Seattle-based Big Fish Games announced today it has hired Michael Vernon as chief financial officer and Ian Hurlock-Jones as chief technology officer. Vernon is a veteran of Seattle-area firms aQuantive and Zumobi, while Hurlock-Jones comes from Fox Interactive Media and Buy.com. Big Fish, a leading developer and distributor of casual games, announced it was opening its European headquarters in Cork, Ireland, in April. The company also has a small office in Vancouver, BC, which former CFO Glenn Walcott told me about last year. Big Fish raised $83.3 million back in September 2008.

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This morning I checked my e-mail, powered by Google, and then used Google Maps to find my way to the Google Kirkland open house. It reminded me a little bit of the scene in “Being John Malkovich” when Malkovich, the actor, finds a portal into his own brain and sees that everyone looks like him and says nothing but, “Malkovich, Malkovich.” OK, I guess the analogy would fit better if I also worked for Google and uttered “Google, Google” all day—but that might even happen sometime, if Google’s pace of hiring keeps up. (Just kidding.)

Engineering and site director Scott Silver, who’s been on the job since June (succeeding Peter Wilson, who left the company), introduced the new Kirkland facility, which has been officially open since August 31 and employs more than 350 people in a unified campus setting. He gave a little history of Google’s Kirkland operation—the first office was at Carillon Point in 2004, Google’s first major presence in the Northwest—and how it has grown and contributed to the company’s products. Google Talk, which does Internet telephony and instant messaging, was born and raised in Kirkland, for instance.

Other areas of focus for the Kirkland office include:

—Search: Webmaster tools, and instant indexing for real-time news.

—Advertising: AdPlanner (see below), AdWords Opportunities (helping advertisers optimize search ads), Google Analytics, and Campaign Insights (a new service released last week that’s around making brand ads more effective).

—Applications: Google Talk, Google Talk Video (within Gmail), Google Maps (including a new application for directions on mobile phones), the Chrome Web browser, YouTube video clips, and Google Sync (for synchronizing your mobile phone).

—Infrastructure: system and corporate billing software for supporting applications at huge scales.

Silver, a former Amazon and Netscape veteran, said he’s “quite proud of what we’ve done here, and immensely happy to come to this day,” and to be able to say Google is here to “create great products and find great engineers.”

I followed up with Silver afterwards, and he confirmed Google Kirkland is actively hiring software engineers, but he didn’t say how many positions are open at the moment. He said his team is doing hundreds of interviews per month, “and we’d love to do more.” I asked him about the 800-pound gorilla down the road, Microsoft, and whether Google is recruiting much talent from …Next Page »

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Last night, Google hosted a series of technology talks at its Fremont office in Seattle. The goal was to give the tech community a look at the core technologies and problems Google is working on in the Northwest—the first time Google Seattle has spoken publicly in detail about a number of projects it’s pursuing. Between its Seattle and Kirkland, WA, offices, Google has more than 500 employees here, making it one of the three largest outposts for the Internet giant outside of its Mountain View, CA, headquarters (the other two are in New York and Zurich, Switzerland).

Brian Bershad, Google’s Seattle site director, said the company has gone through a period of six or seven months of slowed growth (along with everyone else). But it has emerged from that and is hiring again. “We’re back in the mode where we’re looking for extremely strong talent,” Bershad said.

Three tech talks followed. I heard nothing earth-shattering, but Google provided an in-depth and unusually transparent look at how its local engineers are pushing the state of the art in the company’s key products. Some of this was clearly aimed at building relationships with the local technology talent pool. Here’s a brief recap:

—Stephen Adams, a staff software engineer, discussed his project on Web browser security. Like any browser, Google Chrome, which has 30 million users, needs periodic updates (software patches) to stay secure from viruses and other bugs. The problem is these patches are huge and take a lot of time and bandwidth to download. Adams figured out a clever way to reduce the size of a patch from 1 megabyte down to about 79 kilobytes (better than a factor of 10). Adams said he’s been going to Mountain View headquarters to work with the Chrome team on building the product, code-named “Courgette.”

—Peeyush Ranjan, engineering director for search, gave an overview of how his team is improving Google’s core search engine technology. One area they’ve been pushing is the freshness of search results—how to find and rapidly rank the importance of new Web pages as they come online. Another area is improving Google’s Hot Trends feature, which tells you the top rising queries in the search stream (terms like Hurricane Katrina or Apple iPhone). He also mentioned some future work in real-time search and push-based Web, but didn’t elaborate. Ranjan did say Google has a special team in Kirkland dedicated to pushing the state of the art in Web search.

—Chee Chew, engineering director for client and applications tools, talked about advances in desktop software and Web apps. He touched on Gmail tools—viewing attachments without having to download PowerPoint or PDF reader, and uploading groups of photos with one drag and click. Chew also showed a demo for a project on how to make it so adding video to the Web is as simple as adding an image.

Afterward, there were questions from the audience on how Google can make money on some of these products, and why it chose to go open-source for Chrome. “Let’s agree that Google is an Internet focused company” Chew said. “Our Internet apps are richer, faster, more robust. That helps our business model.” Bershad added that there are millions of paying Google Apps customers. Kirkland site director Scott Silver added that not every Google product has to make money.

As for the open source question, Bershad said, “Much of what we do, we want to see other companies pick up.” The best way to drive engineers to build valuable applications on top of existing platforms like Google’s, he said, is to “show them what you’re doing.”

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[Updated Aug 27, 11pm PT, with clarification about the list marketing and lead-gen process (see below)]

A stealthy Seattle startup in online marketing is starting to generate some buzz around town. Marketfish, which recently moved into new offices in Pioneer Square, has raised an undisclosed sum from private investors, led by Seattle-based Alliance of Angels and including Bellevue, WA-based Atlas Accelerator. Now it is aggressively putting the money to work, scoring a lot of new customers and hiring staff as it gears up for a beta launch of its Web service early next month.

Marketfish is led by founder and CEO Dave Scott, who was previously chief marketing officer at Seattle-based Entellium, the company that imploded last year in an accounting scandal (which was blamed on executives who were above Scott’s pay grade). Before that, Scott was head of marketing at Intermec and PeopleSoft. In his first media interview about Marketfish, he declined to say how much funding the startup has received, but said, “We think we’ve raised enough to get to break-even.”

Scott founded the company in July of last year. He initially tried to raise money in October, but was unsuccessful. “I liquidated my 401(k), sold my car, and buckled down for six to nine months,” he says.

Here’s the problem Marketfish is solving. Say you’re a big company like Dell, and you want to market yourself to small business owners. Today, as the head of marketing, you’d go out and rent a list of potential customers from Forbes, Fortune, or Inc., say, and get a list broker to represent you. They call all the list managers, at firms like Worldata or InfoUSA, and negotiate a deal. It’s all part of list marketing—using a third-party permission-based list to launch lead-generation campaigns. “The process today is extremely painful,” Scott says. “It’s really hard to measure, and it’s all manual.” He adds that the whole process can take something like 24 days, and is done over the phone. [See Scott's clarification of the process in comments section below---Eds.]

Marketfish is trying to automate all that by creating a Web platform, similar to Google AdWords, that could potentially cut the time down from 24 days to 30 minutes—and make it much easier to measure the performance of an ad campaign. It does this by providing a patent-pending Web interface where marketing agencies can work directly with list owners. “We’re trying to create a marketplace,” Scott says. “We want to create trust between the two.”

Using the Marketfish site, a marketer can directly find the lists he or she wants online, add them to a shopping cart, and be done with it. Marketfish takes a percentage cut of the revenue from each transaction (which Scott didn’t disclose). Scott says the company already has 30 customers—with 20 more on the waiting list—including 19 of the top 20 marketing agencies in the Seattle area.

Previous companies like NextMark and min (Marketing Information Network) tried various approaches in the pre-Google days, Scott says, but they largely failed to solve the list marketing problem. “They wanted to play nice with all the middlemen. We’re going to cut them out,” he says. “It’s a bold strategy.”

The company has some heavy hitters on its board of advisors, including Clark Kokich, chairman of Seattle-based Razorfish (recently sold to Publicis), startup advisor Janis Machala of UW TechTransfer, and Mike Crill of Atlas Accelerator. Scott says Marketfish is looking to form a partnership with a big company like Google, Microsoft, or Yahoo—none of which has developed a platform to solve this particular online marketing problem (at least not yet).

Scott says Marketfish currently has seven employees, and is looking to hire five more in the next six months or so—everyone from Java software developers to experts in direct marketing and lead-generation marketing. Even while planning to ramp up spending, he notes, “We’re on our path to break-even.”

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Behind the stubborn economic clouds, there may be a few hints of blue sky. A few companies, in other words, are hiring rather than firing—and a new report from StartUpHire, a Vienna, VA-based job board that specializes in advertising open positions at venture-backed startups, has the lowdown on which ones (see the lists below).

As measured by the number of open positions tracked by StartUpHire, Xconomy’s home regions are among the top six fastest-growing job markets in the country. (The San Francisco Bay Area is at the top of that list, followed by Boston, New York, Southern California, the Washington DC-Baltimore region, and Seattle.) There are more than 700 positions open at venture-backed startups in the Boston area, according to the company. The number of openings tops 500 in Southern California, and in Seattle there are 258 positions open.

“This information from StartUpHire is a strong indicator that even in the current economic climate startups continue to provide tremendous growth opportunities and are a collective force in regional and national job markets,” Mark Heesen, president of the National Venture Capital Association, said in a StartUpHire announcement. Nancy Saucier, executive director of the New England Venture Capital Association, added that she expects venture-backed companies “will help lead the way to a robust job growth recovery.”

The fastest growing companies, as measured by job openings in the second quarter of 2009:

Boston
Acceleron Pharma
Acquia
CambridgeSoft
E Ink
Gomez
ITA Software
Kronos
Senior Whole Health
Turbine
Zipcar

[lists continue on next page]

…Next Page »

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Veteran software entrepreneur and investment banker Michael Orbach is joining Seattle-based Cascadia Capital today. As a new managing director in the investment bank, Orbach will focus on mergers and acquisitions, as well as capital raises, in software and services—all in the mid-market range of $20 million to $500 million deals. The new hiring looks to be a strategic move to strengthen Cascadia’s national and global presence in information technology.

Orbach comes most recently from Palo Alto, CA-based Pagemill Partners. But he is a Seattle-area resident and says he has been commuting to Silicon Valley for 12 years. In the early 1980s, he co-founded Simulation Sciences in the U.K. (he’s a native of Manchester), and took the company public in the early 1990s. After Simulation Sciences was bought by Invensys, Orbach joined Aspen Technology and handled mergers and acquisitions, moving to the Seattle area with that company’s purchase of Industrial Systems, Inc. in Bothell, WA, in 1995.

“We liked the place,” Orbach says. “My family was suffering major culture shock between Manchester and California.” Orbach also got his MBA at the University of Washington.

The professional rationale for Orbach’s latest move is equal parts opportunity and timing. “There’s a very large opportunity to build a software and services practice here at Cascadia,” Orbach says. Cascadia Capital has a strong national brand in capital raising, and it can use that strength to grow its mergers and acquisitions business. That sort of leverage between M&A and capital raising expertise, he says, “is very appropriate in the market today.”

And why is that? “You tend to build out new business models and get the best growth strategy when you’re coming out of a recession,” Orbach says. And because of the dearth of IPOs, startups looking for an exit have little choice but to get acquired, he says. That, of course, gives buyers the upper hand in negotiations. “The economics of buying companies has never been better. For the Oracles, SAPs, and Microsofts, less and less will they make internally, and more and more will they buy,” he says. What’s more, how they’re buying has changed radically in recent years. “M&A has become a national/global practice,” Orbach says. “The days of looking at specific geographies or specific verticals are gone, because the technologies cross those.”

What all this means is that the precise skills of bankers making deals in the technology space are more important than ever. “The days of watching lawyers doctor the deal are long gone,” Orbach says. Bankers have to position a company’s financials to a prospective buyer in the right way, which means having a deep understanding of where the technology and the business model fits into the market, and of what the buyers want. Orbach says he draws on his experience as an entrepreneur, as well as having lived in many parts of the world with diverse cultures (the U.S. and U.K., France, Germany, Switzerland, and South Africa).

We didn’t get a chance in this conversation to dive deep into software M&A trends yet, but Orbach did offer a hint at what he’s looking at. “Venture capitalists are focused on triage. Many businesses need something done. Not only here, but everywhere,” he says. “As we come out of this recession, the dealmaking will be done in countercyclical markets.” He points to a few specific areas to watch: IT infrastructure, virtualization, legal, and corporate governance, risk, and compliance. We’ll be watching to see what effect this all has on Cascadia’s dealmaking, and the broader IT world.

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Seattle-based Opscode announced it has raised $2.5 million in Series A funding led by Draper Fisher Jurvetson. Opscode isn’t talking about its new product just yet, but it looks to be helping businesses automate their cloud-computing infrastructure. The company, founded in 2008, will use the funds to hire engineers and other key staff as it gears up to launch its core cloud service later this year.

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Seattle-based Big Fish Games announced today it is setting up European headquarters in Cork, Ireland, and expects to create as many as 100 positions there over the next three years. The new office will focus on multilingual customer support, game testing, and product localization. Big Fish is a leading developer and distributor of casual games.

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Hangout Industries, the Boston-based creator of the Web-based social virtual world Hangout.net, announced today that it has named Mike Goslin, former vice president of virtual world design and development for Disney Online, as its new vice president of product development. Goslin will be in charge of design, development and operations. “Mike is one of the most respected, effective and proven forces in the virtual worlds and games space,” Hangout CEO Pano Anthos said in a statement. “His combined talents as a natural story-teller, visionary and technologist make him the perfect candidate to bring Hangout to the forefront in the evolution of casual online entertainment.”

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In early January, students from MIT’s Sloan School of Management fanned out to companies in Boston, San Francisco, Silicon Valley, and Seattle on the school’s annual Tech Trek. The student-organized job-prospecting event puts budding business moguls soon to receive their MBAs into the same conference rooms with technology entrepreneurs for a download on each company’s business focus and its hiring outlook. On January 12, Greg talked with one of the trek organizers visiting Seattle-area companies, who reported that Amazon and Microsoft are hiring, but Google and Yahoo aren’t. And this week, two Sloan students who toured startups here in Boston are making guest appearances in our Xconomist Forum.

John Marcus III, who’s in his second year at Sloan, supplies a nice explanation of the intent behind the Trek—to meet face-to-face with local executives. But he says these meetings are only the beginning of the connection-building process that all job hunters must tackle today, even those with MIT credentials.

“I think the most critical traits for getting a job in this economy are being creative and being assertive,” Marcus writes. If you want to work for a specific startup, he suggests finding out what kind of help it needs and offering it. “Is your dream startup running out of cash? Come in the door with a list of alumni VCs or maybe a few sales leads for their flagship product. Your imagination is the only bound to what value you can bring.”

Meanwhile, Mahesh Konduru, a first-year Sloan student, dives into the details of the local startups he visited, focusing on each company’s mission and business outlook. You’ll recognize the names of most of these companies, which were part of the Trek’s energy track, from our coverage here in Xconomy: A123 Systems, GreatPoint Energy, Ze-gen, and others.

“Leaving the classrooms to witness innovative technologies in person was a rejuvenating experience,” writes Konduru—who is clearly eager to contribute to that innovation after he finishes school.

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As expected, the economic downturn is hitting venture capital hard. The top challenge for Washington state VCs for the first quarter of 2009 will be the availability of capital—ahead of the national economy and overall market growth.

That’s according to the Washington Technology Industry Association’s Q1 2009 venture capital outlook survey. The quarterly survey tracks local VC firms’ indicators of deal quality, quantity, expected exits, and business metrics for their portfolio companies.

The outlook for deal flow and valuations is fairly bleak. No venture capitalists surveyed predicted growth in valuations would be similar with the last quarter in any stage of new investments. However, 44 percent of VCs did predict moderately better deal quality this quarter.

As for their portfolio companies, two-thirds of respondents predicted their companies’ revenue growth would be moderately or substantially worse than in the fourth quarter of 2008. And unlike last quarter, when most VCs predicted no major changes in hiring, 54 percent now predict a decrease of at least 10 percent. Lastly, no IPOs are expected this quarter, but one-third of the VCs surveyed predicted at least one of their portfolio companies would be acquired.

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This morning, I had a good chat with Seattle entrepreneur and investor Martin Tobias, in advance of tomorrow’s holiday open house at his new startup, Kashless. Known to get around on his Segway, Tobias said he trudged down the hill on foot today to his new office, which is in Lower Queen Anne. All of his meetings were canceled because of the snowstorm, he says.

Tobias is the former CEO of Imperium Renewables, the troubled Seattle biodiesel refiner, and a venture capitalist with Bellevue, WA-based Ignition Partners. I wanted to hear more about Kashless, whose green-tech software has been in private alpha trials since Tobias raised $5 million from RRE Ventures in October. (Tobias is an investor in two RRE funds, so in part, he funded himself.) “Stuart Ellman [RRE's co-founder and managing partner] has taken a pretty thoughtful look at how a tech fund can play in the green space. He’s focused on doing software deals that relate to green,” Tobias says. He adds that other tech investors have tried to get into cleantech in areas that don’t relate to software—like solar and biofuels—and they got burned.

The concept of Kashless, as I understand it, is to provide an online service whereby people can efficiently acquire and give away stuff for free—equipment, furniture, whiteboards, and the like. It’s a combination of social network, community message board, and Web service, all with a green environmental theme. Kashless calls it “recommerce.”

Kashless currently has five employees and is looking to hire four more senior software engineers, Tobias says. They have moved into a 1,200-square-foot office, which will be on display tomorrow evening. (Tobias says he expects around 100 guests, so it might get crowded.) Not surprisingly, Tobias used Kashless to furnish the new office. “Every piece of furniture was free,” he says, from tables and chairs to whiteboards, and even some computer monitors. “Kashless could be an interesting tool for startups to reduce their expenses.”

Tobias says he even got some of the beer for the holiday party for free. He was looking for a beer fridge, and instead found several people trying to give away unopened cans and bottles. “We’ve been amazed what you can find for free in the community,” he says.

As for his product, Tobias says there are now 13,000 items in the Kashless system. The software searches community sites like Craigslist and Freecycle.org for all free stuff, and posts it. So far, Kashless users can’t post their own items yet, but that will come in January. Tobias says the service will move into beta trials in March or April—when the site will be “feature-complete but you’re working on scalability and usability” for a large number of users.

“Our idea here is to get more of this stuff actually moving around the community,” Tobias says. The longer you can use something, the better.” Recycling is great in principle, he says, but e-waste recyclers are not always reputable. “We prefer to extend the lifespan of an item as an alternative.”

So what will Kashless provide that isn’t already covered by community e-mail lists and websites? “We’re trying to hook into lots of different marketplaces and lots of different lists, to get the largest potential distribution for free stuff,” Tobias says. “You can see stuff from all over region. We certainly want to partner with STS [the Seattle Tech Startups list] and the whole startup community…We want to make it extremely valuable for people in Seattle first, before we pour gas on the fire.” But the eventual plan is to go national, and then global.

Tobias points to some expansion lessons from Craigslist, including the site’s ease of use, simplicity, and being lightweight. The key is to build a high-traffic website without a big staff, he says. “A lot of startups make the mistake of hiring a lot of people. I’ve done that myself…We’re focusing right now on building a valuable service. We’ll figure out how to make money later.”

In the meantime, he says, “We’re funded, we’re expanding, and we’re hiring.”

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Maybe everybody’s rushing to scratch things off the to-do list before the holidays, but this was one of the busiest weeks of the year we’ve seen in Seattle biotech news. Here are the highlights.

—Seattle Genetics had a big week. The Bothell, WA-based biotech company (NASDAQ: SGEN) said follow-up data in a clinical trial of its “empowered antibody” for Hodgkin’s disease and related lymphomas showed it’s getting better at causing complete remissions, and the effect appears to be long-lasting. Another drug passed an interim safety analysis.

—Alan Frazier, who oversees $1.8 billion for Frazier Healthcare Ventures, sat down with me for an exclusive interview. He had some interesting advice for how companies can adapt to one of the worst busts in the industry’s 30-year history.

—An effective malaria vaccine has eluded scientists for a century, so I stopped by to interview Stefan Kappe of Seattle Biomedical Research Institute to find out why he’s so excited about a new approach. I made sure to track down Kappe in advance of our Xconomy Forum tonight, which focuses on next-generation vaccines in development.

—Alder Biopharmaceuticals, a Bothell, WA-based developer of antibody drugs, received some good fortune in time for the holidays. Its leading competitor, Switzerland-based Roche, was hit with a delay from the FDA that is expected to slow down its plans to commercialize a rheumatoid arthritis drug by at least a year. This could give little Alder a chance to catch up.

—We broke the unfortunate news here last Friday that Calypso Medical Technologies laid off 36 workers, or about one-fifth of its staff, to conserve cash in the downturn. To see an updated list of layoffs at Seattle life sciences companies, click here.

—Some life sciences companies and organizations are still hiring in Seattle, so I set out to track down this information, despite the drumbeat of layoff news. If anybody out there knows of big names I’m missing, please send me a note at editors@xconomy.com.

—ZymoGenetics (NASDAQ: ZGEN) said its sole marketed product, recombinant thrombin for surgical bleeding, didn’t cause any immune reactions when given to patients who were at risk of getting that complication. The company will use this data to try to persuade doctors it has a safer alternative than the standard drug made from cow blood, by Bristol, TN-based King Pharmaceuticals.

—The Fred Hutchinson Cancer Research Center raised $2.2 million in donations for its scientific programs Saturday night, at its annual Hutch Holiday Gala. The center plans to funnel …Next Page »

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(UPDATE: This story has added information at the end about openings at the Institute for Systems Biology.)

Mass firings dominate the news almost every day now, yet some companies are still hiring. Since a lot of highly-skilled and experienced people have been thrown out of work lately, I thought I’d check around to see where some of these talented folks might end up, and which organizations in Seattle’s life sciences industry are poised to benefit.

Here’s a rundown of the companies that have continued to grow in the recession for one reason or another. This isn’t a comprehensive list, so if you know of a life sciences organization I’m overlooking, please send me a note at editors@xconomy.com and I’ll make sure to update the story. We also want to hear from people hiring in other industries, like Seattle-based Big Fish Games, so give us a shout.

Bill & Melinda Gates Foundation

The world’s largest philanthropy is still plenty rich, even in a recession, and still planning to hire quite a few people to make sure it invests its fortune wisely in global health, global development, and education. The Seattle-based foundation had 686 employees as of Oct. 1, and hired about 200 people in the past year. The foundation expects to expand its headcount by another 10 percent in the coming year, adding about 70 new jobs. The openings are for people with a range of skills from basic science through administration.

Much of this growth is being fueled by investor Warren Buffett. The Omaha billionaire and friend of Bill Gates is giving the foundation much of his fortune, which was worth $31 billion at the time of the pledge in 2006. The annual installments of stock donations that were actually given were worth $1.6 billion in 2006, $1.76 billion the following year, and $1.8 billion this past July, according to the foundation’s website.

Seattle Genetics

The Bothell, WA-based developer of cancer drugs has been on a roll this year, ever since its SGN-35 drug candidate showed impressive tumor shrinkage rates in a small study of people with Hodgkin’s disease. Seattle Genetics (NASDAQ: SGEN) has hired about 65 people so far in 2008, mostly in its clinical and manufacturing/development groups, says spokeswoman Peggy Pinkston, in an email. She notes that SGN-35 is being primed for pivotal trials, the kind that can lead to FDA approval if successful, starting in the first half of 2009. It currently has 11 open positions on its website.

Novo Nordisk

The Danish drugmaker, the world’s largest maker of insulin for diabetes, announced it is opening up an immunology research center in Seattle with plans to hire 80 people by 2010. Based on job postings the company listed in August, it said it was looking for director-level people and scientific staff in cellular immunology and molecular immunology assay technology. The Seattle research center plans to identify and test protein drug candidates for autoimmune and inflammatory diseases like multiple sclerosis, rheumatoid arthritis, lupus, and inflammatory bowel disease. I’m planning to interview site leader Don Foster soon to learn more about exactly what Novo has in mind.

Cepheid

This Sunnyvale, CA-based maker of molecular diagnostic tools has built up a 30-person chemistry R&D unit in Bothell, WA over the past four years, and it is looking to grow, CEO John Bishop told me last week in an interview.

Cepheid only lists one job opening in Washington state on its website, but Bishop said the company plans to snap up an undisclosed number of highly-skilled people in Washington state to build up manufacturing capacity near its chemistry team. Manufacturing of specialized probes and primers will have to be kept close to this unit in Bothell, because, Bishop says, “It’s high-value work for us, and we want to keep it with technically competent individuals.” The company has seen its revenues grow …Next Page »

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“We’re not just a gaming company,” says Glenn Walcott. The chief financial officer of Seattle-based Big Fish Games is telling me about his company’s focus on new hires, and this comes as a bit of surprise. People tend to think of Big Fish as a game producer, but Walcott stresses that most of its engineers don’t work directly on games. They work on other aspects of the business, like e-commerce, distribution platforms, and real-time memory systems for personalized user experiences. “It’s a lot of fun for new guys,” he says.

But the main message is the company is hiring—period. It’s a welcome change from the doom and gloom we’ve been reporting lately. On a sunny Friday afternoon, I checked out the Big Fish offices on Elliott Avenue West, where the company moved last July. The open floorplan means most employees have a striking view of Elliott Bay. And the beautiful aquarium in the lobby is getting new fish this week (no word on their size, but I have a hunch).

There has been a lot of talk about whether the gaming industry—particularly “casual games,” which are relatively cheap and don’t require much time commitment—might be recession-proof. Walcott eschews the label, but he notes that Big Fish’s October sales were up 23 percent over September, and November sales were 10 percent above that. The company’s latest big release, Mystery Case Files: Return to Ravenhearst, has sold 100,000 in its first week, and Thanksgiving weekend was Big Fish’s biggest sales weekend ever, says Walcott.

It all adds up to unprecedented growth for the company, which landed an $83.3 million investment led by UK-based Balderton Capital in September. Walcott says Big Fish currently has 35 open positions—mostly for engineers, programmers, and software development testers, but also for a director of marketing. Native foreign-language skills are a plus, Walcott adds; the company does a lot of business in Europe.

A few more tidbits about the Big Fish workforce:

—Of its 320 workers in Seattle, 45 percent are engineers. Only about 15 percent of the staff work on game development (for the company’s studio). The rest work on things like building a software platform to handle two million game downloads a day.

—The company’s talent mostly comes from the Northwest. Walcott estimates 95 percent of the staff had a previous job in the Seattle area before joining Big Fish.

—The firm opened an office in Vancouver, BC, in August. It has five workers there, with the goal of building up to about 30 people, primarily for game development. Why Vancouver? A great talent pool, and it’s easier to get work visas there for employees from Europe, for instance.

Looking ahead to next year, Walcott predicts there will be a lot of talented workers available in the first quarter. Big Fish would love to snap them up, of course, but people might be hesitant to make any career moves because of the economy, he says. With those people in mind, I asked him what his company’s greatest selling point is.

Besides its “fun, family-friendly product,” Walcott says the Big Fish culture is open and very collaborative. “I think it’s the best company to work for in Seattle,” he says. OK, he’s a bit biased, but his message is clear. “We really try to take care of our employees…I’m proud to say people here have a very good work environment.”

Sounds like Big Fish is trying to reel in its new employees, hook, line, and sinker (sorry, couldn’t resist).

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OK, this isn’t all that surprising. In the early days of the fourth quarter of 2008, the majority of Washington state’s venture capitalists see the national economy as the top issue facing their portfolio companies, and they’re predicting lower revenue growth and lower valuations for all companies—and no exits.

That’s according to the latest quarterly venture capital outlook survey from the Washington Technology Industry Association (WTIA), which was released today. The survey asks local VC firms about their deal quality and quantity, expected exits, and the financial status of their portfolio companies.

Here are a few lowlights from the survey:

—76 percent of venture capitalists view national business conditions as one of the top challenges facing their companies. That’s up from 43 percent heading into the third quarter of this year (which began July 1).

—One-third of VCs expect revenue growth for their companies to be moderately or substantially lower in the fourth quarter, compared to 14 percent who felt that way heading into the third quarter.

—VCs expect lower deal valuations for companies, regardless of whether they are early, mid, or late-stage. For mid-stage companies, for instance, 88 percent of respondents expect valuations to shrink, compared with 14 percent just three months ago.

—75 percent of respondents expect no growth in hiring of Washington workers between now and the end of the year, with 13 percent expecting a hiring increase. Just three months ago, 57 percent predicted a hiring increase.

—38 percent of VCs expect deal flow to actually increase moderately in the fourth quarter, but 38 percent also expect that moderately to substantially fewer deals will close by the end of the year.

—No exits (IPOs) are expected between now and the end of the year.

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Last October Acceleron Pharmaceuticals of Cambridge, MA, said it had completed a $31 million Series C funding round, bringing the bone-and-muscle-growth company’s total venture funding to an impressive $86 million over three rounds. Now we know what the company’s been spending the money on: Acceleron announced today that it’s increased head count by 40 percent and doubled the size of its administrative, laboratory, and manufacturing facilities in Cambridge. The company says it expects to begin Phase 2a clinical trials of ACE-011, a drug designed to help multiple myeloma patients rebuild bone mass, later this year.

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The Web has been around for long enough that many online businesses that once seemed revolutionary have begun to look routine, tired, even fundamentally flawed. In many industries, there is an emerging second generation of Web businesses that hope to supplant their pioneering predecessors. Look at online comparison shopping in the financial industry, for example. It’s a sector that has long been dominated by advertising- and commission-driven banking sites like LendingTree. But as we reported on Monday, there’s a new site called MoneyAisle that’s completely ad-free; its founders are out to replace the old regime with a reverse auction system where banks actively bid against one another for customers’ business.

Rather than “Web 2.0″—a term that has acquired a specific meaning having to do with hosted services, browser-based interaction, user-generated content, and social networking—you could call this phenomenon “the Web, Take Two.” And now it’s spreading to job boards. Waltham, MA-based PeopleAhead, which launched to the public yesterday, is taking on Monster.com (NASDAQ: MNST), Yahoo’s HotJobs, Dice, and the other traditional employment websites with a new mix of features that emphasize job seekers’ talents and aspirations over their raw résumé data.

There’s a big whiff of Web 2.0 to the PeopleAhead website, where the main activities involve creating personal profiles, soliciting endorsements, and networking with other job seekers. But more than anything, the site amounts to a repudiation of the Monster.com model, where job seekers toss their résumés in with millions of others, and where employers wind up sifting through hundreds of potential employees who may be technically qualified but aren’t good matches, for a host of reasons that aren’t captured by traditional database searches.

“First and foremost, it’s a career advancement website, not a job board like what you might have come to expect, although we do match people to the right career opportunities,” says PeopleAhead co-founder Tom Chevalier, a recent Babson College MBA graduate. As Chevalier and fellow co-founder and Babson graduate Carlos Laracilla explain it, PeopleAhead’s system is built around the concept of competencies. Members start off by picking the areas where they believe their own skills are most evident: problem-solving, for example, or persistence, enthusiasm, or team-building. Each member can then invite peers, supervisors, teachers, or other mentors to visit their profiles and leave their own input about the areas where they excel (a feature that will be familiar to users of the professional networking site LinkedIn). Potential employers can screen job seekers based on these competencies, and see the external evaluations alongside traditional résumé information such as a person’s educational and work background.

“Without knowing that sort of information, you may find somebody who has the requisite number of years of experience, but maybe they wouldn’t fit what your team requires personality-wise,” says Chevalier. “That’s one aspect of how our matching goes beyond what you’d find in a résumé. It goes into who a professional really is rather than what they’ve written down on paper.” To find out who a person really is, of course, an employer will probably want to meet them in person. But PeopleAhead’s process may at least help companies be more efficient about deciding whom to bring in for interviews.

Laracilla and Chevalier founded PeopleAhead in 2006, raised funding from Boston-area angel investors, and spent the last year and a half designing the website, writing and testing the site’s proprietary matching algorithms, and forming partnerships with New England-area MBA programs. Students from these programs have been helping to beta-test the site, and Laracilla and Chevalier expect they’ll now be one of the main sources feeding new members into the system. With today’s public launch, however, anybody can join the network, and employers can set up their own profiles and start screening job candidates.

It’s the PeopleAhead matching process, called “TrueMatch,” that Laracilla and Chevalier say they’re proudest of. It doesn’t work like the typical searches that employers can run against the databases at Monster.com and other job sites; it’s more reminiscent of what mathematicians call fuzzy logic. “Companies define the profile of an ideal candidate for a certain position—for example, the industries they would like that person to have experience with, the type of education they’ve had, the types of activities they’re involved with, the competencies relevant to the company and the position,” Laracilla explains. “Then we …Next Page »

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The U.S. economy’s seeming slide toward recession hasn’t affected high-tech hiring in the Massachusetts region, the Boston Globe’s Robert Weisman is reporting this morning. That parallels what we learned back in December, when we wrote about the out-and-out talent crunch many local high-tech firms are confronting, especially when it comes to hiring experienced software engineers.

Weisman cites figures from the state’s Executive Office of Labor and Workforce Development showing that Massachusetts gained 8,400 professional, scientific, and technical jobs in 2007, along with 2,100 jobs in scientific R&D and 800 jobs in information technology, while at the same time losing 2,600 manufacturing jobs and 3,300 construction jobs.

At SeaChange International, the Acton, MA-based video-on-demand company that we recently highlighted as part of our story on Greater Boston’s Internet video cluster, there are 75 job openings, Weisman reports. “It’s a very competitive job market for software engineers,” Laura Watson, the company’s senior director of human resources, told him. “Most of the people who come in here have offers in a few days.”

Of course, the growth in the IT sector could suddenly stop, as it did in mid-2000 with the collapse of the first Internet bubble. But so far, worldwide demand for software that brings greater efficiency to business or cheaper, more easily accessible forms of communication and entertainment to consumers seems to be bouying up the region’s information-technology economy. Hiring managers told us in December that the competition for qualified engineers is greater than at any time since the Internet boom days of 1999. “This is a great time for very talented people to wake up and look around,” said Jason Gasdick, interim vice president of talent at Web-based physician community Sermo.

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Last week Wade offered some fantastic tips on how to recruit employees in the midst of what’s shaping up to be a major staffing crunch at local information-technology firms. And it got me thinking about something that Xconomist Bill Aulet told me a few weeks ago during a power lunch at Aceituna, over near the Genzyme HQ. We were discussing Xconomy’s own plans for a couple new hires, and Bill chimed in with some telling insights on what firms, especially startups where each new employee is critical, should look for—and avoid.

Bill spoke to some truths we all know—and he was quick to note that these weren’t just his, but “came from working with others and thinking about this here at MIT.” But he had a nice way of framing things that beautifully put in perspective the challenge of figuring out if a candidate is the right fit for a company. He grabbed a napkin and sketched out a rectangle divided into four quadrants, with “values” (meaning how well the candidate’s values align with the company’s) on the X axis and “contribution” (essentially, how productive the person is) on the Y axis. Like this:

Now, a couple things are obvious. A home run is an employee in the upper right—the high contributor whose values align perfectly with those of the company. Just as clear is the lower left—you don’t want that person. If you make a mistake and a new hire falls in this category, it’s an easy workforce-reduction decision. But what was really interesting to me was Bill’s take on the remaining two quadrants.

Let’s start with the lower right, the low contributor who believes in the company and shares its values. I was expecting a tough, cut-bait attitude on this—but Bill explained that such employees can indeed be valuable, if they don’t cost too much and if you can take the effort to channel them into productive work at which they can do well. His essential message: don’t give up on them right away.

Now to the upper left. A talented, high-contributing person who might well be in it mainly for themselves and in any case whose values are not the company’s values. Bill’s message here was adamant—don’t hire them, and if you do, get rid of them and fast. “This person is like poison,” he said, or words to that effect.

Here’s the dilemma, though, says Bill. This brand of high contributor can seem great. “People are closing sales and doing all kinds of things,” he says. The problem is, they have a bad attitude. They might cut corners the company doesn’t want to cut. They might not be forthright. Maybe they undermine company decisions. Whatever the specifics, it means big trouble. As Bill puts it, “That is the most dangerous person, because you think you need them—they have a stranglehold.”

You have to move quickly to shed this type of person, he says. “The deeper they grow roots in the organization, the more disruptive, the more devastating, to take them out. And if they’re there for a while people tend to think their values are the values of the organization—and everything else atrophies.”

All in all, Bill says, it’s the sort of decision that can make or break a company. “The moment you cut corners on values at the top is the day they become meaningless and you have lost your potential ethical compass. Your chances of being a high-performance organization are nil.”

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