technology category, which includes both software and hardware startups, fell to $1.58 billion, a 52 percent decline from the same quarter last year.

Overall venture investments tend to be lower during the first quarter. Still, Robert Kibble of San Diego’s Mission Ventures says he was surprised at San Diego’s showing, in part because he knows some IT deals were done. “Most have probably been inside rounds, and maybe even recaps, and they tend not to get reported,” Kibble says. (The VC surveys also are not definitive, and at Xconomy we usually find a few inconsistencies and omitted deals.)

“There’s no exit market right now, and when there’s no exit, people just don’t feel comfortable funding new companies,” says Jeb Spencer of TVC Capital, a small private equity software specialist. “We really do feel like we’re in a holding pattern right now, and we’ve asked all seven companies in our portfolio to do everything they can to get to breakeven as soon as possible.”

“There are very few venture capital firms in San Diego with dollars to invest,” Kibble told me. “Some are done.”

Kibble adds: “The consensus wisdom in the VC community is that the industry will contract significantly both from number of venture firms out there as well as amount of capital being deployed. This is not necessarily a bad thing, since overall industry returns have been somewhat anemic in recent years.”

On the other hand, venture investments in San Diego’s life sciences sector remained relatively active, even though funding fell by a third compared to the year-ago quarter. “Although the overall numbers are down, and down significantly, the biopharma and medical devices space is doing well—tremendously well, considering what’s happening,” says Michael Schoenfeld, a a partner in the venture capital advisory group at Ernst & Young.

Stan Fleming of San Diego’s Forward Ventures, which specializes in healthcare, sounded less upbeat.

“The venture markets appear to have taken significantly longer that the public markets to feel the impact of the melt-down,” Fleming wrote in an email Friday. “The market for later-stage is simply broken. No outside deals are getting done. There are no ‘comps’ that people have relied on in the past to price their next deal and as a result there is very little new late-stage money available. The rounds that are getting done are inside rounds. The big question is how and when the market will restart. I would guess that if you measured the amount of money flowing into venture funds you would see even a greater drop. As long as the institutional money is not flowing into the industry, the life sciences VCs will remain very cautious and the late-stage market dead.”

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San Diego Mayor Jerry Sanders has referred to SPAWAR, the Navy’s Space and Naval Warfare Systems Command, as one of the city’s best kept secrets, and I started to understand why during a presentation yesterday at San Diego’s Sidney Kimmel Cancer Center.

SPAWAR is a major Navy procurement agency, with a total budget of more than $2.4 billion in fiscal 2008. About 65 percent of that supports industry partnerships, which includes spending to acquire a host of hardware and software technologies needed for what the Navy calls C4ISR, Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaisance. Naturally, the Navy keeps most of this technology under wraps—literally. When maintenance crews work on U.S. warships at the Navy base here, they often wrap up parts of the superstructure before servicing the radar and other electronics.

So a presentation yesterday by Frank Gordon, who heads SPAWAR’s navigation and applied sciences department, represented an unusual opportunity to lift the veil of secrecy that surrounds the Navy labs on Point Loma. SPAWAR is an enormous organization, with more than 6,300 civilian, military, and contract workers just at its San Diego headquarters, and local spending of almost $991 million on procurement contracts and R&D programs, according to the latest data available at SPAWAR’s web site. Gordon says that at any given time, SPAWAR is overseeing more than 800 technology development programs in San Diego.

About 100 people attended the session, which was sponsored by Connect, the San Diego nonprofit group that promotes innovation and entrepreneurship. Connect was founded at UC San Diego in 1985 as a resource for academic researchers who wanted to start technology-based companies based on their laboratory breakthroughs. At SPAWAR’s government lab in San Diego, scientists also spin out new companies and technologies, said Jim Fallin, a spokesman for SPAWAR Systems Center.

Gordon, who is nicknamed “Dr. Chaos” because of his love of nonlinear dynamics, highlighted some of the advanced technologies that SPAWAR is developing for …Next Page »

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Rich Miner, the driving force behind Google’s Android operating system for mobile phones and a longtime leader in Massachusetts communications software circles, reportedly will join Google Ventures, a $100 million venture fund the search giant is said to be forming.

Rumors of the planned venture fund have been in the air since last summer. More recently, the rumors included Miner, who is based in Google’s offices in Kendall Square, near MIT. But things perked up significantly in recent days, after a Reuters reporter attending a Silicon Valley venture capital event last week spotted a name badge that identified Miner as part of Google Ventures. According to Reuters, a Google spokesman asked about the venture effort last Thursday said, “It’s a project we’re working on. But we’re not able to discuss the details right now.” But on Friday night TechCrunch stated that it had confirmed the news: “Yes, the rumors are true. Google’s Rich Miner is moving from the Android team to a new venture arm called Google Ventures,” it reported, citing an unnamed source.

Miner, who will be part of the keynote chat at Xconomy’s Future of Mobile Innovation in New England forum on April 7, did not respond to my e-mail seeking confirmation of the TechCrunch report. And an East Coast Google spokesperson sent me a reply virtually identical to what Reuters reported: “This is a project we are working on, but we’re not ready to discuss details right now.”

Which is to say that it all looks real to me.

News of a Google venture fund first surfaced last July in the Wall Street Journal, which reported that the fund would be headed by Google senior vice president of corporate development and chief legal officer David Drummond.

Not everyone thinks it’s a good ideas for companies to be dabbling in venture funding. The Journal article included some statistics and background on corporate venture capital arms, which indeed do have a mixed-to-poor overall record of success. Rather than focusing on cash returns, these funds play a chiefly strategic role, by allowing companies to invest in startups whose products or services fill gaps in the corporation’s own offerings—or that are blazing new trails, both in markets the company might want to enter and in areas that might prove disruptive to the parent firm.

Occasionally, such arms are also formed to incubate and spin out interesting new developments from inside the company that don’t fit core business lines. No one seems to think this is what Google Ventures would do, but you never know: there are a lot of interesting things going on in Google—and not all may get the attention they deserve if they stay inside the company.

Whatever the focus of the new fund, Miner’s presence—his current title is Group Manager, Mobile Platforms—would seem to indicate it will take an interest in Android-related ventures, and also mobile software and communications more generally.

Miner was brought into the Google fold in 2005, when Google bought Android, the Silicon Valley mobile software company he co-founded. Before that, he was Vice President of Advanced Services at Orange, where he headed North American R&D activities. And prior to that, he co-founded Wildfire, a Lexington, MA-based company that developed a voice-based personal assistant (you can definitely see aspects of Wildfire in Google Voice, which Wade reviewed here). He got his PhD in computer science from the University of Massachusetts at Lowell. You can read more about his background here.

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A survey released today by Microsoft (NASDAQ: MSFT) says San Diego is the best midsize city in the United States for remote working. The nationwide survey commissioned by the Redmond, WA, software giant found that U.S. employers generally support remote-working programs, although just 39.4 percent have a policy that details how their employees can work from home. Microsoft says interest in remote working has been spurred by higher energy costs and the current economic crisis.

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Bellevue, WA-based Intellectual Ventures said today it has formed an alliance with Telcordia Technologies, a networking and telecommunications firm in Piscataway, NJ. Intellectual Ventures has acquired the rights to license about 500 of Telcordia’s patents, and in return, has also agreed to fund inventions from Telcordia’s R&D lab. Financial terms of the deal were not given.

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What’s the most exciting company in Seattle? I recently put the question to Patrick Ennis, the global head of technology for Bellevue, WA-based Intellectual Ventures, and his answer surprised me: Impinj. The firm in Seattle’s Fremont neighborhood has been around since 2000, and is well-known for its focus on radio-frequency identification (RFID) technologies—not exactly the sexiest field in an era of Web 2.0, mobile software, and alternative energy startups.

But dig a little deeper, and the story of Impinj will grab you. Like most successful companies, Impinj has been forced to change its strategy at crucial moments. It has had to navigate tricky technology standards—eventually winning out in a major fight between standards bodies—and adapt to major challenges in the marketplace. Through it all, it has amassed an impressive network of customers, partners, and investors—to the tune of $110 million in funding from the likes of Arch Venture Partners, Madrona Venture Group, Polaris Venture Partners, and Mobius Venture Capital.

So how is it doing now? After Ennis mentioned Impinj—he led an investment in the firm back when he was a managing director at Arch—I was eager to hear its story, and why its technology and business model are still so promising. I recently had a chance to visit with Impinj’s CEO, William Colleran, and Evan Fein, vice president of finance and administration. What they told me amounted to quite a compelling case study of how to navigate a nascent market.

Impinj was founded in 2000 by a University of Washington professor of computer science and engineering, Chris Diorio, who was a student of microelectronics pioneer Carver Mead at Caltech. Diorio serves as Impinj’s chairman and chief technology officer. “He’s a fantastic professor and entrepreneur,” Ennis says. “Usually, professors just want to be professors. When you do find an entrepreneur professor, it’s heaven. The world needs more people like that.”

As Fein relates, Impinj originally focused on hardware for cell phones and base stations. Diorio had developed a technology called “self-adaptive silicon” that allowed an electronic circuit on a chip to adapt its characteristics after being fabricated. The company released a cellular product in 2001—right as the telecom industry was melting down. “We decided, ‘This isn’t going to work,’” says Fein, who was employee No. 8.

So the search was on for broader applications of integrated circuit technology. In late 2003, Impinj settled on RFID as its new focus, over other promising candidates like ultrasound and GPS. The idea of cheap, tiny chips that could be used to “tag” any product or shipment and improve companies’ supply-chain management was getting a lot of play in commercial circles. What Impinj brought to the table was a …Next Page »

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In Sunnyvale, CA, yesterday, Applied Micro Circuits Corporation (NASDAQ: AMCC) announced it was making pay cuts and laying off 100 employees in its worldwide workforce. The company, which was founded in San Diego and based here until 2005, now has between 470 to 500 employees around the world, spokesman Gilles Garcia told me.

Some of the planned layoffs will fall in San Diego, where AMCC still operates an engineering and chip design center, although Garcia could not say how many. He minimized the cuts here, saying “To continue to do R&D, we need to protect what we do in San Diego and other design centers.”

The company says the reductions are expected to reduce its annual operating expenses by an estimated $14 million to $16 million in AMCC’s fiscal year 2010, which begins in April.

During the network equipment boom of the previous decade, AMCC reigned among San Diego’s most successful chipmakers. Sales of its semiconductors used in long-haul communication networks hit $435 million in 2001. But AMCC fell mightily in the telecom capacity glut that followed the dot-com bust.

The company expanded its product line to include data storage technologies for Internet data centers, and new CEO Kambiz Hooshmand, a former Cisco Systems executive, moved AMCC’s headquarters to Sunnyvale, CA, in 2005. At that time the company had about 755 employees and a market cap of roughly $780 million.

Now the workforce is less than 500 and the market cap is about $276 million. AMCC’s sales were up 19 percent, to $208.6 million, for the first nine months of its fiscal year—although sales fell by 13 percent during the last three months of 2008. The company said last month that Hooshmand plans to step down as CEO on June 1st, as Paramesh Gopi, AMCC’s chief operating officer, takes over for the next chapter in the corporate saga.

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Which San Diego firms are the most inventive? When the 2008 year-end patent figures recently became available, we decided to find out. Xconomy is listing the top 25 patent winners in the San Diego region below, based on data provided by IFI Patent Intelligence of Wilmington, DE. Our compilation includes a few surprises.

San Diego-based Qualcomm might reasonably be expected to lead the region in patents issued in 2008—and with its longtime leadership in wireless technology, indeed that was the case. Yet the company that garnered the second-highest number of patents last year is not a major engineering research and development conglomerate like SAIC, but Callaway Golf, the Carlsbad-based maker of high-end golf clubs.

Some also might find it surprising to see a startup company in the top 10, since prosecuting patents is neither cheap nor routine—and startups are typically founded on a sole technology. Yet San Diego’s Fallbrook Technologies ranks No. 8 on our list, with 21 patents issued in 2008, which was a decline from 31 patents awarded to Fallbrook in 2007. The venture-backed startup has more than 300 patents issued or pending for its revolutionary transmission design.

In preparing the data, IFI analyzed 2008 utility patents assigned to companies by the U.S. Patent and Trademark Office. IBM continued to top the national list in 2008, with 4,186 patents issued, and U.S. companies accounted for 49 percent of all …Next Page »

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A couple of news tidbits involving China in the past week have made me look more closely at what local startups and companies are doing to expand there. On Thursday, Seattle-based Airbiquity, a wireless communications firm focused on the auto industry, announced it has entered the Chinese market, branding itself locally as Ai Bi Ke Communications Technology and setting up an office in Chengdu. The move makes good sense, given China’s burgeoning car culture.

And yesterday, Seattle-based wireless startup Movaya announced its Chinese mobile-development team, also in Chengdu, is teaming up with PressOK Entertainment’s software teams in Russia and Belarus to develop mobile games. Ken Myer, the CEO of the Washington Technology Industry Association (WTIA), told me last month that he thinks the Chinese market for mobile games is pretty far behind the U.S.—but it could be a good time to get in on other mobile software applications.

Not sure what it all means yet, but it’s clear there’s a pattern. Chinese talent, companies, and market opportunities are becoming more embedded in the fabric of Seattle-area innovation. While the economic downturn could lead more U.S. companies to outsource jobs and services, they are also trying to tap a new global market. And on the flip side, Chinese universities and companies are looking to develop leadership roles and move up the value stream. It’s a compelling situation to watch.

A few other recent highlights:

—Bellevue, WA-based Formotus and Seattle-based Mobile Semiconductor talked to me about building relationships with strategic investors and partners in China. The mobile companies were part of a five-company WTIA contingent that toured China in October. One key takeaway was that building these relationships and understanding the market takes time and patience.

—Issaquah, WA-based McObject, a maker of data management software, has expanded in China this fall, adding a team in Beijing doing work on embedded databases. McObject, which was also part of the WTIA tour, already has a presence in the Chinese market, but is looking to accelerate its growth there.

—Oberon Media, a New York-based developer of games and platforms with a Seattle publishing office (I-Play), scored a $20 million strategic investment from Hong Kong-based Infinity Equity in October. The partnership represents a strong effort to establish an Oberon presence on the ground in China.

—It’s definitely not just about outsourcing anymore. Bellevue-based Intellectual Ventures, headed by Nathan Myhrvold and Edward Jung, has opened an office in Beijing. Its goal is to work with local universities and institutes to help commercialize inventions, as well as keep tabs on foreign competition for ideas and intellectual property. The company’s Asian expansion is being led by global technology head Patrick Ennis, who spoke with me recently.

—Microsoft Research Asia, based in Beijing, celebrated its 10th anniversary last month. The lab has become an epicenter for computer-science research in several areas, including graphics, user interfaces, multimedia, search and advertising, and now cloud computing and theory. Three of the lab’s managing directors have gone on to become Microsoft vice presidents in Redmond.

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Redmond, WA-based Microsoft (NASDAQ: MSFT) announced it has appointed Qi Lu as president of its online services group, which encompasses all of the company’s online search, advertising, information, and communications services. Lu was most recently Yahoo’s executive vice president of engineering for search and advertising technology. Before spending 10 years at Yahoo (NASDAQ: YHOO), Lu, 47, held positions at IBM, Carnegie Mellon University, and Fudan University in China. He starts at Microsoft on January 5, and will report directly to CEO Steve Ballmer. On the way out is Brian McAndrews, former CEO of aQuantive and senior vice president of Microsoft’s advertiser & publisher solutions group, who will serve as a consultant to Ballmer and Lu over the next few months.

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