After previewing its expansion plans last summer, San Diego’s EvoNexus, the free startup incubator established by the non-profit technology group CommNexus, has opened a newly renovated downtown office space. A dozen early stage companies began moving into the incubator Monday.

CommNexus founded EvoNexus in 2009, when San Diego’s innovation economy was reeling from the Great Recession. The incubator has taken in 14 companies so far, including six that have moved out of the EvoNexus incubator in University City. Office space, utilities, and other services are provided to startups free of charge, and companies leave with no obligations to EvoNexus or CommNexus.

“As far as we know, we’re the only pro bono incubator in the country,” EvoNexus chairman Kevin Hell says in a statement issued late yesterday. “The goal is to grow sustainable tech companies and expand the industry here in San Diego.”

When the EvoNexus incubator first opened in Sorrento Valley, organizers said they wanted to host startups developing advanced communications technologies, including wireless life sciences and smart grid networking.

Since then, CommNexus moved EvoNexus to University City and broadened its criteria. The industry group established the new downtown EvoNexus to host startups that are focused primarily on developing Internet software, Web services, gaming, social networking, and cloud computing technologies. The privately held Irvine Co. made the 15,000-square foot space available to EvoNexus at no cost. The incubator takes up an entire floor of the building at 101 W. Broadway, known locally as the AT&T building.

Hell says he sees parallels in the downtown San Diego locale with San Francisco’s SoMa, the downtown neighborhood South of Market Street that has become a magnet for social media startups and mobile app developers. The nightlife, housing, and amenities available in San Diego’s city center should appeal to young entrepreneurs, Hell says.

CommNexus plans to continue to operate its incubator in University City. The 12 companies in the new downtown space are:

Antengo: Real-time mobile classifieds.

BigSho: Social webcam game show.

Chatmeter: Online reputation management.

Fashioning Change: Shopping experience for eco-friendly apparel.

Saambaa: Social media app for finding things to do.

SwoopThat: Online textbook shopping by course.

TapChow: Cloud-based restaurant experience manger.

Taphunter: Mobile app for locating places that serve craft beer.

UgliApps: Mobile apps focused on food.

Voluware: Saas healthcare information software.

Xpenser: Web-based tracking of business expenses, time, and mileage.

Zambig: Web-based service that provides online outlet for radio ads.

Comments | Reprints | Share:          

In the spring of 2010, at a small startup in Seattle, some online gaming veterans were ready to send their latest creation into the world. It was a blackjack game for Facebook, fully legal because players couldn’t cash out their virtual chips.

With much better production values and an ability to play with other users, they thought it would stand out among a sea of gambling-style games on the social network. But that was just a theory.

So the fledgling company, Double Down Interactive, turned on its marketing campaign with some ads on Facebook. It was like flipping a money switch—users started showing up, and dollars started flowing.

“Not just a return, but a positive return on our ad buy, in the same day,” Double Down co-founder and CEO Greg Enell says.

Greg Enell

The average Facebook game today, Enell says, makes about two or three cents per daily active user. Within just a few weeks, Double Down’s blackjack game was pulling in “upwards of 35 cents per daily active user,” he says.

“At that point we realized, ‘Wow, we’re on to something. This will work. And if we can aggregate a large enough audience, this will generate a ton of cash.’ It was incredible,” Enell says.

“We were hopeful and optimistic that we could generate positive cash flow from it right away, but did I really think that would happen? No.”

That first blackjack game cost right around $1 million to produce, money that came from Enell, co-founder Cooper DuBois, and one unnamed investor, who I’m still trying to track down. Last week, Double Down Interactive announced its pending acquisition by slot-machine maker International Game Technology in a cash deal that could be worth up to $500 million.

That’s one hell of a return on investment, in a short period of time, even in the world of high-growth tech startups. Enell notes that Double Down repeatedly poured money back into the development of new games and improving the infrastructure after the debut of blackjack, “doubling down” themselves several times (hence the name).

By the time the company sold, its app was attracting about 1.4 million daily active users and 4.7 million monthly active users, according to independent numbers from AppData. Revenue figures are hard to come by for the private company, but it appears to be raking in the dough.

AllThingsD reported in October that unnamed sources had pegged DoubleDown Casino’s daily revenue at $140,000. Those numbers are thought to be “much higher now,” Deutsche Bank Analyst William J. Lerner said on a conference call with IGT executives (IGT didn’t address the analyst’s revenue assertion directly).

Enell wouldn’t say how much Double Down is making now, and declined to answer when I asked if the 35 cents figure had held up with the app’s growth in daily active users. But Enell did point out that Facebook listed DoubleDown Casino as its No. 4 game of 2011, a ranking that took into account audience, revenue, and positive reviews from users. Those last two factors helped Double Down’s game come in ahead of other games with audiences two or three times larger, Enell notes.

“We believed in it and we wanted to control it and own it outright, and didn’t want to bring any significant external capital into it,” Enell says. “And we got lucky.”

Their next step could be even bigger. If the sale to IGT (NYSE: IGT) closes as expected, Double Down Interactive will lead its new parent company’s efforts in social games, which don’t put real money or prizes at stake because online gambling is still in a legal grey area in the U.S. But the ability to move into real-money wagering is a tantalizing one, particularly since the U.S. Justice Department recently dropped the legal basis for its previous objection to online gambling.

In a conference call discussing the Double Down purchase, IGT chief executive Patti Hart said there was money to be made either way—the quick rise of Facebook gaming leader Zynga into a money-generating machine is evidence of that.

“This acquisition was analyzed and entered into assuming no change in legislation in the U.S. around legalized online gaming, including poker,” Hart said, according to a transcript provided by SeekingAlpha.

“I don’t think the company would take a $500 million wager—no pun intended—on a change in U.S. law,” says Behnam Dayanim, a lawyer who specializes in Internet gambling regulations. “It has to be that they’ve determined that this makes sense regardless of what happens” with U.S. gambling regulations.

But at the same time, IGT sees a future where fake-money gambling exists alongside serious online wagering, and maybe some other business models. “The ability to come into your online gaming world and play with virtual currency, or real money, or playing a subscription model, is likely the model that will be successful going forward,” she said.

Double Down is happy to help make that kind of future a reality. The whole idea behind the company was that legalized online gambling was coming to the U.S. by 2014, Enell says, and that the first companies to amass a sizable audience on the Facebook platform would be the ones to reap the benefits.

“They have a tool here through our virtual currency system whereby we can aggregate a huge audience—arguably the largest gambling audience in the world. And then, as pockets of real-money [gambling] pop up, that audience can be essentially cross-sold into real money and be just incredibly valuable,” Enell says.

“We’re working with Facebook and hopeful that we can launch some Facebook real-money products that would be powered by IGT’s back end and our social front-end, if you will—kind of marrying our technologies to be able to go into real money gambling in Europe,” he says. “It’s a tremendous opportunity.”

Comments | Reprints | Share:          

Heading into the holiday weekend, I thought I’d pull out a few highlights from recent discussions I’ve had with some Boston-area tech companies that are generating buzz. None of them will be taking the holiday off, I’m guessing.

So here’s a snapshot of five companies in different fields, and at different stages (with some common themes of communication, security, and location tech):

ByteLight
This is a new Cambridge, MA-based startup that’s heading to New York this weekend for the big annual National Retail Federation expo. ByteLight, led by founders Aaron Ganick and Dan Ryan (both Boston University grads), is developing technology for indoor positioning based on the circuitry in LED bulbs, together with smartphone cameras, for applications in sales automation, targeted deals, museum tours, and so on. “We view this as the next frontier in location based services,” Ryan says.

HeyWire
This Cambridge-based mobile startup makes an app for free texting and social messaging. But HeyWire has much bigger ambitions around creating a unified platform for social communications. Don’t want to give too much away here, but as engineering and marketing VPs Bill Gianoukos and Glenn Kiladis told me recently, an upcoming release from the company was inspired by the question, “How do we get Bieber to text us?”

Rapid7
This security assessment software company, based in Boston, recently raised a big $50 million venture round and is growing fast—and looking to make acquisitions. Rapid7 has well over 200 employees, and CEO Mike Tuchen says he is looking to add 100 more this year. One security tidbit he passed along: Many companies’ video conferences are surprisingly easy to hack into, because they put them directly on the Internet without security.

The Tap Lab
This Cambridge-based mobile gaming startup is working on its much-anticipated next release, which is still under wraps (but looks like it’s trying to reinvent the concept of location-based gaming—no pressure). In the meantime, CEO Dave Bisceglia is also working on a project to “increase the frequency and quality of hackathons” in Boston, he says. Stay tuned for more on this.

Vivox
This voice and communication software firm, based in Natick, MA, has been making strides through partnerships with T-Mobile and Facebook. Vivox, best known for its voice chat software that lets gamers and virtual world inhabitants talk to each other, is now applying its technology to the broader markets of social networking and messaging (see T-Mobile’s recent Bobsled voice chat app). CEO Rob Seaver told me that his company’s platform is “very scalable and stable for large-scale social interactions.” What’s more, he says, the fields of gaming and communication are “not that separate.”

Comments | Reprints | Share:          

Back in 2008, when Edmodo co-founders Nic Borg and Jeff O’Hara were still working in IT for Chicago-area school districts, they noticed a big problem. Teachers were increasingly trying to bring Web tools into the classroom, but they didn’t have a safe and secure way to collaborate with students online. (Clearly, Facebook wasn’t an option—and still isn’t.) Drawing on the free space in their garages and the money in their pockets, Borg and O’Hara created Edmodo, a social network that allows K-12 teachers to interact and share resources with their students over the Internet.

Now, three years later, the San Francisco-based company has connected approximately 5 million students and teachers globally. And in December, marquee investors Greylock Partners and Benchmark Capital showed how much they liked Edmodo’s product by shelling out $15 million in Series B financing. (The company’s other backers include LearnCapital and Union Square Ventures.)

Edmodo co-founders Jeff O'Hara (left) and Nic Borg

It was a big validation for the company, which has created a social network that teachers can use to assign homework, create quizzes, share materials and lesson plans with each other, and communicate with students in the same way that they communicate with their friends. The education-specific network doesn’t come with the same distractions that others have (FarmVille, friend updates, gossip) and it keeps its members in a closed community. “Edmodo is really built around the teacher-student relationship and what a classroom is,” Borg says. “There are a lot of roles in a social network when you look at the education side of things, and Edmodo really captures that.”

The company is part of a larger crop of Web startups working to create new management tools and facilitate communication in K-12 schools, among them San Francisco’s LearnBoost and education incubator Imagine K12′s Class Connect and Goalbook.

In early versions of Edmodo’s network, the emphasis was on sharing with students, but Borg says it wasn’t enough. Both he and O’Hara were working with teachers daily—the two met because O’Hara’s wife was Borg’s high school biology teacher—and Edmodo quickly received requests from teachers wanting to be able to connect with each other, not just their students.

“This group of teachers came on board really early and helped shape the product,” Borg says. “They’ve driven it from day one up to this point.”

Because of their feedback, the Edmodo service has evolved so that teachers can connect with each other, notify students of overdue homework, award badges for merits like good attendance, and even contact parents through the network.

Educators have also frequently asked for more ways to motivate their students. “The digital rewards have had an amazing impact,” Borg says. “Teachers clamored to create more and more badges.”

For Edmodo, it’s been particularly important to take the product directly to teachers, as opposed to … Next Page »

Comments (2) | Reprints | Share:          

According to Bobby Ghoshal, the future of news consumption is in finding new ways for users to interact with content and influence other users’ reading habits, and the development of online “news personalities.” Ghoshal is the co-founder and CEO of Flud, a news aggregation app that unveiled its updated platform for the iPhone and iPad earlier this month. (The Android version is set to launch in January.)

With Flud, everyone has the potential to become a news source,” Ghoshal says. “It’s all about taking consumption and merging it with social networking.”

Flud’s new platform allows news enthusiasts to create their own news profiles, recommend content to their community, discover new information and sources from friends, and to build information networks around key interests. The San Diego-based startup recently received funding from Detroit Venture Partners and Detroit-based Ludlow Ventures.

What Flud aims to create is a sort of meta aggregator, where users are curating content to create individualized aggregation sites within the larger Flud ecosystem. If that sounds daunting to a novice, Flud has also created a “hit list” of content Ghoshal and other members of the Flud team consider especially worth reading. (For example, I discovered during my interview with Ghoshal that Xconomy is on that list.)

Flud thinks of its content as having three tiers. Tier 1 belongs to the publications that are ubiquitous at news stands: Time; Cosmo; Sports Illustrated. Tier 2 is the place for niche blogs that are widely read—think TechCrunch or Perez Hilton. Tier 3 is the home of blogs that may not be household names, but that have enough of a readership to stay relevant in the market.

Tier 3 is where Ghoshal sees a big opportunity with Flud users. The new platform includes a feature that allows users to see who else is reading an article at the same time they are. (Ghoshal calls it “serendipitous news discovery.”) Ghoshal is hoping that users will be pleasantly surprised to see 20 or 30 other people reading the same cult-favorite blog they are, and that will lead them to reach out for additional content recommendations.

Other new features in the updated platform include a Flud button, which allows users to endorse high-quality content; an activity feed to track what’s trending inside a user’s news circle; the ability to push content out to Tumblr and connect to Facebook, Twitter, Google Reader, Instapaper, and Read It Later accounts;  and synching across devices so that a user’s “news legacy” follows them from phone to tablet and vice versa.

It was the popularization of the tablet computer, Ghoshal says, that inspired he and Matthew Ausonio to found Flud in the first place. “The tablet was intriguing, and we guessed that using them to read news would be huge,” he says.

The initial app was launched in August 2010, but Ghoshal describes those … Next Page »

Comments | Reprints | Share:          

Put high-quality cameras into devices with broadband wireless connections. Add powerful smartphone operating systems like iOS or Android and app-store ecosystems like iTunes and the Android Market. Mix in some sloth and disinterest on the part of established photo-sharing destinations like Flickr, Facebook, and Twitter.

Under these conditions, it was probably inevitable that entrepreneurs would create a slew of new mobile photo-sharing startups like Instagram, Picplz, and Path. Instagram, with somewhere north of 12 million users, seems to be the winner in this space so far; it’s getting smartphone owners used to the concept of snapping photos on the go, applying optional faux-vintage filters, and sharing instantly on Twitter, Facebook, Flickr, Tumblr, Posterous, or Foursquare.

Now comes the next logical step: video sharing apps and startups. All of the latest smartphones shoot high-definition video as well as photos, but so far, Instagram doesn’t let users share video clips—at least, not yet. That’s created room for even newer iPhone apps like Socialcam from Justin.TV, Vlix from Spotmixer, and Klip, from the Palo Alto, CA, startup of the same name.

All of these free apps let users record and edit short video clips and share them with friends. None have a gigantic following yet, and I don’t know which one will dominate. But if the contest were being decided on sheer elegance, the winner right now would be Klip.

I sat down recently with Alain Rossmann, the veteran computing and mobile entrepreneur behind Klip, and got a tour of the app and a glimpse of the thinking behind its design. (See the video below.) If there’s a single theme that differentiates Klip from the other video sharing apps, it’s Rossmann’s obsession with refining the user-experience details.

That’s a skill he says he began to develop at Apple, where he was on the marketing team for the original Macintosh in the early 1980s. One thing Rossmann says he learned from Steve Jobs—whose “genius was there even then, but also the difficult side”—was that “the last 10 percent of refinement gets you 90 percent of the market share.” Which explains why Klip includes seemingly obscure but aesthetically important features like face detection—to make sure that the profile photo that shows up alongside your uploaded videos is cropped properly. “When you see your friends, you want to see their face,” Rossmann insists. “To get that on a phone with retina-display resolution, you have to do face detection.”

Here’s a short video of Rossmann demonstrating Klip. Story continues after video.

Rossmann has five startups under his belt prior to Klip. Three went public, and two were acquired. That’s “more than any one man, or his wife, should have to bear,” he jokes. But he can’t seem to resist.

After Apple, Rossmann co-founded Radius with a group of other Macintosh team alums; the company made graphics cards and external displays for the Mac. Next came C-Cube Microsystems, which built the first chips for handling MPEG video compression. EO, which made a pen-based wireless communications tablet (like the iPad, but about 16 years ahead of its time) was next. Then there was Unwired Planet, which helped give birth to the Wireless Access Protocol for Web browsing on feature phones and ultimately morphed into OpenWave (NASDAQ: OPWV). And finally there was … Next Page »

Comments (1) | Reprints | Share:          

[Corrected on 10/19/11 at 4:45 pm. See below.] Miguel Yeoman—known as the artist BeloZro and, now, as cofounder of the startup company BeloZro Visual Energy—was born and raised on Detroit’s hardscrabble east side. As he tried to stay out of trouble in 1980s Detroit—an extraordinarily violent period in the city’s history—he found his way to boxing, and then to art.

He spent a decade working on the line in local factories until he finally mustered the courage to try to make a living off his craft. He moved to Los Angeles and found limited success—a fairly big gallery show, but also an attorney who swindled him out of a quarter-million dollars. So, in 2008, back to Detroit he came.

“I came back with my tail between by legs,” he says. “I left Michigan for a reason, but I got my ass beat by the business.”

Shortly after returning to Michigan, he hired a business manager who also happened to work at Chrysler. It was the manager’s idea that Yeoman should do a painting to counteract the mounting bad press that the Big Three were getting as they sped toward bankruptcy. Yeoman came up with a conceptual sketch that showed all three Motor City automakers as a unified front.

“It was sort of a Detroit against the world type of thing,” Yeoman says.

He spent three days turning the sketch into a painting and then showed it to his business manager, who began pitching it to executives at Chrysler. The idea was that Yeoman would donate the piece to Chrysler in exchange for wall space, publicity—anything to get the struggling artist’s name in people’s mouths. Instead, the painting made it all the way up the Chrysler chain of command to vice-president of manufacturing and engineering Byron Green, who loved it.

“My manager called me and asked me if I was sitting down,” Yeoman says. “I was expecting more bad news but instead, he told me Chrysler was prepared to offer us $1.8 million for the painting.”

Chrysler proposed to buy the piece, but wanted Yeoman and UAW president Ron Gettlefinger to present the painting to President Obama as a thank you for his support of the bailout plan and … Next Page »

Comments | Reprints | Share:          

If you’re like me, you do a lot of research online before you make a big buying decision, and sometimes even before a small one. And you lean heavily on the reviews left by other shoppers. My favorite trick, when I’m zeroing in on a specific product, is to read all of the “1 star” or “most critical” reviews first. It’s a surefire way to find out about product glitches, misleading advertising claims, or poor customer service.

In fact, I’d say that the explosion of user-contributed reviews around the Web is one of the three biggest developments benefiting consumers in the e-commerce era (which dates back to mid-1995 or so, when Amazon first turned on its website). The other two are the rise of comparison shopping, which keeps prices in check, and the simple-but-still-amazing fact that you can click a “Buy” button on a website and make a book or a game or a DVD appear on your doorstep without ever leaving home. If you think about it, though, e-retailers themselves haven’t innovated that much around reviews. A review on Amazon today looks and acts pretty much like a review on Amazon in 2002.

But there’s one San Francisco company, PowerReviews, that keeps working to make reviews more useful for consumers and more profitable for e-retailers. I spent some time recently with Andy Chen, PowerReviews’ founder, and learned a lot about how the company sees the world of product research—and what it’s learning that could change the experience of shopping online.

Andy Chen, PowerReviews Founder

Chen says that when the company got started back in 2005, it had two interlinked ideas. The first was that a lot more e-retailers needed customer reviews on their sites, and that it might be profitable to build a white-label review system that companies could plug into their sites rather than having to build the functionality on their own. The second idea was that if you could build this system, it would then be possible to aggregate all of the reviews collected by all of the participating e-retailers into one giant product recommendations site, and use that site to earn money on lead generation and affiliate commissions. That’s exactly what PowerReviews has done with its sister site Buzzillions, which brings together a good chunk of the 23 million reviews sent in by customers of Power Review’s clients. That, by the way, is a group of almost 6,000 companies, including many high-profile bricks-and-mortar brands like Toys R Us, Staples, and REI.

PowerReviews has had to tweak its ideas along the way. It originally provided the review system to e-retailers for free, but the Buzzillions site didn’t turn out to be as profitable as the startup had hoped. So the company had to start charging for the review platform, just as competitors like Austin, TX-based BazaarVoice do. The good news is that “we’ve been growing extremely quickly” on the platform side, while Buzzillions is “still a good revenue source,” according to Chen, whose formal title is Founder and Vice president of Strategic Partnerships. (Pehr Luedtke, a veteran of Shopping.com and Levi Strauss, is PowerReviews’ CEO.)

With some $37 million in venture capital on the line from Menlo Ventures, Tenaya Capital, Draper Richards, Four Rivers Group, and Woodside Fund, PowerReviews needs all the growth that it can get. To speed things up, and to compete with e-commerce juggernaut Amazon, the startup has been trying new strategies like getting consumers to answer each other’s questions about products (that’s a feature called AnswerBox) and integrating the review platform with social media, especially Facebook.

But one of the company’s biggest opportunities, Chen says, may not lie in the reviews, exactly, but rather in what he calls “social navigation” based on all the data PowerReviews collects about the reviews and the reviewers. By analyzing what products people are … Next Page »

Comments (1) | Reprints | Share:          

It took enterprise social networking startup Yammer 18 months to gain its first million users, nine months to add its second million, and only six months to add its third million. At that rate of increase, according to my calculations, the startup will have 20 million users by late 2012, and 7 billion by 2014.

Okay, I’m joking about the 7 billion part—there aren’t quite that many people yet on Earth, and not even Facebook has figured out how to serve people who don’t yet have computers or smartphones. But considering how many people do work in wired, knowledge-based enterprises around the world—about 500 million—”the addressable market is enormous,” says Yammer co-founder and CEO David Sacks. “We are in 160 countries, and we are just getting started.”

If you aren’t an employee at one of the 100,000 businesses using Yammer, the freemium Web-based platform will look familiar to you anyway, as the central news feed—where employees can post status updates, links, videos, photos, documents, and other materials—is unapologetically modeled after the same feature at Facebook. Yammer is hardly the only imitator out there; Podio, Jive Software, SuccessFactor’s Jam, Salesforce.com’s Chatter, and other enterprise social networking entrants take the same approach. Here, as in other areas of enterprise software being transformed by the “consumerization” wave, the goal is to help employees feel at home, not to make them learn yet another new user interface. But one big difference, as Sacks explains, is that each instance of Yammer is private to a specific company, meaning that only people with a corporate e-mail address can log on.

The core insight at the San Francisco-based startup—the first to bring a social networking product to businesses, back in 2008—is that the Facebook-style news feed is a great medium for collaboration inside a company, as long as what happens in the network stays in the network. For a boatload of reasons, from protecting confidential information to complying with regulatory requirements, “internal and external networks should be completely separate,” says Sacks, who got his start in business as chief operating officer at PayPal. “You can toggle between them, but content can’t bleed from one to the other. We think it’s very important to be clear about where content lives.”

Yammer has 200 employees and recently raised $17 million in a Series D venture round led by Chamath Palihapitiya, a former Facebooker with a new venture fund called the Social+Capital Partnership. Previous investors Charles River Ventures, Emergence Capital, and US Venture Partners also participated in the round, bringing Yammer’s total venture pot since its founding to $57 million. The company has had a big year—embarking on a major integration with financial management software provider NetSuite; introducing new applications for desktop PCs, iOS devices, and Android devices; landing big customers like Ford, Shell, and 7-Eleven; and extending its platform to work with applications from Microsoft and Salesforce.com.

So I thought it was about time to sit down with Sacks for the trademark Xconomy interview, delving into how the idea for Yammer evolved, why the company went with a freemium business model, and how Sacks plans to keep the company on top in the enterprise social networking business, which is an increasingly competitive one. You probably didn’t know that Yammer is a spinoff of Los Angeles-based genealogy site Geni, or that Sacks took a spin in Hollywood, financing and producing the 2005 satire Thank You for Smoking, starring Aaron Eckhart. But as I learned, there are many sides to Sacks, who’s both understated and as intense as you might expect of a PayPal alum; both self-effacing and prone to cutting remarks. For example, he says it would be easier for growing companies to find software engineering talent in Silicon Valley if “fewer stupid ideas were getting funded.” Here’s a trimmed-down version of our conversation.

Xconomy: You were at PayPal in the early days. Can you talk a little about your history as an entrepreneur before that, and the steps that led to Yammer?

David Sacks: The short answer is there was not very much history. I had been an undergraduate at Stanford and knew Peter Thiel. I was 27 when I joined PayPal as the chief operating officer, and I was 30 when we sold it to eBay. So it was not like I had a tremendous amount of experience.

Subsequently to PayPal, I created another company called Geni, and we spun Yammer out of that. Yammer was invented as a tool inside of Geni. We started using it to … Next Page »

Comments | Reprints | Share:          

“Meebo has a culture of doing what we call ‘big swings at bat’ every 12 to 18 months,” Seth Sternberg is saying. “We try something new, a hard project that’s highly innovative. And either it’s going to flame out wildly, or succeed wildly. If it works, great. If not, oh well, it was an experiment. It keeps things interesting.”

I’m meeting with Sternberg, Meebo‘s CEO, at the company’s San Francisco office, opened recently to accommodate the dozens of engineers and salespeople who prefer not to drive to the startup’s Mountain View headquarters. He explains that he and his co-founders Sandy Jen and Elaine Wherry started the Web messaging and content sharing service back in 2005, so they’ve had time to try four or five of these big swings. The most ambitious one before this year was probably the 2008 launch of the Meebo Bar, a strip of ads and social-sharing buttons that Web publishers can add along the bottom of their Web pages. Before the bar, Meebo had been known primarily for its Web-based instant messaging service, which allows users to communicate across AOL Instant Messenger, Yahoo, Facebook, Windows Live, Google Talk, ICQ, and other IM networks without firing up actual IM software. The new bar included those functions—but far more important for the company, it carved out a valuable piece of screen real estate that Meebo could use for advertising and other features.

When you hover your mouse cursor over the ad at the left end of the Meebo bar, a multimedia ad appears on screen, often showing video spots. Today at Seventeen‘s website, for example, you can select from videos about Virgin America or the new Mini Coupe. Rich-media advertising launched from the Meebo Bar now brings in the lion’s share of the company’s revenues, which have tripled in the last year. Sternberg says 80 million unique users per month see the bar, and that 0.8 percent of them click on the ads. While that may sound low, it’s actually about 10 times the industry average for Web display advertising—and what’s more, the average ad viewer spends 60 seconds looking at the ads, twice as long as a typical TV commercial. No wonder 200 brands, like Starbucks, LG, Samsung, Toyota, Procter & Gamble, and Unilever, have signed up to advertise through Meebo’s network.

Meebo CEO Seth Sternberg

Now Meebo is at bat again, and Sternberg is hoping that its next hit will go equally far. The company is adding a “check-in” button to the Meebo Bar. The term comes from mobile social networks like Foursquare, Gowalla, and Facebook Places, and the concept is similar, except that Meebo check-ins are tied to the Web, not a physical location. When you check in at a website such as CafeMom, a record that you visited is added to your Meebo profile, so that your Meebo friends and followers can see where you’re hanging out online. By following other Meebo users who check in at your favorite sites, you can find new sites that might interest you. If you check in enough times at one site, you can become a VIP (Meeboese for mayor) and earn rewards.

The buzzword for all this is “social discovery,” but Sternberg puts it more plainly. “Meebo lives at the intersection of content and people,” he says. “We do a lot of research, and it turns out that people really want to learn about sites from other people. So when we were thinking about check-ins, we were thinking about how to hook up people with similar interests, and how to use that to make navigation easier.”

But there’s another motive too. Every time users click on the check-in button, they’re telling Meebo something about their interests—and that’s information the company could use to serve targeted ads, which typically have higher price tags. “If you look at the Web check-in stuff, at some level that is about delivering better brand content to users,” says Sternberg. “If we know you are really into road cycling because you have been checking into a lot of road cycling sites, it would be great to put an ad for Trek [the high-end bicycle maker] in front of you.”

Meebo certainly needs to sell more premium ads, because as fast as it’s growing—it passed 200 employees this summer, more than a quarter of them just hired this year—it has some very high expectations to meet. Over the last six years, … Next Page »

Comments | Reprints | Share:          

When New York startup Sonar rolled out the latest version of its networking app on Sept. 15, it included for—the first time—data from LinkedIn. Now armed with contact information gleaned from a business-oriented social network, Sonar’s app is trying to attract more professionals to the ranks of its users. This is the latest competitive move in the war to make social connections more useful and mobile.

Sonar’s CEO and founder Brett Martin says his company, which has raised a seed round with undisclosed backers, has helped make more than 60,000 introductions since its app was released in May at TechCrunch Disrupt NYC.

Meanwhile Pearescope, another New York-based startup, is preparing to release its similarly-themed app this fall, according to CEO and founder Whit Schrader. Pearescope has also raised seed funding, but Schrader declined to reveal who his backers are.

Connecting professionals with new clients, potential hires, and other opportunities may elevate such social-contact apps from novelties to real-world business tools.

While other apps are available for keeping track of contacts, Sonar is among the first that’s aimed at introducing users to relevant new connections in person. The addition of LinkedIn data, Martin says, can make the app particularly useful for networking.

Users of Sonar are introduced to potential contacts based on their mutual connections. Through Foursquare check-ins, Sonar alerts the users to people in the area they are connected with on Facebook, Twitter, or LinkedIn. Sonar’s app is currently available for the iPhone but … Next Page »

Comments (2) | Reprints | Share:          

One of the most persistent criticisms of Facebook is that it’s trying to build a “walled garden” analogous to AOL’s dialup service in the 1980s and early 1990s. Blogger Jason Kottke said it in 2007. Tim Berners-Lee said it in Scientific American in 2010. Google’s Vint Cerf revived the meme earlier this week at an event organized by the U.K.’s Guardian newspaper: “You can’t stay locked into a closed environment for very long before people will start demanding that it open up so that it becomes more interoperable with everything else,” Cerf said.

The tech blog VentureBeat repeated the hoary accusation in a September 20 article about the Wall Street Journal’s new Facebook app, which highlights the articles your friends are reading. “New Walled Garden,” VentureBeat labeled the WSJ app, presumably because it lets users read articles from the newspaper from within Facebook, without ever going to the WSJ website. The delicious irony here is that VentureBeat’s article begins with a prominent Facebook “Like” button (it’s got more real estate than the Google +1, LinkedIn, and Twitter buttons combined) and ends with a Facebook social plugin showing thumbnail images of Facebook users who’ve Liked VentureBeat. If Facebook is a walled garden, there sure are a lot of players on the Web who want to get in.

But the truth is that the walled-garden trope was never very accurate: Facebook is a child of the open Web, and the company focuses on HTML-based delivery technologies almost to the exclusion of alternatives such as native mobile apps. And with this week’s announcements at f8, Facebook’s annual developer conference in San Francisco, the charge that Facebook is a closed environment rings even less true.

Forget about “Timeline,” the redesigned Facebook profile format that everyone is buzzing about; it’s pretty, I like it, and I’ll have more to say about it later, but the real news at f8 was about the coming expansion of what Facebook calls the Open Graph. This overhaul isn’t simply going to change how people spend time inside Facebook; it’s going to make it easier to find and share information across the digital universe. The changes will cement Facebook’s role as the default social fabric weaving together everything else on the Internet. And I think they herald an important redistribution of power within the triumvirate of Silicon Valley companies—Google, Apple, and Facebook—that currently dominate many people’s digital lives.

The crowd at f8 awaits Mark Zuckerberg's keynote talk.

Open Graph is the protocol that makes outside Web pages recognizable to Facebook’s infrastructure. When you click on a Like button at VentureBeat, Xconomy, or thousands of other sites, you’re using Open Graph to tell Facebook that it’s okay to publish updates about that site on your profile. Facebook said yesterday that it’s handing developers the ability to define new Open Graph actions and objects, which means the range of updates that sites and apps can send to Facebook is about to get a lot broader.

To quote from Facebook CEO Mark Zuckerberg’s f8 keynote talk:

“Facebook’s mission is to make the world more open and connected. We do this by mapping out all of the things you are connected to…As a first step toward this we made it so you could connect to things by Liking them…This year we are taking the next step, so that you can connect to anything you want in any way you want. Now you don’t have to Like a book, you can just Read a book. You don’t have to Like a movie, you can just Watch a movie. You can Eat a meal, Hike a trail, Listen to a song, and connect to anything in any way you want. This will let you make an order of magnitude more connections than before. We are helping to define a new language for people to connect.”

Facebook is taking this “new language” idea quite literally. As Zuckerberg explained, the first iteration of Open Graph allowed lots of subjects and objects, but only one verb: Like. Now it’s letting outside developers add lots of new actions: “Mark reviewed a restaurant.” “Mark completed a 6.5 mile run.” “Mark listened to ’21 Guns’ by Green Day.” By dropping the right code into their website, Facebook apps, or mobile apps, developers can now cause almost any action to be published to their users’ Facebook profiles. And thanks to some additional changes, these sites and apps won’t have to … Next Page »

Comments | Reprints | Share:          

Funny, I thought there were already enough startup events around the Bay Area to keep any investor or tech journalist busy eight days a week. But now there’s one more—it’s called Pitch, and it’s the result of “the challenges many startups have in getting new users, media, attention, and investors,” writes Duane Nason of Launchabl.es, the event’s organizer. “Many demo events are either too pricey, or they allow only a handful of startups to participate.”

Way more than a handful of companies—I counted about 90—were on hand at yesterday’s debut Pitch event, which took place on the club level at AT&T Park, home of the world-champion (and now sagging) San Francisco Giants. Many of the startups were speaking in public for the first time about their technologies and services. Reflecting the current obsessions in the world of consumer technology, the event was heavy on startups offering mobile, social, or location-based apps and services (sometimes all three at once).

I attended with iPad in hand to capture a few of the startups on video. Below you’ll see elevator pitches from the following seven companies:

CheckInOn.me—A mobile, personal safety system that automatically checks in on members via text message. Debbie Levitt, Co-Founder.

Shwinkers—A social network for barhoppers. Patrick Clifton, Co-Founder and President.

SourceN Ventures—A startup incubator launched by San Jose design agency SourceN. Ajay Ramachandran, Managing Partner.

Wobblesoft—Maker of a Herd!, a mobile app that lets users assemble instant, temporary social networks. Marcus Colombano, Chief Marketing Officer. (Full disclosure: Colombano was a colleague of mine at e-book device maker NuvoMedia from 1999 to 2001.)

Doot—A location-based mobile app that lets users leave messages that other users can discover when they visit the same places. F.S. Narooddin, Co-Founder and Chief Technology Officer. [Update 9/10/11: Attendees voted via text message for their favorite startups at Pitch, and it turns out that Doot won the People's Choice MVP Award.]

LawPivot—A Google Ventures-backed startup offering crowdsourced legal advice for startups and other businesses. Benton Wong, Business Development Manager. (More Xconomy coverage here.)

LocalMind—A location-based question and answer service that lets users pose questions to people who have checked in at specific locations via Foursquare or Facebook Places. Beau Haugh, Co-Founder.

Comments (3) | Reprints | Share:          

Wade Solomon is an Information Technology project manager for General Electric, an adjunct faculty member for the University of Phoenix in Information Systems and Technology, and an instructor at Kaplan University. In his spare time, he speaks at conferences teaching teens the fundamentals of video game development and animation using an application called Scratch. He also volunteers his time to teach Web development techniques to teens.

Solomon is also a member of a growing new social networking site for African American men and teens in Detroit called Black Male Engagement, or BME (pronounced “Be me”). There’s just one catch: In order to join the network, you share the story via video or text of what you’re doing as a leader in your community to make it a better place. A pilot program happening in Detroit and Philadelphia, BME’s long-term goal is to attract more than 1,000 members and to replicate in other cities.

“In Detroit, we noticed a vibrant, engaged community of black men and boys, in particular, that were doing big and small things to better their community every day,” says Rishi Jaitly, who directs grant making in Detroit for the John and James L. Knight Foundation, which funds BME. “We thought, what if we created an easy way for people to recognize this city’s assets and self-identify as leaders? Facebook has cultivated our friendship identity. With BME, we’re trying to cultivate leadership identity by making it appealing and socially credible.”

BME came into existence after the Knight Foundation did some research about what motivates community engagement in Detroit. It found that people are driven by recognition and the idea that they’re already part of a community well-stocked … Next Page »

Comments (2) | Reprints | Share:          

More than 1,100 experts who analyze “Big Data” are gathered in San Diego today for the industry’s major conference on “Knowledge Discovery and Data Mining” (KDD). The registered attendance is a 22 percent increase over the 900 who attended last year’s KDD conference in Washington D.C.

“In this field, at least, we’re experiencing a recovery,” says Joe Milana, the global head of analytics at Opera Solutions, which was founded as a consulting firm in 2004 and has developed a specialized focus on helping big companies use predictive analytics. When the economy crashed in 2008-09, Milana says a lot of companies eliminated their data analytics services as part of their overall cost-cutting efforts. By 2010, however, he says the analytics industry was experiencing a recovery as financial institutions and corporations realized the growing importance of identifying customer trends and user patterns in the deluge of data that gets generated daily.

Opera Solutions, based in New York and Jersey City, NJ, has been a beneficiary of this resurgence, Milana says. While the company has about 550 employees worldwide, Milana heads the company’s San Diego-based analytics business—which had five employees three years ago, and has doubled its headcount to more than 70 employees in the past eight months.

“There’s this niche in machine learning, where San Diego is the place to be, and our company explicitly moved to San Diego to tap into it,” Milana says. Among the U.S. cities with technology clusters focused on software analytics, he estimates that San Diego ranks third—behind Silicon Valley, with its regional expertise in search engine applications, and the New York area, where Wall Street’s financial sector has a seemingly insatiable appetite for data mining and analytic technologies.

The focus of San Diego’s analytics and machine learning community seems to extend beyond search applications, and is focused more on Main Street than Wall Street. Many local companies are focused in various ways on helping big businesses take advantage of the terabytes of data being generated by their customers each month. More than 100 companies in the San Diego area are working on predictive analytics, Milana says, making predictive analytics one of the few cohesive communities in San Diego’s fragmented software industry.

Opera Solutions sees … Next Page »

Comments | Reprints | Share:          

In New York, the name Leona Helmsley often evokes snarky jokes about Trouble, the pooch who inherited $12 million in 2007, when the hotel heiress known as the Queen of Mean died. So it might be a surprise to many New Yorkers to learn that Helmsley and her husband, Harry, set up a charitable trust in 1999—a fund that in the last 10 years has devoted more than $85 million to research into Type 1 diabetes. One of the newest projects to emerge from the Helmsleys’ largesse is T1D Exchange, a Boston-based clinical registry that’s designed to unite diabetes researchers and patients.

This fall, T1D Exchange will launch its most visible platform yet, a social media site for patients called Glu. The site will serve as a sort of Facebook for the diabetes community—a place where patients can go to interact with each other, as well as with the researchers who are trying to learn more about the disease so they can find better treatments. (See preview video below.) “The idea was conceptualized by the Helmsley Trust two years ago based on a gap a lot of people saw on the research side,” says Janak Joshi, executive director of T1D exchange. “The idea is to link patients with the research community, both academic and non-academic.”

T1D exchange is being funded by a three-year, $26 million grant from the New York-based Helmsley Charitable Trust. It launched in September 2010 as a patient registry, where participants could voluntarily self-report or upload data from their blood-glucose monitors. In June, T1D announced that 12,000 patients had enrolled in the registry, and that it had assembled its first set of data from the information those patients provided. The data showed that more frequent glucose testing correlated with lower HbA1c—a key measure of blood-glucose control.

T1D Exchange is also developing a biobanking service, which will collect samples from patient volunteers that researchers can use to study Type 1 diabetes.

True to its name, the social portal Glu is designed to bring all the stakeholders in the fight against diabetes together, Joshi says. The site will be completely voluntary—patients can reveal as much or as little as they like, he says. But the idea is to foster … Next Page »

Comments | Reprints | Share:          

Qualcomm, the San Diego wireless technology giant, launched an internal “wireless fitness challenge” almost four weeks ago for a group of its employees—testing the idea of using similar workplace competitions to promote awareness of wireless health technologies.

When vice president Don Jones kicked off the challenge on July 14, he wrote in a Qualcomm blog that 32 employees were organized into four teams for the eight-week challenge to increase activity and lose weight. Contestants got an armband monitor from Pittsburgh, PA-based BodyMedia or an Internet-connected wireless weight scale from Withings of Issy-les-Moulineaux, France, (or both) to capture weight loss, calories burned, sleep, and overall activity levels.

“These devices wirelessly send our health data to the cloud, where we have built a platform that seamlessly ‘mashes up’ our information from both devices and leverages the BodyMedia analytics,” Jones writes in his blog. The results will be weighed, so to speak, to determine the winners, who also happen to be the biggest losers. (In an aside, Jones tells me by e-mail, “I doubt the Fortune 500 would get behind the ‘biggest loser’ branding.”)

While the challenge looks a lot like a publicity stunt, Matthew Holt of San Francisco-based Health 2.0 said during a mobile health and social networking conference in San Diego last week that there has been a big explosion in employer-based health, wellness, and fitness initiatives that rely on emerging mobile health and social networking technologies.

“We will also be posting follow up blogs, videos, check-ins with some of the team members, etc.,” Qualcomm spokesman Garrett Ponder told me recently by e-mail. Ponder, who also has been participating in the challenge, tweeted on July 29 that he burned 4,715 calories the previous day. On July 31, another participant tweeted: “Just 2 weeks & already over 1 Million calories burned by the 32 peeps in the Qualcomm Wireless Fitness Challenge!”

You get the idea.

Ponder also routed a few Xconomy questions to Don Jones, and provided these answers:

Xconomy: After two weeks, how would you describe the progress so far, both for the team and you personally?

Don Jones: So far, the progress has … Next Page »

Comments (1) | Reprints | Share:          

A new health IT startup built around an intriguing idea will begin operating in San Diego next month. What’s the idea? Prescription-based social networking for the chronically ill.

The startup, called Sanitas, was founded in San Diego last year and made its debut yesterday at “Take This Pill and Tweet Me in the Morning,” a half-day conference at The Salk Institute focused on how social media and mobile health are creating consumer-centric healthcare. The conference was organized by the California Healthcare Institute, a La Jolla-based advocate for biomedical policy and research.

Sanitas founder Naser Partovi says the company provides outpatient management software called Wellaho that creates a HIPAA-compliant social media network around the chronically ill, and which is tailored to the needs of that patient. “You can’t just join Wellaho,” Partovi says. “It must be prescribed for you by your doctor.”

The encrypted system ensures patient privacy while also enabling each patient to create a Facebook-like home page that can be shared with his doctors, nurses, friends, family, spiritual advisors, and other patients. The system serves as a collaborative platform for patients and their caregivers, enabling them to share their support online.

Each home page features a calendar that tracks appointments, reminders, and other events, an online journal that enables patients to share their vital signs, and an assortment of other features. The messaging system is encrypted, allowing both private, one-to-one conversations between the patient and a doctor (or between two doctors) as well as the one-to-many messaging more familiar to Facebook users.

“We are not in the business of treating people,” Partovi says. “We are in the business of educating people.” Among other things, the company provides information that has been personalized for each patient’s diagnosis, therapy, and care.

Partovi, who was previously the CEO of San Diego-based SKY MobileMedia and a managing director at San Diego’s Enterprise Partners Venture Capital, tells me that Wellaho had a sad beginning in 2008, when his wife Ioana was diagnosed with breast cancer. “I spent two years trying to save her life,” says Partovi. In the process, he adds, “I learned that from the patient’s perspective, nobody really looks after you. Patients have to do that themselves.”

Partovi, a wireless networking expert, sounded especially disillusioned about his efforts to educate himself about his wife’s disease. Searching the Internet for information about a particular diagnosis or term might yield a million hits, and “It’s up to you to decide what’s relevant,” Partovi says. With Wellaho, Partovi resolved to provide authoritative information for each patient, using doctors and medical students to curate the information based on the patient’s specific diagnosis.

“We connect to patients’ electronic health records through their doctors or the hospital,” Partovi says.

Partovi says he personally funded Wellaho’s initial development, and that friends and family provided another $800,000 for the project. Partovi says he has six people working with him on the project, which already up and running. The startup also has customers, although Partovi says he’s precluded from identifying them except to say they are “three of San Diego’s biggest hospital systems.”

Comments (1) | Reprints | Share:          

The past week in Seattle tech stories at Xconomy leads off with a recap of the highest-profile project yet to emerge from Facebook‘s growing engineering office in Seattle: Skype video calling. Philip Su, the social network’s full-time engineer on the video calling project, says he spent a lot of time making the installation process virtually seamless. What kind of user did he have in mind? Someone like your dear old mom.

Bellevue, WA’s Intellectual Ventures found itself responding to a hard-hitting episode of the public radio program “This American Life,” which delved into the complex and litigious world of patent rights in the U.S. technology industry. Intellectual Ventures has long worked to bat aside criticism that it’s a non-practicing “patent troll” that merely sucks away money on the ideas of others. In this case, I wrote, IV’s tale of an inventor who benefited didn’t pan out—and that gave “This American Life” exactly the kind of devastating anecdote it needed to complete the story.

The exits keep trickling along—this one wasn’t huge, but shows some life in the market for relatively established companies. Smilebox, which offers software that helps users process and publish their photos, was picked up by Israel’s IncrediMail for $25 million up front, with the possibility of another $15 million later on. The Smilebox team of about 50 people will stay headquartered in Redmond.

Seattle design shop pinch/zoom shared some cool insights that it gleaned from designing a new video-player iPad app for the BBC, that stalwart of across-the-pond programming like The Office (the superior original), Monty Python, and more. Pinch/zoom’s Brian Fling said the work affirmed some longstanding design principles, but also delivered some surprises, including the sophistication of iPad users—even though they weren’t all people you’d normally consider super techie.

What was I just saying about exits? A survey from the accounting firm Ernst & Young pegged IPO registration activity in the second quarter at 140 nationwide, up nearly a quarter from a year earlier. The Seattle area’s pipeline for the quarter wasn’t huge, but we are hearing some more rumblings from companies that would like to join Zillow (NASDAQ: Z), Impinj, and Homestreet Bank on the Wall Street parade.

Two items: PhotoRocket finds that VCs in Silicon Valley are sick of hearing about social/mobile/location/photo apps and utilities. It cuts staff, swaps CEOs, throttles back the marketing spending and refocuses its resources on engineering and product development. Meanwhile, across town, Rich Barton and crew are winding down TravelPost and instead putting the money into Trover, a social network/photo sharing/location discovery app that helps people find cool things around the world. It’s coming out of alpha testing and available to the wider world.

Border-straddling cleantech company InEnTec hauled in a $20 million round of financing from undisclosed investors to ramp up its garbage-to-gas technology. InEnTec is headquartered in Bend, OR, but has its major engineering operations across the way in Richland, WA. CEO Karl Schoene said the money will help InEnTec grow its technology to a larger scale. It typically operates joint ventures in different locations where the tech is put to use turning waste into syngas.

And finally, recession survivor Varolii raised $8 million in growth capital; Lucid Commerce scored another $8 million and is expanding in New York; Seniorhomes.com added $3 million.

Comments (1) | Reprints | Share:          

One of the most head-scratching tech headlines of April 2011 was the news that Kosmix, a Mountain View, CA-based startup best known for building a Twitter filtering tool called TweetBeat, had been acquired by Walmart. Yes, that Walmart—the one with 9,000 big-box stores spread across the American heartland.

For one thing, Walmart already has a large technology presence right here in the Bay Area: you can see the big “Walmart.com” sign on the e-commerce division’s building from Highway 101 in Brisbane. So it wasn’t clear why the company needed a second Silicon Valley redoubt. Even more puzzling, Kosmix’s so-called “social genome” platform, which the company had been applying in areas like news aggregation and categorization, didn’t seem to have much to do with Walmart’s business problems—such as narrowing the gap with e-commerce market leader Amazon, for example.

There was speculation that Walmart’s real interest was in Kosmix’s founders, Venky Harinarayan and Anand Rajaraman, who have unbeatable pedigrees in the world of e-commerce technology. The pioneering comparison shopping site they co-founded in 1996, Junglee, was acquired by Amazon in 1998 for $250 million; inside Amazon, the pair helped to create the e-retailer’s huge marketplace of third-party retailers and came up with the technology behind Amazon Mechanical Turk. Perhaps Walmart—which paid $300 million for Kosmix, according to AllThingsD’s Kara Swisher—wanted Harinarayan and Rajaraman to work similar miracles for Walmart.com?

Anand Rajaraman

Those were the questions on my mind when I drove down to the former Kosmix headquarters, now WalmartLabs, in Mountain View a couple of weeks ago. I talked for about hour with Rajaraman, who now shares the title of senior vice president of Walmart Global eCommerce with Harinarayan; he’s also an active Silicon Valley investor and writes about his big technology passion, data mining, at a blog called Datawocky. It turned out to be the most extensive interview that either Kosmix founder has given since the acquisition, and I learned a lot about why Walmart thought Kosmix was interesting, and what kinds of capabilities Rajaraman thinks his 70-person team can bring to their new employer.

A lot of it has to do with unsurprising things like improving the product recommendations that Internet users get when they go to Walmart.com, and tapping shoppers’ smartphones as a marketing channel. But Rajaraman also pointed to some more interesting applications for Kosmix’s social genome technology—like monitoring social media conversations in the vicinity of a physical Walmart store for signals about what goods that store should stock.

But we’ll have to wait a bit longer to see what concrete products, features, or campaigns emerge from the Kosmix acquisition. Rajaraman said his team is hard at work on some features that will likely make their debut before the 2011 holidays. He dropped heavy hints that smartphone apps and an enhanced presence for Walmart on Facebook will figure in the changes somehow, but stayed largely mum about the specifics. “In six to eight months the impact is going to be visible, for sure,” he said.

Here’s the interview transcript, edited for length.

Xconomy: What’s the big picture behind Walmart Labs—why would Walmart want a bigger presence in Silicon Valley?

Anand Rajaraman: Walmart is the biggest retailer in the world, but they are not the number-one player in e-commerce—Amazon is. About a year ago, Walmart decided that e-commerce is a strategic priority. It’s not like they had not been investing in e-commerce, but they said, ‘It’s time to go to the next level.’

When you do that, what’s important is to look at how the world has changed. Are there some assumptions that can be challenged, or some trends that can be used, to leapfrog the 800-pound gorilla in e-commerce?

If you think about the way the world has changed in the last two years, there are two big, disruptive changes that have happened, and one of them is … Next Page »

Comments (8) | Reprints | Share: