I don’t think there’s ever been a textbook that made it this easy to be a good student. —Roger Rosner, vice president of productivity applications, Apple

Whenever a company as powerful as Apple, Facebook, or Google announces a big new product push, it evokes wonder and acclaim from some observers, head-scratching and horror from others, and the usual FUD from competitors. So I wasn’t surprised when Apple’s press event last week at the Guggenheim Museum—where it said it will sell low-priced iPad textbooks to high-schoolers through its iBooks store and give away the software needed to make them—was followed by a flood of criticism. But I was definitely impressed by the range and vehemence of the objections. I’ve spent part of this week trying to figure out where all the discomfort is coming from.

Here are a few of the reasons Apple’s textbook plans are doomed, misconceived, or just plain evil, in the eyes of the blogosphere:

A page from E.O. Wilson's "Life on Earth" for the iPad

This is all about one media giant trying to grab market share from other media giants. Education publishing is the most profitable part of the book business these days—maybe the only profitable part. So experiments with digital publishing have been cautious, and hampered by the lack of a great delivery device. Apple thinks it can hasten the technological transition, just as it did with music on the iPod, and grab a big slice of the profits in the process. The only difference this time around, say some observers, is that giants like Houghton Mifflin Harcourt, McGraw-Hill, and Pearson have decided to join ‘em rather than fight ‘em.

This is all about selling iPads. This point of criticism has two variants. The first says Apple’s textbook push will fail because it’s insincere: the company really just wants to hook teenagers on Apple hardware, so they’ll buy the iPad 7 (with direct neural interface!) when they grow up. The second says it will fail because iPads are too expensive: schools can’t afford to supply every kid with a $499 gadget that they’ll probably just break, lose, or misuse.

Schools will never buy e-textbooks if they can’t own them. Apple’s textbook program is dead in the water because the company wants schools to purchase books using “volume vouchers.” The vouchers would come with codes that students can redeem in the iBooks store; the textbooks would then be placed into the students’ personal iTunes accounts. The objection here is that schools won’t be able to grok the accounting math or the concept that the books will actually belong to the students, rather than being passed along from year to year.

Authors will never write textbooks for iBooks if they can’t sell them elsewhere. The biggest post-announcement hullabaloo has been over the terms of the end user license agreement for iBooks Author, the free program Apple built to help authors, publishers, and teachers create their own multimedia textbooks. Under the agreement, iBooks Author users who want to give away their textbooks free can do so by any means they like, but those who want to sell their books for profit may only do so through the iBooks store, where Apple gets its usual 30 percent cut. That might seem like simple business logic—there’s no reason Apple should help authors create content for competing platforms like Amazon’s Kindle. But critics screamed bloody murder about the provision, saying that it was like Microsoft taking a cut for every novel written using Word.

Nothing new here—iBooks textbooks are an inferior ripoff of existing technologies. Apple is obviously late to the consumer e-book party, where Amazon still has a commanding lead. The criticism here is that Apple, despite its boastful press releases last week, hasn’t really reinvented anything about e-textbooks. Companies like Inkling, Kno, Chegg, Vook, Flatworld Knowledge, and Cengage Learning already offer systems for creating and publishing multimedia textbooks, and most of these books work on multiple platforms, not just the iPad.

Apple is trying to kill open e-book publishing standards. Ahh, standards. Few debates are as bitter, partisan, and unending—it’s the tech world’s version of “The Blue and the Gray.” Apple is an ongoing supporter of the open ePub format. Books using this format work on devices from a variety of manufacturers (one exception being Amazon, but that’s another story). But critics are incensed that e-textbooks created using iBooks Author are … Next Page »

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A dark day in Boston is a little darker now. Jerome Rubin, the publishing executive and inventor who co-founded the display company E Ink and helped commercialize the online database that became LexisNexis, died from a stroke on Monday in New York City, according to a report by the Associated Press. He was 86.

Rubin worked at the MIT Media Lab in the 1990s, where he helped spin out Massachusetts-based E Ink, the electronic-paper company that makes the display in the Amazon Kindle and other e-readers.

Before that, Rubin, a Harvard University alum trained in physics and law, helped launch an Ohio-based research database for lawyers in 1973. The database search and retrieval system eventually became LexisNexis, specializing in news, legal, and public records information. Harvard Magazine wrote about some of Rubin’s achievements back in 2000.

Rubin lived in Manhattan and is survived by his children, Richard Rubin and Alicia Yamin, according to the AP report.

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What is the future of electronic books and digital publishing in Boston? We might be getting a glimpse of it today.

The news is that Safari Books Online, a joint venture between O’Reilly Media and Pearson Education, is acquiring Threepress, a Boston-area software and consulting shop specializing in tools for digital publishing. Terms of the deal haven’t been announced, but it’s probably fairly modest in size.

What makes it interesting is that it’s a story of homegrown, bootstrapped talent in a burgeoning field—e-book reading and publishing—that has finally come of age.

Safari (not to be confused with the Apple browser) provides an on-demand digital library of thousands of books and videos on software, IT, professional development, and other techie and business topics. The 10-year-old company, which has just under 100 employees, is headquartered in Sebastopol, CA. But it started in Boston, and some of its leadership team, including CEO Andrew Savikas, is based here.

As part of the Threepress acquisition, Safari is planning to move into a new office space in Boston that will have about 10 employees. “We are looking at space with room to grow,” says Savikas, an O’Reilly Media veteran. “I expect we’ll be hiring in Boston, especially on the technology side.”

Threepress is a profitable, four-person tech shop founded by Web developer Liza Daly in 2008. Daly previously worked at Digitas and iFactory, and she originally started Threepress to do consulting and build tools for academic publishers and websites. As is often the case for startups, she found an unexpected niche. [Disclosure: Daly is married to Dan Schmidt, my longtime Honest Bob bandmate.]

Daly entered the e-book world by writing Bookworm, an open-source, browser-based reading system for e-books using the EPUB format. At first, she saw books as just part of the content of academic websites. But her work got the attention of Savikas at O’Reilly Media, which decided to host Bookworm on its site in 2009. That year Savikas also recruited Daly to speak at a big … Next Page »

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Vijay Gaur sees the book going in the same direction that the mobile phone has.

“We are converting a book into a platform,” says Gaur. “Your phone is becoming more powerful by applications. We are now applying that same concept to books.”

That’s the idea behind his Medford, MA-based startup, AppBrick. The company, which graduated this past August from the New York edition of the startup accelerator DreamIt Ventures, hope to put a layer of interactive applications on top of e-books, from novels to textbooks to children’s stories.

Publishers upload their e-books into the AppBrick platform for the iPad, select which apps they want to add on top of it, and push go. It all ties into AppBrick’s original mission of giving businesses “a very simple easy to use tool to launch applications very fast and manage content through a Web based dashboard,” Gaur says.

Though books have evolved to hit digital readers, overall they remain very “flat,” and publishers are looking for a way to better capture their audiences, says Gaur. One set of AppBrick applications enables readers to share sections of the book via channels like Twitter, e-mail, or Facebook, as well as connect with authors via those social media channels. Readers can do all that without leaving the page they’re reading.

But AppBrick’s platform does far more to enhance the overall book experience, Gaur says. Readers can use a Wiki reference app to look up a term they’re unfamiliar with, connect with tutors via video, or discuss a chapter with other readers via a voice-over IP connection. One app enables users to draw and share notes on a virtual whiteboard. All of these functions appear as pop-up windows over the e-book page readers are already on.

AppBrick’s goal is to offer a platform where other third-party developers can create custom applications. The AppBrick core reader application would be free to users, but they would pay for purchases of additional applications. For example, they would pay tutors for lessons related to textbook content. AppBrick would take a cut of those purchases if the system takes off, Gaur says. It also plans to charge publishers for its service.

Gaur says these functions give publishers and authors analytics and insight about their audience that’s not available through traditional paper and e-books. They can understand what chapters readers are consuming, how they’re discussing it with others, and where they’re plugging in the interactive apps.

AppBrick also offers another set of features that allows users to create interactive storyboards, record their own voice for dialogue, and share those creations. “It publicizes the book and increases the creativity in the kids,” says Gaur. Those features are targeted at children’s books, but can also work with adult texts.

Other companies, like Push Pop Press (acquired by Facebook), have worked to make e-books more interactive and social media-oriented. AppBrick is a much cheaper solution though, because with it, interactive e-books individually don’t need to be coded from the ground up, says Gaur.” “They upload books and apply features,” says Gaur. “The beautiful aspect is we are converting the book into a platform and it keeps on improving regularly.”

AppBrick is testing its platform with a few different publishers and is looking to enlist more, as well as attract users. The company is running on $30,000 that Gaur has put in, as well as $20,000 from DreamIt, but is looking to gain more traction with its reader and publisher communities before going after a bigger funding round, says Gaur.

It’s up to the publishing houses to push their texts through AppBrick so their readers can get their hands on the interactive features. We’ll have to see who bites.

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It’s a busy day for venture-funding and IPO announcements. To wit:

—San Mateo, CA-based InMobi, which runs the largest independent mobile ad network, said today that it has arranged a whopping $200 million investment from Softbank, in two tranches of $100 million each arriving this month and in April 2012. “With a global leader like Softbank behind us, we are now well positioned to fully capitalize on the opportunity before us through substantially increased product innovation, deeper market penetration, and acquisitions across the mobile ad value chain,” InMobi founder and CEO Naveen Tewari said in a statement.

—Chegg, the Santa Clara, CA-based online college textbook rental company, said that it has agreed to acquire Zinch, a San Francisco startup whose online platform matches students applying to colleges and graduate schools with admissions offices and scholarship opportunities. “”With our acquisition of Zinch, we’re extending our mission to high school students through the $7 billion college recruiting market, while continuing to break down the barriers of a college education, from the high cost of tuition and textbooks to helping students make money, pick their courses and get the academic help they need,” Chegg president and CEO Dan Rosensweig said in a statement. Zinch raised venture financing from New World Ventures as well as individual investors Mike Levinthal, Stan Chudnovsky, Aydin Senkut, and Chris Michel. Financial terms of the acquisition were not disclosed.

—GCT Semiconductor of San Jose has filed S-1 registration papers in preparation for an initial public offering. The company, a fabless designer of 4G wireless chips, hopes to raise $100 million in the offering. The filing shows that GCT’s largest shareholders are board chairman Paul H.J. Kim (31.15 percent), Parakletos Ventures (31.14 percent), and FirstMark Capital (13.60 percent).

—Alphabet Energy, a San Francisco startup developing thermoelectric materials that capture waste heat, said it has closed a $12 million round of Series A financing. TPG Biotech led the round, which was joined by existing investors Claremont Creek Ventures and the CalCEF Clean Energy Angel Fund. The company says it will use the funds to speed up product development, deploy pilot projects, and relocate to an as-yet-undisclosed location in the Bay Area. Mark Gudiksen of TPG Biotech has joined Alphabet’s board of directors.

—RRKidz, a San Francisco- and Los Angeles-based startup developing tablet-based books for children, said yesterday that has completed an initial round of fundraising with support from Raymonds Capital and the Ewing Marion Kauffman Foundation. Led by actor-director Levar Burton of Reading Rainbow and Star Trek fame, the company is creating a subscription e-book service for iPads and Android devices. In a report today, VentureWire put the amount of the initial investment at $3 million.

—Rumble Entertainment, a new cross-platform gaming company based in Redwood City, CA, came out of stealth mode to announce that it has collected an unspecified amount of seed funding from Playdom founder Rick Thompson. Rumble’s founding team includes former EA executives Greg Richardson, Mark Spenner, and David O’Connor, as well as former Zynga designer John Yoo. Rumble says it will build free-to-play games in house, and also offer a publishing platform to third-party developers.

—San Francisco-based SaveUp, which is building an online rewards program to encourage personal saving, announced that it has collected $2 million in seed funding from Blue Run Ventures and True Ventures. The startup, whose system is still in private beta testing, was founded by Priya Haji and Sammy Shreibati. “Instead of rewards that accumulate over long periods of time, SaveUp is pioneering a unique model where every positive financial action offers the chance to win valuable or life-changing prizes,” the startup said in a statement.

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Inkling, a San Francisco startup adapting college textbooks for the iPad, said today that it has raised $17 million in Series B financing. Tenaya Capital led the round, which was joined by Jafco Ventures, Pearson Education, and Sequoia Capital. Inkling announced two previous funding rounds of undisclosed size, in August 2010 and March 2011.

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Fresh back from vacation last week, I dived back into the Bay Area tech news scene with three long news profiles, an e-book review column, and a smattering of other stories.

—I profiled True Ventures, a six-year-old venture firm focused on early stage infotech companies. With only four full-time partners managing $378 million, the firm has a unique focus on crowdsourcing most day-to-day startup management questions to its own community of CEOs from portfolio companies.

—San Francisco-based Apture, whose Web-based system helps publishers keep people around their sites longer by offering pop-up boxes with information related to any highlighted phrase, rolled out a new feature called HotSpots. Apture’s system now learns which phrases users highlight most and makes them into explicit links. “We are trying to track readers who…declare what’s on their mind by highlighting, and turning their behavior into these social links,” CEO Tristan Harris told me.

—Stipple, the San Francisco startup that helps Web publishers embed links in images, recently announced a bevy of upgrades designed to make it easier for publishers to find images, and easier for brands to tag the objects in them. I described it all in my summary of a conversation with Stipple founder and CEO Rey Flemings.

—In my Friday column I took a look at three recent e-book apps for the iPad that represent some of the best work publishers developers are doing to enhance the reading experience on tablet devices. I reviewed Al Gore’s Our Choice, produced by Melcher Media and Push Pop Press; T.S. Eliot’s The Waste Land, produced by Touch Press and Faber Digital; and Jack Kerouac’s On the Road, produced by Penguin Books and 1K Studios.

—For the App Watch section of our Health IT page, I wrote a short profile of MediBabble, an iPhone app that helps English-speaking doctors conduct medical history interviews with native speakers of Cantonese, Haitian Creole, Mandaran, Russian, and Spanish.

—In funding news, Animoto raised $25 million, RockMelt raised $30 million, and Connected raised $500,000.

—In acquisitions news, Alibaba subsidiary Vendio bought SingleFeed, and Dimension Data of Johannesburg, South Africa, bought OpSource.

—In IPO news, Zynga filed a long-waited S-1 registration papers indicating it intends to go public and raise $1 billion in the process. Also, data storage and management company BlueArc restarted its own IPO preparations after three years on hold.

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Technology changes quickly, and sometimes, so does my own mind. In January, I wrote a dismissive column about two e-book titles tailored for the Apple iPad, Alice for the iPad and Why the Net Matters. My main beef was that the apps, which had been lauded by the New York Times as “superbooks,” contained more glitz than substance. With its rich multimedia capabilities, the iPad has the potential to transform the experience of reading, but these titles fell so far short of the mark that I feared they’d permanently turn off the growing number of people who would like to read books on this powerful tablet.

In the past few months, however, publishers have introduced at least three new titles that bolster my confidence in the future of iPad e-books. Ironically, only one of the three is by a living author: Al Gore’s Our Choice, a book in which the former vice president urges people to take action to combat climate change. The other two are multimedia reworkings of literary classics from the 20th century: T.S. Eliot’s The Waste Land and Jack Kerouac’s On the Road. Together, they provide a great survey of the interactive techniques publishers can use to make a book’s core textual content much more interesting and memorable. In fact, these three titles are so good that I think the publishing industry can look to them for an early set of best practices for building tablet-based books, which I’ll attempt to outline below.

And of course, they’re fun to read. With prices ranging from $4.99 for Our Choice to $13.99 for The Waste Land, these books might seem pricey compared to the typical 99-cent mobile game. But they deserve a place in any serious iPad aficionado’s app collection.

I’m thinking now that my January column was premature. It’s easy to forget that Apple’s remarkable tablet device is only 15 months old. It takes time for designers, developers, and publishers to figure out a new platform’s strengths—and when it comes to books, they’re competing with a medium that’s had half a millennium to mature. So I think it’s natural that we’re only now seeing some real innovation in the category of standalone, “appified” e-books (as distinct from the more conventional static texts that you can easily download and read using Apple’s iBooks app or Amazon’s Kindle app).

For sheer multimedia richness, Our Choice is the standout among these three e-book apps. The book is littered with “wow” moments right from the opening screen, which shows a spinning Earth, complete with the reader’s location as a pulsing blue dot. There are slick videos, arresting full-screen photographs, and extensive narration from Gore himself. One memorable information graphic shows 2,300 years of world population statistics; as you scroll forward through the years by swiping your finger from right to left, the chart’s y axis compresses to dramatize the exponential growth since 1800.

Nearly every image, chart, and graphic in the book includes similar interactive elements, and they’re all tied together by a long, scrolling ribbon of thumbnails along the bottom of the screen that functions in place of a table of contents. It’s a tour de force in interaction design the likes of which I haven’t seen since the golden era of CD-ROM edutainment titles in the mid-1990s.

It would be wrong, of course, to focus on the multimedia bells and whistles to the exclusion of the book’s message. The app’s main text is lifted directly from the print edition of Our Choice, which first appeared in late 2009. It’s a solution-oriented sequel to Gore’s alarming 2006 film/book/lecture An Inconvenient Truth. The main point is to survey the technology and policy steps governments and their citizens must take soon if we’re to have any hope of slowing greenhouse-gas emissions and heading off catastrophic changes in world climate. If the interactive elements actually got in the way of this critical story (as they do in Alice for the iPad and Why the Net Matters) I’d be worried. But in practice, … Next Page »

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Kno, the Santa Clara, CA-based e-textbook startup founded by Chegg co-founder Osman Rashid, today announced the release of a beta version of Textbooks, an Apple iPad app that will serve as one platform for Kno’s library of digital textbooks. The app includes social commenting features, higlighting and sticky notes, and other study aids, and Kno says the catalog of discounted e-textbooks accessible from the app includes 70,000 titles. In April, after abandoning plans to build its own e-book reading device to compete with the iPad, Kno raised $30 million from investors including Andreessen Horowitz, Intel Capital, and Advance Publications.

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A really interesting variety of startups made their initial pitches to the broader investing crowd yesterday at the Northwest Entrepreneur Network’s First Look Forum. The 12 presenters represented a wide array of sectors, from food to retail to software services and—seriously—nuclear fusion power. “I don’t think we could have imagined a more diverse slate, in every sense of the word, than what we have today,” NWEN executive director Rebecca Lovell said.

The event itself was the culmination of a long coaching process that readies a select group of companies and entrepreneurs for their turn in front of the investor audience. And there’s a real emphasis on showcasing many different kinds of businesses—which is notable in an investing scene (and media landscape) that can seem dominated by techies.

Each of the 12 companies on display had five minutes to give a pitch (with slides), and then five finalists were grilled by a panel of venture capitalist judges: Mark Ashida from OVP Venture Partners, Michelle Goldberg from Ignition Partners, and Bill McAleer from Voyager Capital.

The winner was Guide Analytics, a mobile-connected bracelet and monitoring system that keeps track of edema, a swelling that can lead to hospitalizations, particularly in heart patients. Chief executive Deborah Kessler’s previous work includes time at Rosetta Informatics and NASA—”My advisers tell me I’m supposed to say, ‘I am a rocket scientist,’” she quipped. The device itself boasts low manufacturing costs, even though it has a battery, transmitters, and sensors. Investors did question whether relying on elderly heart patients to have a new smartphone for transmitting critical medical data was asking too much. Kessler said it was possible, however, to work with patients who have a lower-end cell phone. The company won a year of free office space from Martin Selig Real Estate.

I put together these snapshots from the four other finalists, and you can check out the longer list of participants over at NWEN.

—Snuggle Cloud is a private, one-on-one social network for couples—especially those in long-distance relationships. Co-founders Emily Marshall and Kiran Gollu were actually in separate long-distance relationships themselves. Their idea is that, although Facebook is hugely popular, people are not going to post a bunch of lovey-dovey stuff in the wild where anyone else can read it. Snuggle Cloud is … Next Page »

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McGraw-Hill and Pearson, the world’s two largest educational publishers, have both pitched in for a Series B financing round at Inkling, the San Francisco company founded by a former Apple manager to build interactive textbooks for the iPad.

As with Inkling’s Series A round last August, the amount of the investment wasn’t disclosed, but in an announcement today the company called it a “multi-million dollar financing.” Existing investors Sequoia Capital, Felicis Ventures, Kapor Capital, and Sherpalo Capital also participated in the round.

At the same time as it’s been fundraising from strategic partners, Inkling has also been making major strides in its negotiations for publishing rights. When Xconomy profiled Inkling in December, the company had published only six interactive textbooks, four of them from McGraw-Hill. Now the company says it has commitments from McGraw-Hill to develop iPad versions of the top 100 undergraduate titles from its higher education division. It’s also developing iPad versions of 24 business titles for MBA courses from Pearson Education, as well as medical textbooks from Lippincott Williams & Wilkins, undergraduate arts and science textbooks from Pearson Education, and medical education and reference books from McGraw-Hill Professional.

A page from the Inkling title 'Music: An Apprecation" by Roger Kamien

The investments and the new commitments signify “a major endorsement from the publishing industry for the Inkling platform,” the company asserted in a press statement today. Founder and CEO Matt MacInnis, formerly a senior manager in international education at Apple, said Inkling is gaining more traction than past digital publishing efforts in education because “We build every textbook from the ground up for the iPad to create a more engaging learning experience.” Illustrations in Inkling books, for example, are often reworked as quizzes, with proper labels appearing only after students guess at the identity of each item.

“The reason we don’t have 10,000 textbooks overnight is that we don’t just plug in to the database of the publisher and suck down PDFs or XML of their existing content and put it on a screen,” MacInnis told Xconomy contributor Elise Craig for the December profile. “The iPad is not a book, and any attempt to shoehorn book content into the iPad in our mind is shortsighted folly.”

As with other types of content available for the iPad, such as music, Inkling textbooks can be purchased in chunks, a chapter at a time. Social features also allow students to access notes on the texts created by their professors or fellow students.

“Creating an interactive, higher-value e-book experience for students is central to our strategy at McGraw-Hill,” said executive Vineet Madan, vice president of McGraw-Hill Learning Ecosystems, in a statement. “We are excited to deepen our relationship with Inkling as we seek to broaden the educational tools and content available on the iPad and other mobile devices.”

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Spend very long talking with Mehdi Maghsoodnia, CEO of San Mateo, CA-based BookRenter, and you might start to think that he’s an economist running some kind of commodities trading floor. He speaks of making markets, taking positions on inventory, liquidation demand, microlending, and managing financial risk. He says things like “I am capturing dispersed demand and matching it to dispersed supply.”

In fact, Maghsoodnia has a computer science background, and BookRenter simply rents textbooks to college students—much like its better-known competitor, Santa Clara, CA-based Chegg. But unlike Chegg, BookRenter doesn’t have warehouses. It doesn’t even have a standing inventory of books. Instead, the startup has developed a computational backend that constantly assesses textbook demand and supply and the risks of loaning out textbooks at low prices; it then directs the flow of books between publishers, bookstores, and students accordingly. The approach gives Maghsoodnia the luxury of thinking more like a banker than the CEO of an e-commerce company. In fact, he calls BookRenter “a very sophisticated microlending platform applied to a commodity that is in high demand.”

Now a syndicate of investors has placed a big bet on that platform. BookRenter announced today that it has closed a $40 million Series C financing round that includes new investors Comerica Bank, Focus Ventures, and Lighthouse Capital Partners. Also participating are return investors Adams Capital Management and Storm Ventures, who put $6 million into the startup’s November 2009 Series A round, and Norwest Venture Partners, which joined Adams and Storm for a $10 million Series B round last June.

BookRenter is growing so fast, according to Maghsoodnia, that the company was able to raise its third round against a valuation three times higher than the one in place for the second round just eight months ago. The company has partnerships with 560 campus bookstores serving six million students, and claims that business is expanding at an annualized rate of 600 percent.

Back in 2010, Maghsoodnia says, “there was a lot of concern” about how BookRenter could catch up with Chegg, which has raised nearly $150 million in debt and equity financing and says it reaches students on 6,400 campuses. “This year, we are growing faster than them, and our market is very robust, I would say better, in terms of our cost structure,” says Maghsoodnia. “We have gone beyond Chegg’s execution and we are looking at how to become a much bigger player in the overall market.”

But no matter how big it gets, BookRenter isn’t likely to surpass Chegg’s name recognition among students. That’s because it prefers to work through campus bookstores, which can use the service to launch their own branded textbook rental sites. Maghsoodnia says BookRenter is happy to forego brand recognition in favor of rapid growth. Given a low-cost, on-campus rental alternative to buying new textbooks or renting from Chegg, students will flock back to their campus bookstores, he says.

“My rental prices are the same as Chegg’s; the difference is that you can pick a book up and drop it off at school, and you don’t have to deal with finding a box and going to UPS and shipping it,” says Maghsoodnia. “On campuses where we are being adopted, Chegg is losing market share.”

To understand why investors are excited about BookRenter’s business model, it helps to think about Netflix’s DVD-rental business. To decide which DVDs to buy and avoid costly overstocking, Netflix has to … Next Page »

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The short business week last week after the Martin Luther King holiday left us with 20 percent less news than usual. Here’s what was left:

—In a rare press interview, Marvell Technology Group CEO and co-founder Sehat Sutardja talked about his hands-on management style at Marvell and the founding of the company as one of the first fabless chip designers back in the 1990s.

—Tilera is one of the last survivors from a crop of multicore chip design companies founded in 2003-2004. We profiled the San Jose, CA-based company, which just collected $45 million in new financing to expand into cloud computing.

—VChatter, a Facebook-based video chat service that markets itself as a “safe” alternative to ChatRoulette, added $350,000 to its seed funding. I interviewed founder and CEO Will Bunker, who’s known for founding OneandOnly.com, the dot-com-era dating site that became match.com.

—We surveyed the blogosphere’s reaction to the news last week that Google’s original CEO, co-founder Larry Page, will take back the reins from current leader Eric Schmidt.

—In a column, I took a close look at two e-book apps for the iPad recently heralded by the New York Times as “superbooks”—Alice for the iPad and Why the Net Matters—and found them wanting.

—Reading device developer Plastic Logic, based in Mountain View, CA, raised $300 million in equity-based financing and debt guarantees from Oak Investment Partners and Russia’s state-owned nanotechnology firm, RusNano.

—In other deals news, Vook raised $5.25 million, Scribd raised $13 million, Scientific Conservation Inc. raised $16 million, Bloom Energy raised $100 million, Kabam raised $30 million, CloudTalk raised $3.8 million, and Sungevity secured a $2 million line of credit.

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Jadedness: it’s an occupational hazard in tech journalism. Other people look at new software or gadgets and say “Wow.” I look at them and say “Hmm, needs work.”

Last weekend’s New York Times Magazine provided a case in point. Writer Virginia Heffernan reviewed 15-Minute Everyday Pilates, a video e-book from Alameda, CA-based Vook, a publishing startup I profiled last August. It was one of the most perceptive pieces I’ve read about Vook, focusing on how the embedded video in this title brought the book’s exercise instructions to life. “People have talked about book-video combos since the days of CD-ROMs, but Vook has quietly found the right content, the right software and the right distribution system,” Heffernan wrote. Right on.

But then, in the recommendations section at the end of the piece, Heffernan had this to say: “Some of the most fascinating books around aren’t books; they’re superbooks—books with so much functionality that they’re sold as apps. Consider: Alice—a beautiful Alice in Wonderland that lets you move the illustrations. Or David Eagleman’s Why the Net Matters, a book about the Internet with photos, animation and even 3D.”

Superbooks? That sounded exciting. I’ve been wondering for a long time whether the advent of the iPad and its big, beautiful, multitouch screen would inspire book and magazine publishers to go beyond their unimaginative early experiments in digital publishing. So I went right to the iTunes App Store and bought the two titles Heffernan mentioned.

And boy, am I underwhelmed.

I mean no disrespect to the creators of these two apps. It’s still early days in the tablet revolution, and book and magazine designers are just starting to figure out how to exploit the iPad interface in ways that add intellectual and aesthetic value, rather than just glitz, to the core text. So all of the criticism that’s about to follow is meant in a constructive spirit. In fact, I think it’s a compliment to the creators that they’ve built apps that are engaging enough to inspire others to ponder what’s missing. Still, as I set out to write about these apps’ shortcomings, I admit to some hesitation, because I know their creators are already dealing with plenty of fear and criticism from the opposite direction—that is, from traditional publishers with a vested interest in killing anything new or risky. Anyway, here goes.

First, Alice for the iPad. It’s an $8.99 app from Atomic Antelope, a London-based app design studio run by former CNET journalist Chris Stevens. Praised by Oprah Winfrey, no less, as an app that will “change the way kids learn,” it’s an interactive rendition of the classic Lewis Carroll book, which was first published in 1865 and is therefore securely in the public domain. That means anyone can recycle the text and illustrations without fear of the copyright police.

Alice for the iPad works well on a basic design level because it respects its source materials. The sepia palette evokes a real Victorian-era children’s book, and all of the user-interface elements, such as the next-page and back-page arrows, are appropriately unobtrusive. What gives the app its ‘Wow’ factor, though, is … Next Page »

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Mountain View, CA-based Plastic Logic, which last year quashed a planned tablet-sized e-reading device based on its plastic semiconductor technology after repeated delays, said today that it has inked a multi-year financing deal with the state-owned Russian Corporation of Nanotechnologies, or RusNano. The Russian firm said it will put $150 million in equity-based financing into Plastic Logic immediately, and will provide another $100 million in debt guarantees. Previous Plastic Logic investor Oak Investment Partners will put in an additional $50 million, and the company will raise $400 million more in equity and debt “over the next few years,” for a total of $700 million, according to a joint Plastic Logic-RusNano announcement. As part of the agreement, Plastic Logic will build a display factory in Zelenograd, Russia. “Flexible plastic electronic displays will provide another major milestone in how people process information,” RusNano managing director Georgy Kolpachev said in a statement. “Entering this new disruptive segment at the stage of its inception gives Russia a chance to win a leading position in global market of future electronics.”

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Alameda, CA-based Vook, which publishes multimedia-enhanced e-books for the iPhone, iPad, Kindle devices, and the Web, has raised $5.25 million in Series A financing, Dow Jones VentureWire is reporting today. Founder and CEO Brad Inman told the publication that the funds came from VantagePoint Venture Partners and Floodgate Fund, and will be used to expand sales efforts and technology development. The 23-employee startup, which Xconomy profiled in August 2010, previously raised $2.5 million in seed funding from individual investors.

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Storytelling has a “storied” past. In written form, it dates back some 10,000 to 12,000 years to ancient petroglyphs (also known as cave paintings). Personally, I have a passion for storytelling as a means to communicate, educate and socially engage all at the same time. As an interactive and content marketer, I appreciate storytelling as a vehicle to share authentic accounts of life experiences. As a father, I delight in storytelling as a way to jumpstart my kids’ creativity, teach them important skills and lessons, and encourage them to have boundless goals.

In 2006, my enthusiasm for storytelling compelled me to join Cambridge, MA based Panraven, a company that, through an intuitive, flexible interface, lets consumers combine media (text, photos, audio and video) into one rich expressive story. “Our Guardian Angel,” a personal account written by Panraven member, SilverWaves, about her friend’s tragic car accident, will stay with me forever. Below are two of my favorite quotes that to me capture the power of storytelling:

“We are lonesome animals. We spend all of our life trying to be less lonesome. One of our ancient methods is to tell a story begging the listener to say-and to feel- ‘Yes, that is the way it is, or at least that is the way I feel it.’ You’re not as alone as you thought.” -John Steinbeck

“Because there is a natural storytelling urge and ability in all human beings, even just a little nurturing of this impulse can bring about astonishing and delightful results.” -Nancy Mellon, The Art of Storytelling

Storytelling Meets the iPad

Here we are in 2011, at the onset of the second wave of digital publishing. The iPad, with its touchscreen, accelerometer, and other advanced features, has ushered in a whole new era of storytelling, one with unprecedented potential to captivate in an immersive learning environment. Publishers are creating rich, interactive apps that make e-book readers, which merely simulate traditional book reading, seem so 2010. Today’s apps are even tailored to different types of learners, from visual to auditory. With an iPad app, one child can read and interact with stories independently, while another can have them read aloud and/or accompanied by music. Other perks, such as short-length videos, quizzes, challenges and games, are often included in addition to the core content. (I will continue to focus the rest of this article on children’s books, because it is one of the categories that stands to benefit most from the iPad’s capabilities.)

Two companies in the children’s app space with stellar execs and killer apps worth the money are Callaway Digital Arts and Ruckus Media Group. Callaway, a spinoff of Callaway Arts & Entertainment, recently received $6 million in Series A funding in a round led by Menlo Park, CA-based Kleiner Perkins Caufield & Byers, and is set to open an office in San Francisco. John Lee, CEO of Callaway and a toy industry veteran has called the newly created company “a cross between publisher Random House and animated film studio Pixar.” Ruckus CEO Rick Richter, spent twelve years at Simon & Schuster, including as President and Publisher of the Children’s Publishing Division. According to Richter, the Norwalk, CT-based company has received only seed financing to date.

The typical industry business model includes releasing titles for both owned and licensed brands. Callaway has rights to create stories for kid favorites Thomas & Friends, Sesame Street and Miss Spider. Apple recently named Miss Spider’s Bedtime Story, the only Callaway title out long enough for consideration, one of the Best Interactive Story Apps of 2010. Ruckus Media has enlisted talent such as … Next Page »

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As the holidays (you know, that breather right before CES) approached, Bay Area entrepreneurs and investors rushed to announce a series of product rollouts, openings, deliveries, and deals last week.

—Palo Alto, CA-based mSpot rolled out a cloud music service catering to iPad, iPhone, and iPod Touch owners, beating Apple to the punch.

—Nissan delivered its first Leaf all-electric vehicles to U.S. customers, starting with Redwood City, CA, resident Olivier Chalouhi, as Bruce reported.

—Speaking of cars, Google Ventures and August Capital invested an undisclosed sum in car-sharing network RelayRides, prompting the Cambridge, MA-born company to announce it’s moving to San Francisco, as Erin reported.

—I toured TechShop’s new San Francisco location and interviewed founder Jim Newton and CEO Mark Hatch. At the “health club for makers,” tinkerers and craftspeople of all stripes can purchase access to a huge array of shop equipment for $100 per month.

—In my weekly column, I argued that there’s too much “friction” slowing the progress of startups in New England, and perhaps not enough in Silicon Valley.

—I profiled Tibion, a Sunnyvale, CA, startup developing a wearable, battery-powered “bionic leg” that’s thought to help stroke patients relearn how to control their own motions.

—Freelancer Elise Craig took a look at Inkling, a San Francisco company creating interactive e-textbooks for the iPad. It’s headed by an Apple veteran, Matt McInnis, who says the company has invented “a whole new way to publish content.”

—A survey by Sausalito, CA-based jobs site Glassdoor found that Facebook has the nation’s happiest employees. Must be the stock options and that astronomical valuation.

—At a search conference in San Francisco, Microsoft and Boston-based Everyscape announced that the Bing search engine will now feature Everyscape’s interactive tours of business interiors.

—Here at Xconomy San Francisco, we hit the half-year mark, and celebrated with a look back at the top 10 infotech and life sciences stories since our June 14 launch.

—A federal judge dismissed a patent infringement lawsuit filed by Paul Allen’s Interval Licensing against 11 big-name firms, including Apple, eBay, Facebook, and Google. The suit lacked specificity, according to the judge; Interval has until December 28 to file an amended complaint.

—Twitter raised a whopping $200 million in new venture financing, with first-time investor Kleiner Perkins Caufield & Byers leading the round. According to media reports, the San Francisco-based microblogging startup is now valued at $3.7 billion.

—In a rush of other year-end funding deals, EmSense raised $4 million, Soladigm raised $30 million, Intelleflex raised $11.5 million, Victrio raised $5 million, Sungevity raised $15 million, and Clustrix raised $12 million.

—In acquisitions news, Chicago-based Tribune Media Services bought San Francisco’s CastTV, and San Antonio, TX-based Rackspace acquired Cloudkick, also of San Francisco.

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Throughout the two years Matt MacInnis spent working as senior manager in international education at Apple, he had plenty of opportunity to watch teachers integrate technology into their classrooms as a learning tool. And he found it wholly disappointing.

“If you walk into a classroom today, and then you roll back the clock and walk into a classroom 50 years ago, you’d see certainly some modernization, but it would not be remarkably different,” he said. Technologies like radio, television, and computers offered great promise in the classroom, but haven’t dramatically changed the learning experience, which is still stuck in a model where “we download information into somebody’s head and they’re supposed to march off into the world and manufacture cars,” in MacInnis’s words.

More interactive tools could engage students and fundamentally change the way they interact with their teachers—and each other—while they learned, he believes.

With the promise of Apple’s new iPad looming, MacInnis quit his job in 2009 and founded a company called Inkling, a San Francisco-based startup that has developed a software platform for digital textbooks on the iPad.

Electronic versions of books are nothing new—look at the Kindle—and other companies such as CourseSmart also offer e-textbooks. But Inkling’s product is more than a static PDF rendition of the bound text. Where most digital versions of a biology book would show the same diagram of the parts of the brain that appears on the printed page, for example, Inkling’s version can remove its labels and ask its user to identify the cerebellum by touching it. If the user gets the question wrong, the Inkling software can offer hints. Wonder what parts of a history text the professor thinks are most important? Students can check the professor’s own notes. Want to share notes with a friend, or take a quiz at the end of a chapter? Flip around a model of a molecule? Inkling allows students to do that too.

For MacInnis, it’s less about reproducing a book than creating an interactive experience a student can have with a book.

So far the company only has six texts available, four published by McGraw Hill, one from Cengage Learning, and one from Wiley. “The reason we don’t have 10,000 textbooks overnight is that we don’t just plug in to the database of the publisher and suck down PDFs or XML of their existing content and put it on a screen,” MacInnis says. “The iPad is not a book, and any attempt to shoehorn book content into the iPad in our mind is shortsighted folly.”

Developing a platform that allows this much interactivity required Inkling to create a whole new way to publish content. The company didn’t want its end product to be a book—it had to be a “whole new thing that has video and audio and interactivity and … Next Page »

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Sometimes Google gives the appearance of being a loose confederation rather than a single company, as if its product units are all vying to make news at the same time. That’s definitely the case this week.

Monday saw three big developments at the Googleplex in Mountain View. First came the launch of the Google eBookstore, along with dedicated e-reading apps for multiple platforms, including Android, Apple iOS, Web browsers, and Sony and Barnes & Noble e-book readers. Then, an hour later, Google announced the Nexus S, a new Samsung smartphone that’s the closest thing in existence to a “pure Google” phone, according to Google engineering vice president Andy Rubin. Coinciding with the phone’s debut was the public release of Gingerbread, the code name for the new version of the Android operating system, which powers the Nexus S.

And today, at a press event held three blocks from Xconomy’s San Francisco headquarters, the company took the wraps off a long-awaited Web app store—and shared a detailed look inside its vision for Chrome OS, which will power a line of notebook computers coming next year.

Let’s take a closer look at each of these developments, in reverse chronological order.

Chrome OS. For the first time today, Google shared its vision for a new generation of notebook computers powered not by Windows, Mac OS X, or Linux, but by Chrome OS—the operating system modeled after its popular Web browser, which is now used by 120 million people worldwide. Google plans to distribute a limited number of Chrome notebooks (with the geeky name Cr48, after an isotope of the element chromium) to business partners, developers, journalists, and other early adopters almost immediately. Consumer versions are coming from Samsung and Acer starting in “mid-2011,” according to Sundar Pichai, the Google vice president of product management who emceed today’s event.

The guiding assumption behind Chrome OS is that everything PC users need to do today can be done from inside a Web browser. Chrome-powered notebooks will boot directly into the Chrome browser, and users will access the software and information resources they want either through the Web or through Web apps (i.e. browser plugins) that can be easily downloaded over the devices’ built-in 3G or Wi-Fi connections.

Chrome OS devices will cache applications and data for offline use, but they’ll be optimized for an always-on world. “Computers aren’t that useful when you’re not connected, so we’ve put in a lot of work to make sure users are always connected,” Pichai said. Google is partnering with Verizon to offer Chrome notebook owners no-contract 3G data plans, he said.

Google thinks Chrome devices will be more secure than traditional PCs since the operating system and all of a user’s Web apps will be updating automatically and seamlessly, protecting them from … Next Page »

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