Microsoft’s biggest acquisition to date was on display this week, in Boston. I’m not talking about Skype. I’m talking about Qi Lu.

Lu, the president of Microsoft’s online services division, was in town on Wednesday to meet with employees at the firm’s New England Research and Development Center (NERD) in Cambridge, MA, and, in addition to private meetings with local companies and universities, to give a public talk that was co-hosted by Xconomy.

For those who don’t know, Lu was brought in at the end of 2008 by CEO Steve Ballmer to spearhead Microsoft’s fast-growing online efforts—including Bing, MSN, and mobile advertising. Before that, Lu was a senior exec at Yahoo for a decade, where he ran engineering for the search and advertising group. He had previously worked at IBM’s Almaden Research Center and Carnegie Mellon University.

So Lu is basically The One, charged with bringing the world’s biggest software company to a more competitive position in the digital, online, and social era (no pressure). And he was quite a steal—especially compared to the $45 billion that Microsoft offered to pay for all of Yahoo in early 2008.

This week, when he was in Cambridge, Xconomy sat down with Lu for an exclusive interview. Between that and his talk at the NERD center (see photo below), we learned a great deal about Microsoft’s (NASDAQ: MSFT) evolving strategy in search and the Web—and where the company sees itself playing across the various fields of consumer online services. We’ll have a separate story on that soon.

But first, we had to get Lu’s take on the big news of the week, and what everyone was buzzing about—Microsoft’s $8.5 billion acquisition of Skype, the Luxembourg-based Internet phone and video firm (which has a big Silicon Valley presence). Skype will become a separate division within Microsoft; it won’t be integrated into Lu’s online services division. Partly because it isn’t in his direct purview, Lu didn’t go into much detail. But from the high-level comments he made during our interview, and at his public talk, it sounds like there are plans to use Skype’s technologies across a wide range of Microsoft businesses.

“This acquisition is very strategic,” Lu told us. “Certainly we are very confident that … Next Page »

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Variety was the theme of the Northwest Entrepreneur Network’s First Look Forum yesterday at the Arctic Club Hotel, a venerable establishment in downtown Seattle. There were a dozen startup companies with a wide array of ideas, each giving a five-minute pitch to an eclectic audience that included investors, entrepreneurship coaches, media, and sponsors. The startups were there to compete for a chance to win some cool prizes, and of course, score new investments. The “first look” aspect means none had presented previously to investors or venture capital groups—this is the brainchild of NWEN executive director Rebecca Lovell.

One interesting point: the initial group of companies represented much more than just software and tech. The bunch covered medical devices, techniques for combating everything from obesity to tooth decay to slow and messy colonoscopies, and applications across industries ranging from online travel to trucking to pet care. Only three of the 12 startups in the backyard of Microsoft were software companies.

But in the end, the five finalists—selected by audience voting—consisted of those three software startups plus two hardware/materials tech companies (though one of those has a biomedical application). Any of these certainly could make a promising business, but it’s also possible that the investors and other voters in the room were just more comfortable with tech than life sciences or medical companies. Or maybe it’s just that tech startups tend to require smaller amounts of startup capital that can lead to higher potential returns.

Here are my initial impressions and super-short summaries of what each of the 12 Northwest companies presented (plus more details on the finalists and winner below):

Biomoles
Developer of higher quality and purity techniques for doing DNA purification for automated DNA processing and life sciences applications.

Crux Medical Innovations
Producer of a special biopsy device that makes procedures like colonoscopies (done 20 million times a year in the U.S. to detect colon cancer) faster and more efficient.

Darwin’s Natural Pet Products
A six-year-old company that makes and delivers fresh, healthy frozen meals for cats and dogs; it has more than 1,500 customers, mostly in the Seattle area, and wants to go national.

DragGone Aerodynamics
Maker of add-ons to trucks that reduce fuel consumption by improving aerodynamics.

Empowering Engineering Technologies
Three-year-old company developing an elastic tendon-like medical device that helps people with gait disabilities walk; the orthopedic technology comes Cleveland Clinic and is currently being tested in patients. (This company is also presenting Wednesday at the inaugural meeting of Wings, the Northwest’s new medical device angel network, as Luke reported yesterday.)

HealthyLogics
A startup developing “biofeedback” utensils, like a special fork that measures how fast … Next Page »

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Google announced last night that it has officially opened an online store for outside developers to sell their business software applications. The Google Apps Marketplace offers cloud-based software that is integrated with Google Apps—things like Google Calendar, Google Docs, and Gmail for businesses. (That might be a record for the number of Googles in one sentence.) Developers will give Google (NASDAQ: GOOG) a 20 percent cut of each app sale, on top of paying a one-time, upfront fee of $100.

The move is widely viewed as an effort by Google to compete more strongly with the core business software sold by Microsoft (NASDAQ: MSFT). The announcement happens to come just a few days after Microsoft CEO Steve Ballmer laid out his company’s plans for cloud-based software in a sweeping talk at the University of Washington. It also comes on the heels of Google’s acquisition of DocVerse, a collaborative software startup whose technology could help connect Google Docs with Microsoft Office.

And what about Amazon’s cloud computing platform? Thousands of startup developers use Amazon Web Services (AWS) to store data, and to host and manage their applications. But Google’s new app store doesn’t stop any developer from also using AWS. Rather, developers can still use AWS for back-end IT services and now market their software through Google Apps. Amazon (NASDAQ: AMZN) itself doesn’t have a business-app marketplace, though it is rolling out mobile “active content” for consumers in its Kindle store later this year.

In fact, Google and Amazon both provide cloud “infrastructure”—software platforms for developers and companies to use as much or as little cloud-computing resources as they want, without the expense and hassle of maintaining their own servers. Microsoft’s cloud platform, Azure, is getting in this game as well, but it’s not entirely clear how much Microsoft intends to tie developers into its cloud products. Microsoft’s core business thinking is rooted in proprietary desktop-based software and distribution partners—which isn’t a bad model, but how well it transfers to the Web developer ecosystem remains to be seen.

Bottom line: tech startups can now use a hybrid of Amazon and Google cloud services to develop, host, and market their software. This could potentially unseat Microsoft as the king of business software—but it’s still early in the game. (Though surely Oracle, IBM, and SAP are paying close attention too.)

Meanwhile, there are 50-some apps already available in Google’s app store. Among them are products from at least three Seattle-area companies that we follow regularly:

—Concur, a Redmond, WA-based maker of corporate travel and expense management software, is offering an expense-reporting service for small businesses through the Google … Next Page »

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It’s the second notable Google acquisition in these parts, coming on the heels of Seattle-based Picnik getting bought by the search giant earlier this week. DocVerse, a collaborative-document software startup founded in the Seattle area in 2007 by former Microsofties and MIT alums Shan Sinha and Alex DeNeui, has been acquired by Google, according to a company blog post. Financial terms of the deal weren’t announced.

Here’s the catch, from a Seattle perspective. DocVerse moved to San Francisco in the summer of 2008, mostly because its founders thought the Bay Area is the best place to grow a successful startup, and its investors were there. It’s hard to argue with their results. (Sinha gave Xconomy four reasons why the San Francisco area is for startups like what Hollywood is for moviemakers.)

In a blog post today, Sinha talks about the deal and the culture fit between DocVerse and Google—a bit similar to Picnik CEO Jonathan Sposato’s comments on “how Google works” from earlier this week. “What impresses us the most about the Google team is that they all share the same philosophy—giving people the tools to work the way they want. From the moment we started talking with them, it was clear that there was a lot of shared DNA in how we approached solving people’s problems,” Sinha writes. “We’re looking forward to the opportunity to scale our vision at Google. Our first step will be to combine DocVerse with Google Apps to create a bridge between Microsoft Office and Google Apps.”

This last bit is intriguing, from a big-company perspective. DocVerse’s software enables Web-based collaboration within Microsoft Office staples like Word, Excel, and PowerPoint. One question is whether Google really cares about the DocVerse product as a way to connect Office with Google Docs—or compete better with Office—or whether it’s just buying talent at this point. You can read the official Google blog post here.

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Microsoft’s latest reorganization, which involves labs in both the Seattle and Boston areas, has a new face. It’s Lili Cheng, a 14-year Microsoftie with experience in both research (social computing) and products (Windows Vista user experience). Cheng now officially leads three separate groups that are being rolled into one: her Creative Systems Group within Microsoft Research in Redmond, WA; Rich Media Lab led by Kostas Mallios, also in Redmond; and Startup Labs in Cambridge, MA, led by Reed Sturtevant.

Yesterday, chief software architect Ray Ozzie announced the creation of the new entity, called FUSE (Future Social Experience) Labs, which will focus on social computing as applied to Microsoft products in entertainment and business. Sturtevant, the founding managing director of Startup Labs, is leaving the company, while Mallios will continue to report to Ozzie and is taking on business development duties involved with technology incubation.

But back to the lab’s new head, who spoke with me from Cambridge yesterday. Cheng, after inheriting about 70 staff members from Startup Labs and Rich Media Lab, now manages about 80 people in FUSE Labs, and says she will be splitting her time between the Seattle and Boston areas. She said the employees of Startup Labs (there are 30-some staff members) will be staying in Cambridge.

As Cheng explains, the goal of FUSE Labs is to “bridge the gap” between research and products—an oft-heard refrain at Microsoft (and most big companies)—by working on projects that are two to five years away from commercialization, and interacting closely with product teams.

The specific focus of the lab is social computing—applying social media (things like Twitter, Facebook, and other social-network technologies) to problems in business collaboration and entertainment. The high-level strategy here is to “embed social activity into business scenarios” for Microsoft, Cheng says. She didn’t say anything more specific about Microsoft’s plans for social media, or about how the employees in Startup Labs and Rich Media Lab will be integrated into the social theme. But she adds, “Interacting with other people is so personal and emotional to every single person out there. It’s important for every company out there.”

Cheng’s team has previously built applications like Kodu, which lets kids create games and stories using an Xbox controller and share them on a community games channel; and Salsa, a prototype that connects your e-mail inbox with social networks. (The latter sounds a lot like what the Seattle startup Gist, led by ex-Microsoftie T.A. McCann, has built and is actively testing.)

Asked what her greatest challenge is in the new job, Cheng said it’s addressing how to “take best advantage of this amazing opportunity.” Having been in the social computing space for many years, she says, now it’s time to “just go for it.”

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Ray Ozzie, Microsoft’s chief software architect, announced today the company is forming a new laboratory called Future Social Experience Labs, or FUSE Labs, which will focus on aspects of “social computing” beyond just communication and collaboration. The move is part of a wider restructuring of Microsoft’s labs: FUSE Labs is a merger between the Creative Systems Group at Microsoft Research in Redmond, WA; Rich Media Labs; and Startup Labs in Cambridge, MA. As part of the announcement, Ozzie said Reed Sturtevant, the founding managing director of Startup Labs for the past two years, is leaving the company to pursue other interests.

FUSE Labs will be led by Lili Cheng, a 14-year Microsoft veteran who most recently headed the Creative Systems Group and previously managed the user experience teams for Windows Vista. Before joining Microsoft, Cheng worked at Apple Computer in the human interface-advanced technology group, where she worked on QuickTime VR and QuickTime Conferencing products. Cheng is now general manager of FUSE Labs (in Redmond) and will report directly to Ozzie. “I’ve known Lili for many years, and have long been impressed by her vision and ability to create; to engage yet to also inspire; to lead; to make tough choices; to deliver,” Ozzie said in a memo to Microsoft staff.

Ozzie said he has “refined the missions” of Microsoft’s labs, in part because of “changing business conditions.” From his memo, it sounds like the goal of the new lab is to apply research in social computing (things like user interfaces, social networks, and human behavior) to help develop new products in the areas of entertainment, productivity, and teamwork—as well as to explore how Microsoft can extend the ways people use computer operating systems.

“The three groups being combined have concrete skills and code in areas where ‘social’ meets sharing; where ‘social’ meets real-time; where ‘social’ meets media; where ‘social’ meets search; where ‘social’ meets the cloud plus three screens and a world of devices,” he said. (See more on Ozzie’s three-screen vision here.)

It also sounds like the reorganization is meant to focus the impact of social computing research more immediately on the company’s product pipeline. “FUSE Labs will bring more coherence and capability to those advanced development projects where they’re already actively collaborating with product groups to help them succeed with ‘leapfrog’ efforts,” Ozzie said in his memo. “Working closely with [Microsoft Research] and across our divisions, the lab will prioritize efforts where its capabilities can be applied to areas where the company’s extant missions, structures, tempo or risk might otherwise cause us to miss a material threat or opportunity.”

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Seattle-based Daptiv, a maker of online project management software, has received $2 million in new funding, according to a regulatory filing. The cash comes primarily from the company’s management, including new CEO Chase Franklin, chairman Kevin Hickey, and chief operating officer Mark Klebanoff, as TechFlash reports. Daptiv was founded in 1997 (as eProject), and has raised about $21 million in venture funding since 2007.

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Score one more for the Qpass mafia. Chase Franklin, the co-founder and former CEO of digital commerce firm Qpass (sold to Amdocs for $275 million in 2006), has joined Seattle-based Daptiv as its chief executive, effective immediately. Daptiv makes collaborative business software, and raised $9 million in Series B funding back in August 2008. Its investors include Bay Partners, Kennet Partners, King Street Partners, and Wolf Bay Holdings.

Franklin was most recently chief of strategy for content and media at Amdocs (NYSE: DOX). His claim to fame is leading Seattle-based Qpass from its founding in 1997, and evolving the company from a consumer brand to an online commerce platform for personal computers, set top boxes, and mobile devices. After the bubble burst in 2000, Qpass faced a dilemma when it couldn’t go public, and it needed to decide in which direction to move—keep pushing its product across different market segments, or pick one and stick with it.

Former colleagues credit Franklin with making the tough choices, and making them quickly: Qpass focused on mobile, where wireless carriers would pay the company to help them generate more revenue from subscribers through digital products like ringtones and games. The company was first to market in mobile services and payment processing, and never looked back.

Before his Qpass days, Franklin spent more than a decade at Microsoft (NASDAQ: MSFT), leading product development and management for Microsoft Office, interactive television, and MSN properties. He is regarded as a gifted strategist in the software world. He is also one of about 30 former Qpass employees whom we tracked down in their present jobs last month—and he brings the number of ex-Qpassion CEOs to 11.

Brent Frei, the co-founder of Bellevue, WA-based Smartsheet and Onyx Software, knows a thing or two about collaborative software (Daptiv’s space). Though he says he doesn’t know a lot about Daptiv’s new CEO, Frei has high praise for Qpass employees who served during Franklin’s tenure. “They stuck it out through thick and thin, and they are high-quality folks,” Frei says. “That alone would suggest that he’s got some strongly positive substance.”

In a statement, Franklin said Daptiv is “widely recognized as a leader in collaborative project and portfolio management solutions for the enterprise.” He added, “The Daptiv team has a significant foundation in its technology and customer base on which to build as we progress in our vision of helping organizations better manage their work.”

Daptiv was founded in 1997 and says it has more than 700 corporate customers, including Amgen, BASF, BP, and Honeywell.

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Bellevue, WA-based LiquidPlanner, a collaborative software and project management startup, has raised $1 million from angel investors. The money includes the first investment from Seattle-based Alliance of Angels’ new seed fund it announced last month. The news was first reported by TechFlash, and was confirmed by Greg Huey from Alliance of Angels and investor Geoff Entress, who has joined LiquidPlanner’s board.

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I dropped in on AboutUs for a mid-year checkup while I was in Portland, OR, last week. The company announced a $2.5 million Series A funding round from Voyager Capital in January, and has been transitioning from startup mode to strategic execution of its plans to reinvent how people discover and share information on the Web.

Company headquarters is over the Morrison Bridge from downtown Portland, in a bright yellow building visible from across the river. AboutUs founder and CEO Ray King gave me a tour of the digs, which are spacious and open. Almost all of the chairs and furniture are on wheels, and computer monitors are mounted on long, flexible arms—all to encourage collaboration between staff.

Which, on a higher level, is central to the mission of AboutUs. King summarizes the company, saying, “It’s about building human content that describes all content and sites” on the Web. “It’s a discovery tool,” he adds. The basic idea is a collaborative, wiki-style site that has a page for every company and organization out there, with information about that entity (history, management, contacts, customer reviews, and so forth). AboutUs also creates useful lists for communities. So if you’re looking for the hottest tech startups in Portland, say, you can go to an AboutUs page that has editable descriptions of Portland companies, with links to more information.

The whole concept is different from Google, Bing, or any of the search engines currently getting lots of attention. Those other sites give you an impressive list of references when you do a search, but not much direct information about what you’re looking for. “We don’t think of ourselves as search,” King says. Instead, AboutUs is complementary to search engines in that it hosts content about people, companies, and other topics.

It all stems from King’s deeper view of what a website represents—”people acting with intentionality,” he says. That means people set up websites because they want to do something, whether it’s selling a product, blogging their views, or sharing information or media. His company hopes to tap that intentionality in a deep way, by getting people to contribute to descriptions of websites they’re involved with, and eventually helping to create a new mapping of content on the Web.

King says AboutUs envisions three main target users: a “topic researcher” looking for a site she’s never been to before; a “shy maven” who likes using new tools and wants recognition for his expertise; and a “website operator” who wants to improve the visibility of his company or organization. AboutUs seems to have the first and third users pretty well figured out. It’s the middle user that King says he is currently most focused on.

AboutUs was profitable in 2008 and hopes to be profitable again by the end of 2009, King says. The site is getting between 8 and 9 million unique visitors per month. Its revenues come from a combination of advertising and service fees.

As for his outlook for the rest of the year, King says AboutUs is “on plan right now.” He adds that his team is getting more focused on improving technical aspects like the site’s ranking algorithm and its ease of use. Finally, King says he’s looking to “open a few pockets of deep penetration.” Those might come in the medical arena or the technology space, he says. “When you want to see what’s happening in a given area, that’s AboutUs.”

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Hillsboro, OR-based Kryptiq announced today it has sold off its health plan network management software, called Choreo, to Blue Bell, PA-based Portico Systems. Financial terms were not released, but Kryptiq is using proceeds from the sale to expand its core services for healthcare providers. Kryptiq’s collaborative software lets providers share healthcare information with patients, labs, pharmacies, and colleagues.

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It was a fairly quiet week for Northwest deals, with activity in biotech, software, and mobile. Let’s see if the sunny weather brings more action.

—Seattle Genetics (NASDAQ: SGEN), a Bothell, WA-based developer of cancer drugs, provided a worldwide license to use its technology to Millennium: The Takeda Oncology Company in exchange for $4 million upfront, as Luke reported. The technology combines antibodies that seek out tumors with toxins to make them more potent. Millennium will pay to develop the drug candidate, as well as a mid-single-digit percentage royalty on sales if it turns the technology into a product.

—Luke reported on the ongoing partnership between biotech startup VLST and Danish pharmaceutical giant Novo Nordisk in the South Lake Union neighborhood of Seattle. The original deal, announced in December, brought in $12 million to VLST in exchange for Novo gaining the rights to develop drugs against cell targets VLST has discovered for autoimmune and inflammatory diseases.

—Seattle-based Swype, which makes text-input software for mobile devices, raised $1.3 million in funding from angel investors and company management. Swype’s technology lets people enter text by tracing a path on a touch-screen keyboard using a stylus or their fingertip.

—Bellevue, WA-based Onehub, a maker of collaborative software for business users, closed about $600,000 in funding as part of an ongoing $1 million fundraising round. The investors and other terms were not disclosed. Onehub, founded in 2007, has developed a Web-based application that helps companies share information and manage projects.

—MDRNA (NASDAQ: MRNA), a Bothell, WA-based developer of drugs that use RNA interference technology, sold its assets related to a nasal spray drug for osteoporosis to Par Pharmaceutical, as Luke reported. MDRNA receives an undisclosed cash payment upfront, as well as a double-digit percentage royalty on sales of the product. Par will assume the manufacturing and operating costs related to the drug.

—Luke reported that Cambridge, MA-based Genzyme (NASDAQ: GENZ, the world’s largest maker of drugs for rare genetic diseases, is moving into cancer and multiple sclerosis by acquiring three drugs from German drugmaker Bayer AG—including one, Leukine, that gives Genzyme its first foothold in Seattle. Leukine, which is made in Seattle and Bothell, WA, boosts production of white blood cells for chemotherapy patients. Genzyme is not paying upfront fees, but expects to take over manufacturing of Leukine at a new factory in Snohomish County next year.

—Seattle cloud computing startup Skytap’s $7 million funding round from last month was worth a closer look. I spoke with CEO Scott Roza and director of product management Ian Knox about the financing, which came from the company’s existing Seattle-area investors Ignition Partners, Madrona Venture Group, and WRF Capital. Roza and Knox also touched on Skytap’s strategy as it prepares to take on big players in the cloud like Amazon, Google, and EMC.

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Bellevue, WA-based Onehub, a maker of collaborative software for businesses, has raised about $600,000 as part of an ongoing $1 million fundraising round, according to Northwest Innovation, which cites a regulatory filing. No other terms were disclosed. A Onehub spokesperson said the company is not discussing its funding publicly yet.

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For hundreds of years, students and spectators could gather in operating theaters like the Ether Dome at Boston’s Massachusetts General Hospital to watch doctors perform surgery. Now IBM and researchers at another famous Boston hospital, Brigham and Women’s, have developed a tool that lets many physicians gather virutally to get a good look at a single patient. Called the Radiology Theatre, it’s a secure Web-based collaboration environment where teams of doctors in different locations can examine high-resolution CT scans, MRIs, and other test results and discuss the information over audio and video links.

“We are not all in the same location, and the information that’s needed to take care of patients does not all come from the same place,” says Francine Jacobson, a thoracic radiologist at Brigham and Women’s who is the lead investigator working with IBM’s software engineers. “Bringing together both the data and the radiologists in the same Web browser in a truly interactive manner, and avoiding a lot of the compatibility issues we’ve had in the past, is truly exciting.”

Officially unveiled today, the Radiology Theatre is essentially a mashup of free and open-source software components—such as the WebKit browser engine, the OpenAjax Hub, and the Oviyam medical image browser (developed in India)—that IBM has integrated using a proprietary Web application development platform called Blue Spruce. The system makes it easy to combine multiple types of Web resources and communications tools, such as maps, images, chat interfaces, whiteboards, and live webcam video, inside a single browser window. Over the last few months, IBM’s Emerging Internet Technology Group has been demonstrating several proof-of-concept projects built on Blue Spruce, including a news browser for financial analysts and a map-based collaboration platform for real estate investors.

The Radiology Theatre is the first telemedicine application for Blue Spruce. “The fundamental reason we did this was that everybody has been trying to replicate the power of face-to-face interactions, but they haven’t gotten there, because the images aren’t clear enough or the network isn’t fast enough or they could share certain kinds of data in a Web conference but they’d have to send other data by e-mail,” says David Boloker, the Brookline, MA-based chief technology officer for the Emerging Internet Technology Group. “We wanted to see how far we could extend the browser with high-definition video and audio and multi-user interactions, all on the same Web page.”

While TV doctors still gather in hushed radiology rooms to scrutinize film-based X-rays and CT scans on light boards, nearly all medical images are now captured digitally. In the Radiology Theatre, physicians logging in from different locations can call up these digital images from hospital databases, zoom in on specific sections of the images, use whiteboard tools to draw on the images, and consult in real time via webcam. Boloker says the initial idea for the system came from discussions with radiologists in Melbourne, Australia, who needed a better way to consult with physicians in rural clinics in Australia’s Northern Territory, thousands of miles away. But the same technologies that lets doctors communicate with other doctors could eventually be used to help far-away doctors communicate with patients, says Boloker. “You can do it all via the Web,” he says.

Jacobson has been using the Radiology Theatre to explore CT data and pulmonary function test results from patients involved in a long-term study of chronic obstructive pulmonary disease (COPD) funded by the Flight Attendant Medical Research Institute. She’s not making use of the system’s collaboration features, at the moment, but she says just being able to combine several types of data on the same screen is valuable. “When you’re looking for things that will lead to earlier identification of disease states, it’s important to learn what subtle things that we might consider normal that we should notice,” Jacobson says. With Radiology Theature, “We can look at the density of lung tissue in a particular area while at the same time looking at the pulmonary function test.”

Jacobson says she expects the Radiology Theatre to come in handy as she gets deeper into a multi-center study of the genetic epidemiology of COPD that involves researchers in Denver. But collaborators don’t have to be thousands of miles away: she says the Radiology Theatre might also help doctors at the Brigham intensive care unit who need to consult with experts across the street at the new Shapiro Cardiovascular Center. “I think as medicine has become more specialized, we are less co-located, and more based in the particular clinics where we work,” Jacobson says. “We’re all very busy, so getting together is not easy.”

IBM doesn’t have immediate plans to turn the Radiology Theatre into a commercial product, but it views the underlying Blue Spruce platform as part of its bid to influence the burgeoning market for cooperative, browser-based applications. And Boloker says he views the Radiology Theatre “as a platform that we could easily built a product on in the future.” While many of the individual components of the radiology environment are based on open-source software, and might therefore be easy for competitors to replicate, “the core platform—including audio and video and multi-user interaction—is all IBM technology,” Boloker says. “We’ve made it much easier to bring in widgets from here and there and make them all work together in a secure way.”

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Values of n, a collaborative-software startup in Portland, OR, has been acquired by San Francisco-based Twitter for an undisclosed amount. The startup’s existing products will be shut down on December 8, but “the technology behind the scenes will live on and potentially re-emerge as part of Twitter’s systems, services, user experience, or open source libraries,” according to a blog post by Twitter CEO Ev Williams yesterday evening.

From all appearances, this was a talent grab. Twitter has hired Values of n’s founder, Rael Dornfest, an engineer and author who did early work on RSS Web feed technologies and served as chief technology officer at O’Reilly Media. Dornfest joins Twitter as the newest member of its engineering team, according to Williams. “A short while ago it became clear to Rael that while the innovative personal productivity and information management applications his startup had created were useful products with a loyal following, Values of n was not going to meet its huge expectations as a standalone business,” Williams writes.

Dornfest notes on his own blog that the Twitter courtship has been ongoing. “I started consulting there a few months ago, and fell in love with the team, their way of thinking about things, and of course the product,” he writes. “It turns out we worked incredibly well together, the feeling was mutual, and they pulled me in as a permanent member of the team.”

Twitter, the micro-messaging company that recently turned down a $500 million stock acquisition offer from Facebook, gets the assets and intellectual property of Values of n, including its smart sticky-note software and its personal-assistant application that works over e-mail, texting, and the Web. In 2006, Values of n raised at least $500,000 from First Round Capital, Magnus Ventures, and Sherpalo Ventures, according to Northwest Innovation.

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