It’s been a busy week around here for the big tech companies. At Xconomy, we don’t usually report on things like product releases from Microsoft or sales figures from Amazon—our main focus is on new ideas, models, and companies—but readers need to understand where the big players are heading so they can see the gaps and opportunities for new businesses. So, for each of these pieces of mainstream tech news, I’ll tell you why savvy innovators and business leaders should care.

—Google (NASDAQ: GOOG) demonstrated its Web-based Chrome operating system for the first time in public yesterday. It won’t be available for another year, but the tech community is scrambling to understand all the implications. (Google’s Seattle engineers have contributed technology to the Chrome Web browser, helping to boost security—one potential advantage of a cloud-based operating system).

Sure, a fully cloud-based OS is a direct threat to Microsoft’s business model and the ecosystem of companies that support Windows. But more than that, it could reshape the landscape of online advertising by providing a new platform for launching ads on mobile devices, video channels (YouTube), and Internet TV. Perhaps the only thing that can slow down Google’s dominance on the Web is the federal government. In other words, this could get ugly.

—Microsoft (NASDAQ: MSFT) has teamed up with LinkedIn to provide info about your business contacts within Outlook e-mail. It’s all part of Microsoft’s Outlook Social Connector, an add-in that feeds you data from your social networks. Integrating e-mail with social networks and search is a fast-growing area, with startups like Gist in Seattle (backed by Paul Allen and Foundry Group) helping lead the way. Gist’s CEO T.A. McCann told TechFlash that he’s known about Microsoft’s effort for a while and doesn’t see it as a direct challenge. Gist’s offering is more advanced, he said, and it includes features like integrating with Salesforce.com and the iPhone. But startups and investors beware: if you’re in this crowded space, you better have a product that cuts through the noise and has a way to attract customers fast.

—RealNetworks (NASDAQ: RNWK) is in discussions with Viacom’s MTV Networks to sell off at least some of its stake in the Rhapsody music service, as first reported by PaidContent. In a regulatory filing, prompted by a tender offer to issue new stock, Real said it is in talks to reorganize the management structure and/or corporate governance of the division, which might mean giving up its majority ownership stake (51 percent) in Rhapsody. Back in September, digital-media guru Bill Baxter (now at Seattle-based Cozi) wrote in Xconomy about Rhapsody’s fierce competition with Pandora, iTunes, and piracy. Message to startups: the world of digital music services is probably not where you want to be.

—Amazon (NASDAQ: AMZN) has been busy ramping up operations ahead of the holiday shopping season. Its billion-dollar acquisition of Zappos is helping it expand into shoes and apparel, and its Kindle sales look poised to take off, especially now that Barnes & Noble’s competing e-book reader, the Nook, has sold out until January. Amazon has really become the business and technology model to follow in online retail and product search. While there is still room for e-commerce startups to compete in various niches, they would be wise to study how Amazon built its brand and customer relationships before branching out to the wider world of retail.

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Seattle-based venture capital firm Maveron has been in the news a lot this month. There have been reports about its latest stealth startup, which is a new type of e-commerce play. Another report from VentureWire said Maveron will be selling its shares in Motley Fool—a deal that will generate cash for Maveron, which led a $26.5 million financing of the online investing website in 1999. And then, just yesterday, I got a press release about Maveron expanding to San Francisco and Silicon Valley.

The VC firm, co-founded by Howard Schultz of Starbucks fame, is used to this sort of attention. But the San Francisco news was a bit confusing to me, because Maveron has been active in the Bay Area for a long time. As usual, the interesting stuff is in the follow-up. I had a chance to connect yesterday with Dan Levitan, a fellow co-founder of Maveron and the mastermind of the firm’s consumer-focused investment strategy. Besides the new San Francisco office, I also asked Levitan about the Seattle e-commerce startup his team is currently building; his outlook and themes in the consumer tech space; and his first fateful meeting with Schultz back in the early 1990s.

First, some basic stats. Maveron was founded in 1998 by Levitan and Schultz, and is best known for its early investments in eBay, drugstore.com, Shutterfly, and Cranium. Its current portfolio companies—there are 22 active around the U.S.—include Potbelly Sandwich Works, Pinkberry, LiveMocha, and Altius Education. The venture firm has about $750 million under management.

Levitan explained that opening Maveron’s San Francisco office has been a two-year process, but it doesn’t signify any shift in the firm’s geographic focus. “I don’t see this announcement as anything more than opening an office where we’ve already done business,” he said. “We’re one firm with two offices.”

The San Francisco office is headed by Amy Errett, a veteran of Olivia.com and E*Trade, who was announced as a Maveron partner last year. She is joined by new principal Ben Choi, who was previously with Storm Ventures, In-Q-Tel, and RRE Ventures. As Levitan puts it, instead of Errett flying up to Seattle four times a month, she’ll fly up three times a month (and the Seattle team will fly down the fourth week).

But Levitan emphasized that he’s looking in his own backyard for new investments as much as ever. “Seattle is an economy and region that’s very rich with groundbreaking, innovative consumer companies,” he said, pointing out obvious examples like Starbucks, Nordstrom, Amazon, and Costco. One less obvious company he mentioned was online real estate broker Redfin, which isn’t in …Next Page »

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I was chatting with a couple of local investors at the TechStars (seed fund and mentorship program) event in Seattle on Wednesday. They thought the VC panel discussion of the startup climate and culture in different cities around the country was boring. If you’re an entrepreneur or investor, they said, that’s just where you are, and you deal with it.

But au contraire, mon frère—as a journalist and outside observer—I view those comparisons across different innovation clusters and their respective histories as a way to generate some good stories and insights. On the panel, there were certainly some constructive (and at times controversial) things said about the entrepreneurial climate in Seattle, Boston, and Boulder.

Here are a few edited highlights from the panelists, several of whom bring an outside perspective to their current cities:

Brad Feld of TechStars and Foundry Group gave a brief history of the startup scene in Boulder, CO—useful for any city with entrepreneurial aspirations. “When I showed up in ’95, what I found was on the software side you had a lot of smart engineering talent but you didn’t have much else. A handful of entrepreneurial companies in storage and cable infrastructure. Not much in the way of entrepreneurial executive leadership other than from these pockets. In the mid-90s, because of the counter-culture community—and the Internet was purpose-built for places like Boulder—you had a lot of people who were independent, very smart, doing their own things suddenly intersecting with a medium that allows you to be anywhere. It’s 100,000 people plus 25,000 college students. A pretty small town, but it has the largest percentage, per capita, in the United States of computer scientists and PhDs. Yet there wasn’t a broad wave of entrepreneurial experience,” Feld said.

“In the mid-to-late 90s, there was huge activity around the Internet. Anybody with a pulse could get a company started. The predictable thing eventually happened, there was a lot of wreckage. But from ‘95-2001, Boulder had imported a lot of executive talent—CEOs, VP sales, engineering leadership. We also had a lot of entrepreneurs who had one or two companies in that cycle. So by 2003, people were starting to come back and get re-engaged in entrepreneurial activity. There were probably 50-plus people that made $10 million or more, so there was enough of an angel community. There was critical mass around this. But what was missing was something that tied the community together. There was the endless cocktail party circuit of entrepreneurs. Eventually people got bored and stopped going.”

That led David Cohen, Feld, and others to form TechStars in Boulder. “It cemented this notion of first-time entrepreneurial activity is the core of the ecosystem. What was needed was fresh meat into the system. We got a lot of new, young people into the community,” Feld said. “The other thing was that one of the hardest things for first-time entrepreneurs is to have an engaged relationship with an experienced entrepreneur. We found we were creating this thing that integrated the whole value chain of entrepreneurs. It really energized the existing entrepreneurial activity around a thing.”

Chris Sheehan of CommonAngels then gave his thoughts on the Boston innovation scene. [Disclosure: Chris is on Xconomy’s board.] “In the IT ecosystem in Boston, there are a number of things going on,” Sheehan said. “It’s a wonderful place for universities and colleges. MIT has been the granddaddy in terms of the entrepreneurial ecosystem. But what I’m seeing is a fresh set of energy coming …Next Page »

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Seattle-based Movaya Wireless, a mobile software startup, has been acquired by Digby, a mobile commerce firm based in Austin, TX. Financial terms were not announced. Movaya was founded in 2006 by Phil Yerkes and Stanley Wang, and recently has been focused on making digital goods storefront applications for the iPhone, Android, and other mobile Web platforms. The company has a development team in China that will serve as the basis for Digby’s operations in Asia.

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It was a quiet week for deals in the Northwest, but we dug up some important ones in business software, wireless, and biotech.

—Seattle-based Amazon’s (NASDAQ: AMZN) acquisition of Zappos, the online apparel and shoe seller based in Las Vegas, has closed. The deal, first announced back in July, is valued at $1.2 billion in Amazon stock.

—Bellevue, WA-based Onehub has raised $1.3 million in Series A funding from Ignition Partners and angel investors. The company was founded in 2007 and makes Web-based software for business collaboration and file-sharing.

—We took a close look at small financing deals in the Northwest, worth between $100,000 and $1 million, that have flown under most people’s radar in the past month. According to stats from ChubbyBrain, a New York-based information and data services company tracking the innovation economy, the following companies raised a small amount of equity in September: Acucela, Adometry, BallLogic, InEnTec, Inson Medical Systems, Second Porch, Site 9, SynapticMash, Smilebox, Vantos, and WA 32609.

—Seattle-based Kineta, a biotech firm developing drugs to fight autoimmune diseases, has formed a strategic alliance with MPI Research, based in Michigan, as Luke reported. Financial terms of the deal weren’t given, but Kineta said it will receive support for animal studies that will enable the company to begin clinical trials next year.

—Portland, OR-based RF Arrays raised $6.5 million in equity, options, warrants, and/or other rights to acquire securities, according to a regulatory filing. The investors were not disclosed, but New York-based New Science Ventures has previously backed RF Arrays, which develops wireless communications technology.

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Seattle-based Amazon (NASDAQ: AMZN) said today its acquisition of online apparel and shoe seller Zappos, based in Las Vegas, has closed. The Zappos management team will remain intact, the company said. In a blog post, Zappos CEO Tony Hsieh said his board of directors has been “switched out,” and that the deal, worth about 10 million shares of Amazon stock, is valued at $1.2 billion, based on Friday’s closing price.

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GSI Commerce (NASDAQ: GSIC), an e-commerce company that powers the online stores for dozens of prominent consumer brands, announced yesterday that it will purchase Boston-based Retail Convergence Incorporated (RCI) for $180 million in cash and stock and up to $170 million in follow-on payments, depending on RCI’s performance.

RCI owns both Rue La La, a private website that sells discounted premium designer clothing and accessories, and Smart Bargains, a more affordable online clearinghouse for clothing, jewelry, and home and kitchen goods. Rue La La is famous for being an invitation-only site generally limited to high-net-worth individuals. But GSI said yesterday that for a limited, 48-hour period, anyone can join Rue La La by going to www.ruelala.com/gsi.

RCI was funded in part by venture firm General Catalyst of Cambridge, MA. In a remarkably detailed press release, GSI, which is based in King of Prussia, PA, outlined the goals RCI will need to meet in order to earn the company’s shareholders the full $350 million purchase price. GSI said RCI is on track to earn at least $15 million in 2010 before interest, taxes, deductions, and amortization. But if it can hit $18.3 million in income that year, it will earn an additional $40 million in payments. If it earns $34.4 million in 2011, it will get an additional $55 million, and if it earns $51.9 million in 2012, it will get a final $75 million.

Smart Bargains was established in 2000 and purchased by RCI in 2008. Rue La La, which opened for business in early 2008, is one of the leading examples of a relatively new species of “curated marketplaces” that hold limited-time sales, often of overstocked or distressed merchandise, and often to a restricted clientele. It competes with similar sites such as Gilt.com, owned by New York-based Gilt Groupe.

Rue La La has more than 1.2 million members, according to GSI, and these members are extremely loyal, perhaps explaining how RCI attracted such a large purchase price: on any given day, GSI said, approximately 10 percent of Rue La La’s members visit the site, and have demonstrated a high repeat purchase rate.

Gilt has a slightly larger member base and daily traffic rate, according to Web traffic analytics firm Compete.com, but both sites have continued to grow unabated throughout the recession.

Ben Fischman, RCI’s CEO, said in GSI’s announcement that “The private sale sector is changing e-commerce through exceptional levels of virality, dynamic customer experience and highly engaged members.” He said that joining GSI would give RCI access to GSI’s technological infrastructure as well as its marketing services and brand relationships. GSI CEO Michael Rubin said Fischman will stay on as manager of Rue La La and Smart Bargains, and that RCI’s team of almost 200 sales associates will “remain intact” following the acquisition.

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There’s a new tech startup incubator in town. The Founder Institute is accepting applications for its four-month training program, which begins in Seattle on December 7. The program is designed to mentor very early-stage entrepreneurs, with the goal of creating new companies across a wide variety of tech sectors including software, social media, consumer electronics, e-commerce, medical devices, and cleantech.

The program fits with a trend of increasing resources for entrepreneurs in the Seattle area. The Founder Institute was started by Adeo Ressi, the founder of the venture capitalist rating site TheFunded. The incubator recently completed its first session in Silicon Valley, graduating 54 companies (three of which have since rustled up outside funding), and has also announced expansions to San Diego and Washington DC.

Chris Early is leading the Seattle program. He’s a game industry veteran who was most recently general manager of Windows Gaming Technology at Microsoft. He left the company earlier this year, and caught up with Ressi around a month ago over drinks. (The two had known each other for years from the game industry.) Early suggested that Ressi should expand his program to Seattle, and it sounds like it didn’t take much convincing. “It’s been a whirlwind month putting it together here,” Early says.

As he explains, the concept behind the Founder Institute arose from what Ressi was seeing with TheFunded. “A large number of people were coming through at a pre-company stage,” and they were looking for mentorship and money to get started, Early says. So the Founder Institute provides classes on every step of the startup process, led by experienced mentors, including Derrick Morton, the CEO of FlowPlay, and Bryan Starbuck, the CEO of TalentSpring. About a third of the mentors will come from out of town, including David Kidder of Clickable.com and Bryan Thatcher of Empressr (both from New York). The ideal students are entrepreneurs with new companies—less than two years old—or just promising ideas. The goal is for every student to have a business plan and a polished pitch for their company by the end of four months.

OK, so everyone knows entrepreneurs, especially first-timers, need a lot of mentorship. But what’s different about the Founder Institute compared with incubators like Y Combinator …Next Page »

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The Oregon Entrepreneurs Network (OEN) has announced its lineup of 12 presenting companies for the Venture Northwest 2009 investment forum, to be held on Oct. 29 at The Nine’s Hotel in Portland, OR. The Seattle-area companies are Calidora Skin Systems, Doxo, Lucid Commerce, and MicroGreen Polymers, while the Portland-area companies are Advanced Inquiry Systems, Cularis, DesignMedix, Elemental Technologies, Giftango, Prolifiq, Second Porch, and Wicked Quick.

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In the past week, the Northwest has seen its share of debt financings in medical devices and bio-IT, small funding deals and partnerships in Internet software, and mounting interest in an impending IPO.

—Amazon (NASDAQ: AMZN) rolled out a new mobile payments service that lets applications developers and distributors tap into the e-commerce giant’s one-click checkout system on mobile devices. As part of the rollout, Amazon has formed partnerships with mobile content distributors like Kansas City, MO-based Handmark, which sells games, apps, ringtones, and the like. Financial terms were not given.

—Seattle’s Theraclone Sciences formed a partnership with Tokyo-based Zenyaku Kogyo, worth up to $18 million over time, to discover antibodies that could protect millions of people in a flu pandemic, as Luke reported. Under the deal’s terms, Theraclone has given Zenyaku an option for exclusive rights to new flu antibodies in certain Asia-Pacific countries, while Theraclone gets an undisclosed amount of upfront cash and royalties on future product sales in Zenyaku’s territories.

—Seattle-based Omeros, the developer of anti-inflammatory treatments and other biotech therapies, is on the docket to go public this week and raise more than $80 million, as Luke reported. The company is also defending itself against accusations from its former chief financial officer that it filed false records with the National Institutes of Health and then wrongfully terminated him after he reported it to the board’s audit committee under the company’s whistleblower policy.

—Seattle-based Teranode raised $900,000 in debt financing, as Luke reported. The investors weren’t disclosed, although Bellevue, WA-based Ignition Partners has invested in the past. Teranode, a maker of software to organize life sciences labs, was founded in 2002 out of the University of Washington.

—Seattle-based Founder’s Co-op, a seed-stage investment organization, has backed two local Internet startups, Nearlyweds and BigDoor Media. Financial details of the deals were not announced, but Founder’s Co-op says it typically invests $250,000 or less in its portfolio companies.

—Redmond, WA-based Spiration raised $7 million in debt financing out of a $10 million offering, as Luke reported. The financing came from the company’s partner in Europe and Japan, Olympus Medical Systems. Spiration, which makes an implantable device to treat deadly lung diseases like emphysema and chronic bronchitis, has raised about $97 million since its founding in 1999.

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Allurent co-founder Joe Chung today stepped down (or rather up to executive chairman) as CEO of the online shopping interface and e-commerce company, Xconomy has learned. Graeme Grant, formerly the chief operating officer, has been named to take his place at the helm of the Cambridge, MA-based company.

Reached by phone, Chung, an Xconomist, confirmed that the staff had been told about the change today. (There has not yet been an official announcement, and Chung was still listed on the website as CEO at the time of this writing.) “I hired Graeme to take over the company someday a couple years ago, and that day is now,” Chung says. He calls the changeover business as usual, however. In his new title of executive chairman, Chung will be concentrating on big deals, partnership relations, and overall strategy—pretty much what he was focusing on already.

“I’m still an employee. I’m still there full time,” he says. “The reality is that our roles are completely unchanged. Graeme’s been running the company for well over a year anyway.”

Grant takes the helm as Allurent, which creates shopping interfaces and “experiences” such as virtual shelves and improved displays for online retailers, is in the midst of a transition. In March, during what Chung says was “pretty much the worst time you can imagine launching a new product in retail,” the company moved to an all-Software as a Service (SaaS) model that provides web retailers with plug-and-play interactive merchandising widgets that they can rent on as as-needed basis.

“We’re really in an environment where retailers need to get more out of every single customer that comes to their site,” he says. To that end, the online shopping world is shifting, from a time when e-retailers just put up products and a shopping cart on the web and figured customers would find them to the point where they have to actively manage each customer relationship. That involves creating better interfaces to attract and retain customers, and making shopping more easy and fun.

Chung says the new product line—Allurent on Demand—has been growing well despite the recession, and he predicted great things for Grant. “I’m very happy for Graeme in the sense that this is his first CEO gig, and he’s going to do a great job,” he says. “He’s a real rising star, and you’ll see a lot of him in our industry for sure.”

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Seattle-based Amazon has started a mobile payments service that allows consumers to make purchases from their mobile devices using their Amazon accounts, according to a statement released today. More significantly, the service also gives developers, retailers, and distributors of mobile applications a way to process mobile payments from customers using Amazon’s online checkout system—without having to ask for their credit card numbers, which Amazon (NASDAQ: AMZN) already has.

It’s a bold strategic move for the e-commerce giant, which has been relatively quiet in the mobile space up to this point. It also puts Amazon directly up against big competitors like PayPal, Apple’s iTunes store, and Google’s Checkout service. One of the first mobile content distributors to use Amazon’s Mobile Payments Service is Kansas City, MO-based Handmark, which sells mobile games, applications, ringtones, and the like. By forming partnerships with other online stores like Handmark, Amazon could potentially reach a very broad mobile market since its payment service should work on many different types of devices and carrier networks.

Amazon has been diversifying across Internet retail lately. In recent months, it has made strong thrusts into shoes and clothing (with its acquisition of Zappos), electronics, and, of course, digital books with new variations of the Kindle. It would seem well-positioned to open, or buy, its own mobile app store in the future. Perhaps today’s announcement is a first step in exploring such a strategy.

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For some reason, it has been even harder than usual to keep up with Amazon (NASDAQ: AMZN) this month. Here’s a quick roundup of the week’s most interesting news regarding the Internet giant’s place in the e-book and retail world.

—Every day, it seems like a new e-book reader comes on the market to compete with Amazon’s Kindle—and further complicate the options and proprietary format issues for consumers. A New York Times piece this week examines Amazon’s strategy of pushing its own Kindle format while also acquiring Mobipocket and Lexcycle, companies that sell e-books and reader software for smartphones. The piece quotes Neelan Choksi, Lexcycle’s co-founder who’s now based in Seattle, about giving e-book consumers options.

—Last week, TechFlash published a graphic entitled “E-Book Universe,” which maps out the role of the various players in reader devices, content providers, mobile applications, and wireless carriers, and how they all relate to one another. It’s not a comprehensive chart, but it gives you an immediate sense of how convoluted the industry has become.

—Amazon has always been about more than just books (digital or not). Last weekend, the company launched its own line of electronics accessories, called Amazon Basics, as reported by The Wall Street Journal and other outlets. For now, the product line will focus on inexpensive items like blank DVDs and audio-video cables. “We saw an opportunity to create a line of consumer electronics basics that combine quality and low prices for an overall focus on value,” said Paul Ryder, Amazon’s vice president of consumer electronics, in a statement.

—In a feature published last Sunday, The New York Times asks whether the company will become the “Wal-Mart of the Web.” The article points out that Amazon threatens to put big retailers out of business the same way it has outcompeted independent booksellers and other stores. The Times notes that in the quarter ending in June, Amazon’s worldwide sales of books, music, videos, and other media grew 1 percent, to $2.4 billion, while its sales of everything else (electronics and general merchandise) grew by 35 percent to $2.07 billion, and are projected to take the lead later this year.

As Xconomy has reported previously, large retailers like Target, Borders, and Toys ‘R’ Us have ended their Web partnerships with Amazon in an effort to better compete with the Internet giant, which is now in the process of integrating its biggest acquisition to date—online clothing and shoe store Zappos.

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‘Tis the season for startup-pitching events. Last week, it was the Zino Society’s investment forum in Seattle. Today it’s the DEMOfall09 conference in San Diego, where four Northwest companies are presenting. And tonight there is nPost’s networking and demo event for tech startups at the Columbia City Theater in South Seattle.

But there is also a notable newcomer to the scene. Alibaba, the Hangzhou, China-based Internet commerce firm, and Inc. magazine announced today the semifinalists in their U.S. entrepreneur competition, called “Newpreneur of the Year.” Thirty entrepreneurs will compete in six cities across the country, including Seattle, for 12 spots in the next round of competition, where the public will vote for the businesses they think have the most potential to revive the economy. (The other cities are New York, Chicago, Miami, Dallas, and Los Angeles.) The final round will take place on Nov. 18 in San Francisco, where one winner will take home $50,000, and four others will split another $50,000.

The Seattle semifinalist event is on Oct. 20 at the Edgewater Hotel. Five local entrepreneurs will pitch their companies and ideas, ranging widely from alternative energy, medical devices, and retail, to the decidedly low-tech world of kitchen and fashion accessories. The winners will move on to the final 12 in the nation. Here’s a snippet on each of the Seattle contenders:

—Jessica Aceti will be pitching Cap-sac, a modern line of convertible accessories, including a fanny pack for your head. The product folds into itself and can also be used as a purse. (This I have to see, though it’s safe to say I’m not the target audience.)

—Steven Bohannon from Bainbridge Island, WA, will pitch Feed Your Mind, a vending machine company focused on providing healthy, nutritious, and entertaining alternatives to traditional vending offerings. Its product mix includes crossword puzzles, games, new and used books, playing cards, maps, and nutritious snacks. Machines will be placed strategically where consumers get stuck waiting—at hospitals, airports, bus and ferry terminals, and so forth.

—Burt Hamner of Seattle will pitch Hydrovolts, the renewable energy company we’ve profiled before in Xconomy. Its key technology is a hydrokinetic turbine that can be placed in a water current (like a canal or stream) to provide electricity for up to a dozen homes. Hamner is no stranger to pitch competitions; Hydrovolts won the “audience favorite” prize at the Northwest Entrepreneur Network’s First Look Forum last March, and took home the $50,000 prize in the Zino Society Green Investment forum in May.

—Cindy Sawyer of Bothell, WA, is pitching ToweLocs, a locking device that keeps kitchen and hand towels secured, and prevents them from falling to the floor. It may sound mundane, but it’s the kind of simple, stylish home accessory that might just take off if it solves a real problem for people.

—Joel Smith of Edmonds, WA, will pitch Forward Mobility, a line of medical mobility products to help disabled customers maintain their independence. The company is looking for funding to finish the production tooling of its new walking leg brace, the Freedom Leg, which allows a person to walk on an injured leg with zero weight put on the knee and below.

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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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Sometimes the only way to flush out the truth on something is to state an opinion and spark a discussion. Using on-demand workers has been around for over 10 years, but there are precious few resources available for someone to get educated. Hopefully my report will stimulate discussion and bring a greater level of awareness to the paid crowdsourcing market.

Let’s look at crowdsourcing’s evolution this decade:

* Wikipedia started the revolution

* Jeff Howe coined the term crowdsourcing

* Elance and Guru made it into sophisticated electronic marketplaces

* Amazon’s Mechanical Turk turned it into a computing platform

* Kermit Pattison writes prolifically about it

* John Winsor’s company does creative things with it

* 50+ companies provide products and services designed to bring it to the everyday business person

So after 10 years and more than two million workers getting paid half a billion dollars for work online, where is the Gartner Magic Quadrant, or the Forrester Wave Diagram, or the TechCrunch Top 50 list?

The novelty of free crowdsourcing (getting something useful done by the masses for nothing) has been the romantic aspect most often studied and written about. “Free” differs from paid crowdsourcing in that free work gets accomplished only if it’s entertaining, emotionally fulfilling, or leads to recognition. The less sexy and decidedly more complex “paid” cousin, which uses money as leverage to generate results, has been more of a mystery. Ask 10 business managers whether they’ve used on-demand workers through an online service, and nine will cock their head like a lab that just heard a dog whistle.

Paid crowdsourcing can find a useful metaphor in e-commerce’s 15-year rise from cutting edge to preferred shopping mechanism. Want a book today? We don’t send our intern to the store to buy it. We go to Amazon, search on the book title, add it to our cart, insert our credit card information, and submit. One or two days later, we receive our book. Why is online commerce so mainstream …Next Page »

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It’s not getting any easier to write and perform great music. But for up-and-coming artists, it is getting easier to build a fan base—especially if they can get their fans to do part of the work for them.

That’s the idea behind MyStore, a new Facebook application launched last week by Framingham, MA-based Nimbit. The five-year-old startup builds online tools that help artists sell and market their music directly to fans, with no need for a middleman like a recording label or a promoter. Up to now, that’s mainly taken the form of a Web-based platform that bands can plug into their websites or blogs, allowing them to do things like track fans, promote concerts, and sell digital downloads, tickets, CDs, and other merchandise. But with MyStore, Nimbit has transplanted its marketing and e-commerce engine into the world’s largest social networking site—which means every transaction a band or artist conducts can potentially be magnified many times over by the power of its fans’ social connections.

Once an artist or a band joins Nimbit and sets up a MyStore tab in their Facebook profile, Facebook’s own networking tools swing into action on their behalf. Every time a fan plays a song from the MyStore, or buys a download, or leaves a comment, that action shows up on their wall for all of their friends to see. If a Facebook member recommends a band to a friend, the recommendation will lead them back to the band’s MyStore. And nobody ever has to leave Facebook to make a purchase—the store provides a shopping cart, credit-card processing, the whole e-commerce shebang.

It’s a big step for Nimbit, whose main previous venture into the social networking world was an “online merchandise table” widget for MySpace. The 14-employee company, which has angel funding from Lexington, MA-based CommonAngels, was already growing fast, with 10,000 artists and labels signed up as users and 50 percent year-over-year revenue growth, according to co-founder and CEO Patrick Faucher, himself a professional trumpet player and vocalist. With Facebook’s population zooming past 300 million users (and MySpace’s plummeting at a similar rate) the MyStore integration could become an important new selling point for Nimbit. I talked last week with Faucher, and had a chance to ask him how the MyStore app can help artists, how social networking fits into the company’s vision, and what it was like to work with Facebook. An edited version of our conversation follows.

Xconomy: Obviously most serious bands have a MySpace presence. Is there a lot of music discovery going on through the other social networking sites?

Patrick Faucher: It depends on the genre and the demographic. Some might do well on MySpace, some might do well on traditional radio, and some are still basically out there doing regional touring, and that’s where they are generating exposure. But at some point in every artist’s process for marketing and promotion, there is an opportunity for a fan to interact with them online, whether that happens to be on MySpace or on their own official website or on Facebook. That is the point at which we maximize that interaction, by making sure the artists can capture their fans, engage them with product offers, and give them a rewarding way to buy directly from them.

X: If you’re an artist or a band, why go to the trouble of building a store inside Facebook—what’s wrong with iTunes?

PF: If the fan has taken the time to find you and you have them right there in front of you, why send them down the street to buy from someone else? We act as a transparent layer between the artist and the fan. Our job is to …Next Page »

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Angel capital just might be alive and well—at least in Oregon. Following up on Rick Turoczy’s guest post about Portland, OR, startups on Friday, we’ve learned that the Oregon Angel Fund has closed a new $3 million fund this summer, made up of 60 individual investors who each contributed $25,000, plus $1.5 million from the Oregon Growth Account, a state-run fund dedicated to Oregon startups and supported by proceeds from the state lottery.

The Oregon Angel Fund was co-founded in 2007 by investor Eric Rosenfeld of Capybara Ventures. Rosenfeld says the angel group’s new fund, which closed in July, is its third and largest fund. The group’s previous investments include Elemental Technologies, RNA Networks, and other prominent Portland-area startups.

What’s more, Rosenfeld tells me the group has already made three startup investments out of its newest fund. Here’s an update, and a little bit about each company:

—Vancouver, WA-based ClearAccess makes software that enables Internet service providers to remotely manage their customers’ residential and office broadband networks. In June, the Oregon Angel Fund invested $500,000 in ClearAccess, part of the company’s Series B financing of a little over $6 million that was announced last month. ClearAccess has about 30 employees and is led by CEO and co-founder Ken Hood.

—Portland-based Giftango makes online gift card systems for hotels, restaurants, spas, retail stores, and other merchants. The Oregon Angel Fund has committed to invest $500,000 in Giftango this month and lead the company’s series A financing. CEO and founder David Nelsen, a former project manager at Intel, leads Giftango. Bob Greenberg, an investor and Pixelworks co-founder, will join the company’s board.

—Portland-based Wicked Quick is a fast-growing clothing and apparel brand, founded by former executives and designers from Nike, No Fear, and Bain & Company. The Oregon Angel Fund invested $405,000 in Wicked Quick last month, and led the company’s Series A financing, which is fully subscribed at $1.1 million. Wicked Quick is led by founder and CEO Tarran Pitschka and chief operating officer Eric Happel. Rob Stewart, an investor and former Xerox consumer products executive, has joined the company’s board.

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Chuck Goldman, CEO of Boston-based mobile app development house Apperian, called me this week to let me know about the launch of Timberland Expedition. The new iPhone application, which went live in Apple’s iTunes App Store today, was designed by Apperian to appeal to the outdoor-enthusiast types whom Stratham, NH-based Timberland (NYSE: TBL) considers the core market for its footwear and athletic clothing.

I’ve been playing around with the free app a bit today, and I’m impressed by its combination of slick design, useful features and content, and entertainment. The app is important for Timberland because it’s the company’s first venture into the burgeoning world of mobile marketing. And it’s important for Apperian because it’s exactly the kind of application that the startup, which I profiled when it came out of stealth mode back in March, says it’s best at building: those that help big companies extend their brands into the mobile universe.

“It’s shaping how users interact with a big brand that’s fun and exciting for us,” says Goldman. He calls the Timberland app, which Apperian built in conjunction with Mullen, Timberland’s Boston-based advertising agency, “an ‘edutainment’-type app that combines the core location features of the iPhone with user-generated content and a blend of catalogs and other content to extend Timberland’s marketing efforts onto a brand-new platform.”

Which is a mouthful. What the app really does, more than anything else, is leave the user with a warm-and-fuzzy feeling toward Timberland. That is, assuming he or she has a penchant for outdoor exploration, electronic gadgets, and shopping, which is not-unusual combination in New England. While Zumobi, a Seattle-based mobile application developer, has worked with REI to produce a snow-report application for iPhones, BlackBerrys, and Windows Mobile devices, the Timberland app represents the first time an outdoor gear retailer has come out with a multipurpose mobile application, Goldman says.

When you open the Timberland app, you see an antique-looking compass that gives you four options:

1. Expeditions—a selection of suggested hikes, bike rides, scenic views, and local attractions around, initially, six cities: Boston, Chicago, Denver, Los Angeles, Minneapolis, and New York. (Here at Xconomy, we’re lobbying for the addition of Seattle, Portland, Vancouver, and San Diego.) Each expedition comes with a brief description, a photo, a link to a Google map, and directions to the spot from the user’s current location. Whenever you click on “expedition” on a map, you also see the locations of nearby Timberland stores, which Goldman says was part of Apperian’s strategy to use the app to drive traffic to bricks-and-mortar outlets. Interestingly, Timberland plans to expand the Expeditions section over time using destinations, photos, and writeups submitted by users. (That’s the “user-generated content” Goldman mentions.)

2. Gear—what Goldman calls a “micro-catalog” showcasing Timberland merchandise, with an emphasis on two brand-new footwear lines called Earthkeepers and Timberland Mountain Athletics, both made with recycled rubber. You can’t actually buy shoes from the micro-catalog—Goldman says that function is coming later—but you can click on Timberland’s phone number to order from a telephone rep.

3. Timber Trail—a game that challenges the user to cross an outdoor expanse without running out of energy, food, or water, and without being attacked by bears, snakes, or bees. At the beginning of the game, players gets to choose which Timberland accessories to …Next Page »

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Seattle-area e-commerce startup Valu Valu has made a strategic shift in the past few months. Instead of continuing to pitch its service primarily to bargain-hunting consumers and resellers, Valu Valu relaunched two weeks ago as an online price monitoring site geared toward businesses. The idea is to give Internet retailers and small businesses an efficient way to monitor the prices of consumer goods—everything from displays and GPS devices to bicycles and snowboards—and to analyze trends and predict the prices of such products up to 30 days in advance. It’s all aimed at helping businesses position themselves in the marketplace and boost their revenues.

Last February, we reported that Valu Valu was releasing its software in a beta trial to focus on consumers buying and selling used video games online. This month’s shift to a business-to-business model looks like an effort to gain traction and new paying customers in a broader (and more promising) market. “Classifieds and consumer businesses often face a chicken-and-egg problem,” says Valu Valu co-founder Emmanuel Marot, whose previous company, the mobile search startup MotionBridge, was bought by Microsoft in 2006. “Here we bring value to businesses from Day One.”

Marot says his company’s approach is a bit like what Salesforce.com did for customer relationship management, but focused on revenue management. The concept of tracking prices also has similarities to Seattle-based Farecast (now Bing Travel), but for consumer goods instead of airfares. As Marot explains, big companies like Amazon or Wal-Mart have dedicated teams that track competitors’ prices, but small and medium-size businesses don’t. At the same time, Valu Valu tries to provide better data, history, and trends than price comparison sites like Shopping.com.

Valu Valu currently has some 20,000 consumer products and counting in its price-tracking inventory. The technology behind the startup is called “scientific pricing.” It uses artificial intelligence techniques and statistical methods to analyze trends and make predictions about market prices and fluctuations. The company’s basic service, which includes price monitoring for up to 10 products (you supply the UPC codes), is free; more sophisticated analysis and forecasting of prices for up to 100, 1,000, or 10,000 products is available for a pay-as-you-go monthly fee (from $19.99 to $399).

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