It’s hard to believe that two companies that have spent the last three years suing each other really mean it when they say that together they will be stronger. I’m talking about speech recognition competitors Cambridge, MA-based Vlingo and Burlington, MA-based Nuance Communications.

The two software makers announced Tuesday that Nuance would acquire the younger, smaller Vlingo. It came as a shock, just months after Cambridge, MA-based Vlingo hit Nuance (NASDAQ: NUAN) with a lawsuit that included allegations like commercial bribery and unfair competition.

On the surface it looks like a potential last resort option for the smaller startup after years of costly legal battles (covering patent infringement, false advertising, and more). But the marketing machines of Apple and Google and their newest voice-controlled smartphones, such as the iPhone 4S, could mean a host of new threats in the speech software space, causing the formerly embattled companies to join forces to survive, a number of Boston mobile experts have said.

All pending lawsuits between the companies are now “stayed,” Vlingo CEO Dave Grannan told me, meaning that they’ll be put in limbo until the acquisition closes, at which point they’ll be officially dismissed. Grannan has previously said he’d be open to an acquisition by Nuance if the terms were favorable. In a phone interview Tuesday afternoon, Grannan declined to discuss how much Nuance paid for Vlingo, but did want to talk “the timing of the transaction.”

The shotgun marriage of Nuance and Vlingo comes two months after Apple introduced its iPhone 4S with the built-in voice-controlled virtual assistant Siri, which can handle everything from searching for weather information to calling a cab.

“That has caused just a legion of new competitors to enter the space,” Grannan said. His company makes voice-recognition software that exists as a standalone application sold in the Google Android, Blackberry, and Apple iTunes app stores, and built into devices like Samsung mobile phones.

Facing other voice recognition startups doesn’t seem as menacing, but confronting one major Internet giant does. “It’s more scary for us that Google is going to double down its investment to try to catch Apple’s Siri,” Grannan said. “Both sides realized that we’ve long since passed the value of competing. If we’re going to survive in this marketplace we need to cooperate.”

Mountain View, CA-based Google (NASDAQ: GOOG) recently acquired Clever Sense, the maker of a mobile assistant app called Alfred that makes recommendations on nearby bars and restaurants. The purchase has been pegged as part of Google’s strategy to take its share of the voice-enabled virtual assistant space.

“Rather than spend the next year in legal battles, [Nuance and Vlingo] decided to join forces on this,” said Mark Lowenstein, managing director for the consulting firm Mobile Ecosystem. The acquisition … Next Page »

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Cambridge, MA-based voice-to-text tech startup Vlingo, which just three months ago charged Nuance Communications with unfair competition, commercial bribery, breach of contract, and intentional interference with prospective business relationships, is being acquired by the Burlington, MA-based speech software giant, according to an announcement today.

Nuance (NASDAQ: NUAN) and Vlingo, which develops speech-recognition technology for cell phones that has been likened to Apple’s Siri, have spent years wrangling in court, starting with a 2008 patent infringement lawsuit filed by Nuance, covering its patent known as ’295. As of this September, the two companies were involved in seven open lawsuits with each other, five of which were filed by Nuance and two of which came from Vlingo.

[Disclosure: the brother-in-law of Xconomy Boston editor Greg Huang is a co-founder of Vlingo. Mr. Huang was not involved in the planning, directing, reporting, or editing of this story.]

Today’s announcements make no mention of the lawsuits. Nuance said in its statement that consumer demand for voice-enabled controls on devices like phones, tablets, televisions, and navigation devices prompted the deal, and that “Nuance and Vlingo will combine their deep innovation and R&D expertise to deliver next-generation natural language interfaces across numerous markets and industries.”

Vlingo’s statement was much less detailed, noting that the transaction was subject to customary closing conditions, that it is expected to close in 2012, and that its purchase price is not being revealed. The startup also noted that it will operate as an independent company until the closing is complete. The Nuance press release quotes Vlingo CEO Dave Grannan as saying: “Vlingo and Nuance have long shared a similar vision for the power and global proliferation of mobile voice and language understanding. As a result of our complementary research and development efforts, our companies are stronger together than alone.”

In its September lawsuit against Nuance, Vlingo revealed the complicated relationship it shared with Nuance. The lawsuit alleged that at one point Nuance CEO Paul Ricci attempted to bribe three Vlingo executives by offering them $5 million each if they could convince their board of directors to sell to Nuance (which was already an investor in Vlingo). Despite all of it, Grannan mentioned that he wasn’t opposed to selling his startup to Nuance, but that they “don’t want to be forced into doing it at a low price based on these tactics that they use.”

When I spoke with Grannan back in the summer, right after Nuance accused Vlingo of false advertising based on statements Vlingo made on its website about its technology, he noted that the bigger company was using litigation as a business strategy. “They just want to get us into court to cost our startup time and money,” Grannan said.

Vlingo appeared to have gained some ground in August, though, when a federal jury in Boston found that Vlingo did not infringe on the Nuance ’295 patent, which covers the technique for making computerized transcriptions of a users’ speech more accurate over time using audio samples from multiple sessions. But it’s presumably been a costly road for Vlingo. Grannan hasn’t disclosed the startup’s exact legal expenses, but noted that each patent trial can run a company between $2 million and $3 million. And in 2010 Vlingo bought a crop of patents from Bellevue, WA-based Intellectual Ventures as aid in the patent litigation.

Both companies say that they are committing to innovating and taking a bigger share of the voice-driven virtual assistance space. It will be interesting to see whether the two companies are truly “stronger together,” given their bitter and embattled history.

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Plastic, oil, natural gas, paper, solar panels, analytics, semiconductors, blimps, mobile phones, wind turbines, smart grid. These were some of the words tossed around by the six teams presenting at last night’s Cleantech Open Northeast Regional Finals. Three companies were selected to go on and compete in the Cleantech Open Global Forum in California next month. Interestingly, a few of the semifinalists are also part of the local startup program MassChallenge, which like the Cleantech Open, models itself as a startup accelerator and mentoring program with a business plan competition tucked into it.

Can you guess which of the words above apply to the three winning teams below? Take a look and see if you were right.

—PK Clean (a MassChallenge 2011 finalist) is “converting mountains of trash into barrels of oil.” The company has developed and tested a process that converts plastic waste into oil, using a proprietary catalyst. PK’s CEO Priyanka Bakaya, an MIT Sloan MBA, says the 45 million tons of plastic occupying landfills per year can be turned into about 9 billion gallons of oil (representing 25 percent of annual U.S. auto consumption). The company has already tested the tech at a pilot facility in India and is targeting the metal recycling industry as its first customers. After taking apart old cars, metal recyclers are left with plastic remnants that they have to pay to get landfilled. PK will take that away for free to turn into oil. There’s other competition in the field, namely from Portland, OR-based Agilyx (which recently raised $22 million in venture funding), but Bakaya says PK’s catalyst and cheaper process give it an edge.

—Qado Energy, a smart grid analytics startup, was the big IT play in the bunch. While maybe not as sexy as turning plastic to oil or printing invisible solar panels on paper (seriously), it’s aiming to solve a big problem for utilities and energy developers: accurately predicting the distribution and effect of new cleantech sources plugging into the grid. As co-founder Lorraine Wheeler explained, when wind or solar developers want to add their technology to the energy distribution grid, utilities have to perform studies analyzing the impact of the new tech on the grid, and produce a list of needed upgrades that the developer must pay for. Qado’s technology is designed to make this planning process more accurate and efficient, with software that pulls in utilities’ data from different sources and converts it to a standard format. From there, the potential effect on the grid can be modeled and analyzed in displays for utilities, regulators, and energy developers.

—Last up was fabless semiconductor developer Arctic Sand. The company is making smaller, more efficient power converter chips designed to cut down on the electricity needed to run traditional data centers. The company, whose team comes from MIT and Harvard, aims to design the chips for other applications like powering mobile phones and hopes to get its tech to the market through licensing deals with existing computing players, says CEO Nadia Shalaby. Arctic Sand was also a participant in MassChallenge earlier this year.

There were some familiar faces among the other three semifinalists. OsComp Systems—developers of a more efficient natural gas compressor—took home a check from MassChallenge last year and presented at our XSITE Xpo this year. Altaeros Energies also talked about its blimp-hoisted wind turbines at our Xpo. The last Cleantech Open Northeast semifinalist, Ubiquitous Energy, is working on the aforementioned printable solar photovoltaic cells for paper and fabric. The cells are designed to power mobile phones for owners in areas that aren’t even plugged into the power grid, and even further down the line, could enable dynamic displays on surfaces like cereal boxes (think digital display expiration dates). We’ll still have to keep an eye out for those teams.

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Lilliputian Systems, a Wilmington, MA-based developer of fuel cells small enough to power mobile phones and laptops, has brought in $11.1 million of a potential $21 million offering of equity and options, an SEC filing shows. The money comes from 14 investors. Lilliputian raised $25 million in 2009, from Stata Venture Partners, Altira Group, Atlas Venture, Fairhaven Capital, Rockport Capital, and Kleiner Perkins Caufield & Byers.

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The sale of Bellevue, WA-based T-Mobile USA to AT&T for $39 billion shook up the mobile world this weekend, both nationally and in the Seattle area. It’s unclear what the practical effects will be for T-Mobile employees in the Puget Sound region, and we might not know for some time: The companies say the acquisition process could take about a year.

T-Mobile’s sale does, however, clearly mark the end of another major era in the region’s longstanding leadership in the wireless field. Check out this really interesting interview that Xconomy’s Greg Huang did with venture capitalist Tom Huseby in 2008 for a sense of the history at play. Basically: AT&T’s wireless business came of age with the 1994 acquisition of Seattle’s pioneering McCaw Cellular. And McCaw veteran John Stanton started VoiceStream, which was purchased by T-Mobile in 2001.

As Huseby noted in that Xconomy interview, “Every time someone was bought, they actually didn’t move people out of Seattle. People would move here, and it just kept growing … We have more concentration of carrier presence here than anywhere else in the country. It’s unbelievable.”

That’s not the situation today. AT&T’s headquarters are in Dallas and will undoubtedly stay there. In Sunday’s press release, AT&T did say that “the combined company will continue to have a strong employee and operations base in the Seattle area.” An AT&T spokesman told The Seattle Times’ Brier Dudley that “any reduction we anticipate will come through natural attrition.” GeekWire also got ahold of the memo sent to T-Mobile employees, in which CEO and President Philipp Humm said that “AT&T’s leadership has said keeping [T-Mobile's] talented people through this transition is one of their top priorities.”

Meanwhile, AT&T President Ralph De La Vega tells Mobilized that the tie-up will improve the network, won’t be a distraction for customers, and should have a good chance at getting federal approval. Washington, D.C.’s The Hill interviewed AT&T policy executive Jim Cicconi, who indicated that one element of the regulatory case will be that consolidation in mobile was inevitable.

And finally, The Seattle Times’ Jon Talton saw no positives for the Seattle area in the T-Mobile news. I found particularly compelling Talton’s emphasis on the effect that losing a major standalone tech company will have on the entrepreneurship landscape in the region. Therefore, his take gets the last word:

“I believe there’s nothing like a major headquarters for well-paying jobs, civic stewardship, attracting talent and capital, and fostering executive talent that leaves the mother ship to start new enterprises. Back-office towns always languish.”

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Needham, MA-based Illume Software, maker of the iZUP mobile app, announced it has raised $2.4 million in new financing from the Massachusetts Technology Development Corp. and individual investors. As we’ve previously reported, Illume’s software aims to stop people from talking or texting on their mobile phones while driving. The company started in 2009 and has raised $6.5 million to date.

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Skyhook Wireless may have won the audience favorite vote during the “location smackdown” at Xconomy’s Mobile Madness conference last week, but people in the tech-business community are still wondering: what’s next for the firm?

Boston-based Skyhook, founded in 2003, is a pioneer in location-positioning technology for mobile devices. The company’s software determines the precise location of a device based on data from Wi-Fi networks, cellular towers, and GPS satellites. The technology is deployed in thousands of mobile apps and tens of millions of devices worldwide, made by the likes of Apple, Samsung, Motorola, Dell, Qualcomm, Texas Instruments, Intel, and Sony.

But the company hit a rough patch last year. In July, Skyhook confirmed that Apple dropped its location-finding software from the latest iPhone (and the iPad) in favor of Apple’s own technology. And in September, Skyhook filed a pair of lawsuits against Google, alleging that the search and advertising giant infringed on Skyhook’s patents with its in-house location system, and also interfered with contracts Skyhook had with Motorola and Samsung last spring (to put Skyhook’s software on the manufacturers’ Android phones).

Many observers have interpreted those competitive interactions as a serious threat to Skyhook’s business. The question I’ve been hearing on the street from tech entrepreneurs is, does Skyhook need to reinvent itself, or “pivot” in a big way?

Not so much, says Ted Morgan, Skyhook’s founder and CEO. The company’s current growth plans are “less a pivot” than a question of “how do we do more?” he says. In an interview last week, Morgan laid out his firm’s plans to compete on different types of devices and in a wider range of mobile applications. He also had more to say about the situation with Apple and Google, and its broader significance to startups and the mobile industry.

Reading between the lines, my take is that the company is adjusting its strategy because of these tech giants—it really has to—but it’s not a drastic change. (Then again, if Skyhook were planning to make a big strategic shift, it wouldn’t want Google and Apple to know about it.)

Morgan began by giving a high-level pshaw to naysayers who think Skyhook’s core business is petering out. “The strategy is more sound than ever,” he says. “Google is the only competitor. We own all the intellectual property around it. While the Google [litigation] is a headache, you couldn’t ask for a better market to be in.”

What’s more, he touts Skyhook’s ability to “get around Google” by working … Next Page »

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I learned at least three things over coffee last week with Nathaniel Borenstein, one of the fathers of modern e-mail systems. Sadly, none of them keep me from wanting to set fire to my inbox, which surpassed 30,000 unread messages this weekend.

Borenstein is chief scientist at Mimecast, a U.K.-based e-mail management firm with a strong presence in Boston. He is based in Michigan and has some roots there, as a former faculty member at University of Michigan and a founder of NetPOS, an e-commerce firm in Ann Arbor, MI. He is also a deep thinker on technology and society who isn’t afraid to speak his mind, so I kept my notebook open and ready as we talked about current trends in tech and business.

Here are my three takeaways, from specific to general:

1. Voltage Coffee & Art, the new startup hangout spot near Kendall Square, doesn’t strike out-of-towners like Borenstein as a very inviting place for meetings. It’s not particularly cozy or private, especially for a cafe. (Truth be told, I don’t love its coffee either, but that’s what a couple years in snobby Seattle will do to you.) But it’s still a good place to get work done or have a non-private meeting—and definitely a nice gathering spot for entrepreneurs.

2. The spam wars continue, albeit more quietly. It seems like all the talk about “spam killing the Internet” peaked about five or six years ago. And, despite my inbox woes—some messages are spam I haven’t deleted yet—I feel like spam isn’t the problem it once was. Not so, says Borenstein. We’ve just reached “homeostasis,” he says, whereby more people work on combating spam when it gets bad, but when they ease up, spammers swoop in and try new things. Borenstein thinks micropayments—a clever way to make spammers pay for sending messages—might be the most effective solution (though micropayments in general still face an uphill climb because banks don’t like the idea, he says). “We’ve barely scratched the surface of countermeasures,” he says. “It makes me think the Internet is not complete.”

3. Timing is everything, especially in the business of technology. This is a well-worn truth, but as the latest examples, Borenstein points to speech recognition (especially on mobile phones), tablet computing (iPad and all its soon-to-be competitors), and the sector du jour, group buying. Each of these is an old idea whose time has come. In particular, daily-deal sites like Groupon are “driven by a good idea that’s not primarily technology,” he says. “That’s also why it’s sustainable.” What’s more, Borenstein predicts there will be more than one or two winners in the sector. “It could be a market with a lot of chimps and no gorilla,” he says.

Lastly, we talked about a darker side of technology that’s been getting a lot of attention lately: the impact of the Web on humankind’s ability to think deeply. Borenstein penned a blog post last week called “The Internet is turning you into a high-tech lab rat.” The title, which references Nicholas Carr’s The Shallows, pretty much says it all. The idea is that dealing with constant e-mails, tweets, blogs, social networks, and addictive games is overloading people’s brains and degrading their ability to think about important things. (This also ties into what my colleague Wade calls “on demand disorder.”)

Borenstein doesn’t totally buy the argument, but he is taking some steps to combat distractions—by doing things like delaying all but his most important incoming and outgoing e-mails. (That reminded me of Baydin, the e-mail tech startup that recently moved from Boston to Silicon Valley, as was first reported by my colleague Erin.)

But perhaps it is telling that several of Borenstein’s friends and colleagues who were Internet pioneers “have become disillusioned and headed for the hills,” he says. Indeed, many who were involved in the early days of the Web, he says, “now think it was a bad idea.”

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Let’s get caught up on some Seattle tech gossip, shall we? It’s on my mind as I come back to town for the second time in as many weeks. Man, I miss this place and all its back-channel intrigue…

—Nick Hanauer of Second Avenue Partners told me a little more about the new social gaming startup he’s working on with his friend Rich Barton (and former aQuantive employees Scott Howe and Maggie Finch). King of the Web, as it’s called, is totally different from Zynga, the San Francisco maker of hit games on Facebook such as FarmVille and Mafia Wars, he said. Hanauer wouldn’t give many specifics, but he said the company’s games (the first of which might be released as early as January 2011) would include a real-world component. And that it will compete not with Zynga or Playfish, but with “anything you’d do on the Internet that would entertain you.” (The word “game” doesn’t do it justice, he said.)

—Sparkbuy raised $1 million in angel and venture capital last month. This is the new stealth startup from Dan Shapiro, the co-founder of Ontela (now Photobucket). Shapiro declined to comment on what his team has been building. If I had to hazard a guess, based on rumblings in the grapevine, I’d say it’s something like a price comparison engine for consumer electronics—laptops, mobile phones, and so forth. Maybe something like Kayak for laptops. Who wouldn’t use that? (Well, maybe Mac users.)

Shapiro did comment about the experience of being a second-time entrepreneur: “The luxury and terror of doing your second startup is you have only one item on your worry list: can I make this business work? It’s not necessarily much easier, but it sure does focus the mind.”

—PhotoRocket, the online photo-sharing startup led by Scott Lipsky, the former Amazon and aQuantive exec, has raised some more money ($1.3 million) and is in private alpha trials. From what I can tell, PhotoRocket makes it super easy to share photos with people in your network, just by clicking on the pictures. It’s hard to tell whether this really represents a breakthrough technology, and whether it could go mainstream. Still, would you bet against a guy (Lipsky) who sold his last two companies, one of them (aQuantive) for $6 billion-plus?

—TechStars Seattle demo day is finally here. Which companies will wow potential investors? Which ones could change the world? A few of the startups I’ll be looking at (no disrespect to the others): Giant Thinkwell (social game based on virtual celebrities); Deal Co-op (like Groupon, only different); and Cabin Fever Toys (led by former Cranium exec and Microsoft manager Adam Tratt). I’ll also be looking to evaluate the broader impact of this seed-stage mentoring program on the Seattle tech scene. That might take a while though.

—It sounds like Seattle-based Isilon Systems’ (NASDAQ: ISLN) rumored acquisition by Boston-area data storage giant EMC (NYSE: EMC) has stalled over pricing, at least for now. Sources outside the companies tell me the deal will probably still go through eventually, because Isilon’s network-attached storage technology fills a big need for EMC in its competition with NetApp, IBM, and other big firms. But Isilon’s price (rumored to be north of $2 billion) is too high. Will another bidder emerge to put pressure on EMC?

—Speaking of acquisition rumors, I’m hearing that Seattle-based Widevine Technologies might get bought by Google (NASDAQ: GOOG). This would make some sense, as Widevine’s digital rights management, streaming, and copy protection/tracking technology (for content owners and cable/Internet service operators) could fill a hole for Google TV in its competition with Apple and other companies looking to get ahead in online video distribution. But any deal is just speculation for now. Mostly.

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It’s shaping up to be a busy week for Michigan venture capital and angel investment news.

—Dexter, MI-based ReCellular, an electronic waste company focused on collecting and recycling mobile phones, cameras, and other devices, said yesterday it has received an investment from Beringea. The amount of financing was not disclosed, but it was made through Beringea’s $185 million InvestMichigan Growth Capital Fund (this is the fund’s 17th investment). ReCellular has 280 employees in Michigan and is led by CEO Steve Manning. The company says it collects more than 400,000 mobile phones per month, of which 70 percent are resold and the rest are recycled. Farmington Hills-based Beringea is Michigan’s largest venture firm; it has more than 70 portfolio companies in the U.S. and U.K.

—The Michigan Women’s Foundation, a statewide organization focused on supporting female-focused programs, said yesterday its board of trustees has approved the formation of a Women’s Angel Fund that will provide investments in early-stage businesses owned or run by women. The program also will provide mentorship and professional support for female founders. Xconomy’s editor-in-chief Bob Buderi had the scoop on the angel fund news in this in-depth profile of the Michigan Women’s Foundation back in August. Financial details including the size of the fund and the size of individual investments have not been formally announced yet, although foundation CEO Carolyn Cassin told Bob investors will be asked to commit $20,000 a year for five years to the fund.

—With all the gloom and doom around the venture capital industry, it’s refreshing to see Michigan being among the 12 states having VC firms that raised money in the third quarter of 2010. That’s according to a Thomson Reuters study put out yesterday by the National Venture Capital Association. Ann Arbor-based Resonant Venture Partners has a modest haul so far (a reported $500,000 on its way to a targeted $10-$20 million). Last month, Bob posted a more complete list of Michigan venture firms that have recently closed funds or are raising funds now.

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The New York Times has a pretty impressive website for mobile apps, with plenty of information to help its loyal readers access news on their iPhone, BlackBerry, Palm Pre, Android, and other mobile devices. As the premiere national newspaper, though, the Times also has more wherewithal than most local newspapers and broadcasters to develop customized apps for mobile devices.

So what about the rest of the media industry?

Enter Verve Wireless. The Encinitas, CA-based startup, which has been keeping a low profile, has developed a technology platform that enables a range of newspapers and other media companies to publish their content and serve ads across a host of mobile devices. The company also offers different templates so its media customers can choose how their content will be displayed and development tools that allows each media customer to create their own brand identity on Verve’s software as a service.

When Art Howe and Tom Kenney started Verve in early 2005, they saw a great opportunity to develop technology that both large and small media companies could use to serve local news and advertising to mobile devices. They also had the benefit of approaching the idea from different perspectives.

Kenney had spent the previous eight years working for Nokia Venture Partners, the Finnish telecommunications giant’s venture capital fund, which is now known as BlueRun Ventures of Menlo Park, CA. Kenney, who had been overseeing Nokia’s investments in mobile Internet technologies, says he began to see that … Next Page »

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I left Seattle just over a month ago, and people keep asking if I miss anything about it. Yes, I say. But it’s not the amazing coffee, the great food, the nice people, or the beautiful scenery. I miss Microsoft.

I’m only half-kidding. I don’t miss hearing about Steve Ballmer’s iPhone and every turn of the Microsoft product screw on a daily, up-close basis. And Microsoft serves as a punching bag (or a crutch) for the media and business community way too often for my tastes. But a tech community needs a giant like that to anchor it, and keep it grounded. Amazon.com wouldn’t be in Seattle if not for Microsoft’s talent pool. RealNetworks wouldn’t be there either. Every other techie you meet in Seattle has a Microsoft connection.

Nothing like that exists in Boston. There’s a community around IBM and a bunch of hardware and data storage companies. There’s an entrepreneurial network around MIT, Harvard, Boston University, Northeastern, and many other schools in the area. There are big companies like EMC, Nuance, and Raytheon. But there isn’t one overarching technology presence.

And yet, on a national scale, Redmond, WA-based Microsoft (NASDAQ: MSFT) has been quiet lately. Too quiet. All the noise in the tech industry is being made by the likes of Facebook, Google, Apple, and even IBM these days. Under the surface, though, big things are happening across the cities in Xconomy’s network. We might even look back at 2010 and say it was the turning point for Microsoft’s new businesses.

Here are a few dots to connect:

—Microsoft’s big Web search project known as Bing is just over a year old. Doesn’t it feel like longer than that? Credit Microsoft’s marketing efforts for getting the word out about this, the most dangerous competitor to Google’s core business. Bing has slowly but steadily gained market share in search—up to 12.6 percent this summer, while Google has 65.8 percent (according to comScore). Just yesterday, Bing announced it is officially powering all of Yahoo’s search capabilities in the U.S. and Canada. Next up: integrating Yahoo with Microsoft’s search advertising platform, and trying to make some real money.

—Other than Bing, Microsoft’s best chance to capture the online consumer crowd … Next Page »

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Three Boston-area venture capital firms have led a new $48 million financing round for Smooth-Stone, a chip startup based in Austin, TX. Battery Ventures, Flybridge Capital Partners, and Highland Capital Partners were joined in the investment deal by ARM, Advanced Technology Investment Company (ATIC), and Texas Instruments. The financing news was announced in a press release this morning. As part of the deal, Battery’s Ken Lawler, Flybridge’s David Aronoff, and Highland’s Sean Dalton have joined Smooth-Stone’s board of directors. Smooth-Stone was founded in early 2008, and is focused on developing and adapting low-power semiconductor chips from the mobile-phone industry for use in servers and data centers.

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Jason Hartlove has a name and a rakish mug worthy of a soap-opera star, a resume that any Silicon Valley engineer would envy, and a bit of swagger as a turnaround CEO. He co-invented the optical mouse at Hewlett-Packard, ran a 3,000-employee manufacturing operation for HP spinoff Agilent in Malaysia, and set South Korea’s struggling MagnaChip Semiconductor on its current path to an IPO. “One of my investors said this—so I won’t claim it for myself—but I am a technology MacGyver,” Hartlove says. “If you give me some piece of technology, I can really figure out what to do with it.”

But at Palo Alto, CA-based Nanosys, where he took over as CEO in October 2008, Hartlove may be facing his biggest challenge yet. With an impressive portfolio of patents based on work at MIT, Harvard, UC Berkeley, and other institutions, the nine-year-old company has repeatedly been described as one of the most promising in a batch of nanotechnology startups that emerged around the turn of the millennium. In its early years, it investigated areas like solar cells and display electronics where it was thought that nano-engineered materials could lead to higher power output or greater efficiencies. But real commercial applications for nanotechnology insights have been slow to emerge, and Nanosys has yet to bring a single product all the way to the market (the first is set to appear in the fourth quarter of this year, if all goes according to plan).

“The clock is ticking for Nanosys…since its financial backers are counting on a return on investment in another three to five years,” wrote Technology Review magazine. That was in 2004—just a few months before Nanosys called off a planned IPO that still hasn’t happened.

Nanosys CEO Jason Hartlove

After the pulling the plug on the IPO, “the company sort of struggled a little between 2005 and 2007 about what exactly its mission was,” Hartlove told me earlier this week. “It continued to do some directed research but didn’t really have an eye toward commercialization.” The shakeup year was 2008: CEO Calvin Chow was let go, former Symyx Technologies CEO and Venrock partner Steve Goldby became the company’s interim leader (he’s still chairman today), and the board recruited Hartlove to find Nanosys some real products.

It wouldn’t be a stretch to call Hartlove’s tactics since 2008 MacGyveresque, and so far, he hasn’t even used a Swiss Army knife. He has focused the company on the two research programs that seemed most likely to produce marketable products in the near future. And he has pushed forward one of them, a “QuantumRail” component that increases the brightness and efficiency of LED backlights for mobile device displays, to the point that the company is earning “real revenue from real paying customers,” in Hartlove’s words. The first customer is LG Innotek, which plans to use the QuantumRail in 5 million phone-sized displays by the end of 2010; its purchases recently contributed to Nanosys’s first break-even month.

Demand for the nanocrystals that go into the QuantumRail, as well as the high-capacity anode material that Nanosys is developing for the lithium-ion battery industry, is growing fast enough that the company will soon need to find larger quarters outside Palo Alto, Hartlove says. And within 18 months, he says, the company hopes to be in a position to restart the IPO process. “We’ll have display products on the market, battery products on the market, a track record of revenue and profitability,” he says. “Those are the milestones.”

At least one Nanosys investor, Lux Capital, seems to buy into Hartlove’s optimism. “Things have really accelerated and they’re on a rapid path to success,” says Josh Wolfe, a managing partner at the New York-based firm, which contributed to a … Next Page »

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A new law is about to go into effect in San Francisco requiring sellers of mobile phones to post the “Specific Absorption Rate” (SAR) levels of the devices. How will conveying this information to consumers affect sales of mobile phones and devices—and which manufactures will feel the burden of this new stigma?

The Cellular Telecommunications Industry Association defines SAR as “a way of measuring the quantity of radio frequency (RF) energy that is absorbed by the body.” For a mobile phone to be sold in the United States or Canada, its maximum SAR level must be less than 1.6 watts per kilogram. In Europe, the highest allowed SAR level is 2 watts per kilogram.

I should state now that currently there is no concrete evidence that current SAR levels affect humans in any detrimental way. Some studies have shown that cellular radiation has no affect on the human body and does not cause cancer, while others say that higher levels of radiation with continued usage can have an impact on human physiology.

But it is likely that people’s fears of “radiation” will lead consumers to view higher numbers as negative, even if only subconsciously, which will affect mobile device sales.

By requiring sellers of mobile devices to post SAR numbers, the manufacturers on the low end of the scale would have an additional tool in their marketing arsenal to convince buyers that their device is the better choice for you. The numbers will probably not affect the buying decisions of brand loyalists, in the same way that nutrition facts don’t stop many consumer from buying food that may not be the healthiest of choices.

San Francisco may be the first city in the country to require SAR number to be posted, but will other jurisdictions follow suit? If more cities and states start requiring SAR levels to be posted along with the device, it may indeed begin to affect sales of devices in the upper range of “acceptable” limits. If manufacturers jump on the low-SAR band wagon and reduce their SAR levels by either lowering the power of their handsets or inserting shielding, we may see less reliable phones and more dropped calls.

What do you think about having the SAR numbers displayed with the mobile device? Will a higher number affect your buying decision? Do you have a phone in the “high” risk area, and how does that make you feel about continued use of the device? Let’s get a discussion going.

Data sources for charts: Environmental Working Group (http://www.ewg.org/node/2839, http://www.ewg.org/cellphoneradiation/Get-a-Safer-Phone?allphones=1)

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Boston-based Skyhook Wireless, a geo-location software firm, announced today it has formed a partnership with Samsung Electronics to put its location-aware technology on Samsung mobile devices. Financial details weren’t given, but the deal adds a significant player to Skyhook’s growing list of partners, which includes Apple (iPhone and iPad), Motorola (Android phones), Dell, Qualcomm, and Texas Instruments. Skyhook’s core technology determines a device’s location based on the identities of nearby Wi-Fi networks; it also uses GPS satellite and cellular network information. The company was founded in 2003, and its investors include RRE Ventures, Bain Capital, Intel Capital, and CommonAngels.

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For entrepreneurs, launching health IT startups to commercialize mobile or wireless technologies can be daunting. While there are many opportunities to create companies around mobile innovations in healthcare, there aren’t really many successful business models to follow. Sometimes it takes lots of smart people from multiple disciplines to rally around an idea to transform it into a viable venture.

So we’re bringing together five successful veterans from the healthcare arena for our mobile health panel at the annual Xconomy Summit on Innovation, Technology, & Entrepreneurship (XSITE) at Babson College next week (register here). With this group of panelists, and our expected audience of entrepreneurs and technologists, we expect there to be plenty of new ideas raised about mobile health to get our synapses firing.

Back from last year’s XSITE, Michael Greeley, a general partner of Flybridge Capital Partners (formerly IDG Ventures) in Boston, is going to lead the dialogue as moderator. Not only is Greeley an experienced investor in healthcare and technology companies, he’s not afraid to challenge the status quo in these industries. His firm backs Newton, MA-based PatientKeeper, which has found success in getting thousands of doctors to use its smartphone applications for automating their workdays. (Ask the moderator where his firm plans to make future bets on health IT.)

We’re anxious to hear more from Rick Lee, the CEO of recently launched Healthrageous, who recently told Xconomy that his mobile health startup aims to put individuals in the driver’s seat of their own healthcare, rather than leaning heavily on doctors to ensure that they stay healthy. The firm revealed yesterday that it raised $6 million in a Series A round of funding, so Lee obviously knows what it takes to attract venture money to mobile health startups.

Pam McNamara, president of the contract engineering company Cambridge Consultants in Cambridge, MA, is leading her firm as it develops new mobile health products such as this digital blood pressure device called “Vena.” Before she took the helm of the firm’s U.S. operations, McNamara was CEO of the electronic patient diary provider CFR Health from 2003 to 2008. So she knows how to develop a mobile health product and commercialize it. (For more about McNamara, see my profile, written shortly after she joined Cambridge Consultants in February 2009.

It helps to have a hospital chief technology officer in the room to keep everyone honest about what new mobile technologies will medical providers actually adopt. Cara Babachicos is the CIO of Partners Continuing Care, the branch of Partners HealthCare System of Boston that provides medical services to people both in traditional clinical centers and in their homes. There’s a big push to use information technology to improve care for people both inside and outside of hospitals, and Babachicos is on the front lines of this trend.

We knew we wanted a physician on the panel to inject his or her expert medical insights into the discussion, but we also wanted a doctor who is pioneering the use of technology in healthcare. John Moore, a physician and researcher at the MIT Media Lab, has both the requirements covered. At the Media Lab, Moore is working with his colleagues on a program called CollaborRhythm, which aims to use wireless devices and new interfaces to help patients stay connected with doctors from virtually anywhere. Here’s a link with a video demo of the project. (Moore is the doctor in the video, as one might guess.)

We hope you’ll come to the panel (which is one of four industry-focused breakout sessions during the afternoon of XSITE—here’s the full agenda) with bright new ideas about mobile healthcare. Bring your tough questions and your expertise, because both are needed to spark the meaningful debates and discussions we plan to have. To participate, make sure to register online as soon as possible.

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David Bernick saw his mom’s struggles in coordinating care for his elderly grandmother. His mom relied on spreadsheets and Post-It notes to organize his grandmother’s visits with doctors, home health workers, and physical therapists. “This is a lot of stuff to keep track of,” Bernick says. “This is a real problem and it’s only going to get worse.”

Bernick, a 33-year-old hacker and veteran software engineer, says he has been working in earnest since January to develop Web-based software that supports those in the trenches of home health care: home nursing agencies and doctors, as well as patients and their family members. He and his business partner, Neil Aresty, have formed Eldersync.com in Boston to commercialize the technology. Aresty, a lawyer by training, previously co-founded and served as chief executive at the Boston legal software firm Lextranet, which was sold to the St. Paul, MN-based business services outfit Merrill in 2007 for an undisclosed sum. Bernick says that he was one of Aresty’s first technical employees at Lextranet.

Two home health firms began to test a beta version of Eldersync last month, Bernick says, and he’s looking for more agencies to try it out. Health workers can use the Web-based system to schedule visits with patients in their homes, can verify via text message or phone call to the system that they’ve seen a patient, and can file notes on a patient’s status to the system using any Internet-connected device. The plan is to also sync the online system with a patient’s home health monitoring devices. So caregivers or family members who have a patient’s permission can, say, tap that patient’s online Eldersync dashboard to check his blood sugar levels or heart rate.

Beyond seeing a need for their technology in their own families, Aresty and Bernick discovered that home health agencies present a large initial market for Eldersync. The agencies are growing rapidly in part because of efforts around the nation to provide care for people in their homes to reduce expensive hospital stays, according to the U.S. Department of Labor Statistics, which projects that the number of home health workers will grow from the 1.74 million counted in 2008 to … Next Page »

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Sand 9 has secured enough venture capital to grow from a pre-revenue startup to—if all goes as planned—a profitable company, Vince Graziani, the firm’s CEO, says. His Cambridge-based startup, a developer of tiny timer and frequency control technology for wireless devices, has raised $12 million in a Series B round of funding led by a new investor, Commonwealth Capital Ventures of Waltham, MA.

Sand 9‘s technology could potentially help make mobile phones smaller, more integrated, and offer more functions than current models, according to Graziani. The firm’s invention is a new type of resonator—a device that ensures that circuits in wireless devices operate on the right frequencies—which is made with ultra-tiny electronics rather than the relatively large quartz crystals that are historically used to make the resonators.

The company’s technology, originally developed at Boston University, has cleared many of the hurdles that have prevented others from making improved resonators that can match the performance of the quartz-based devices, Graziani says. The firm’s progress helped attract new capital from Commonwealth as well as its previous investors, Flybridge Capital Partners and General Catalyst Partners, both based in Massachusetts, and California’s Khosla Ventures. The previous three backers invested in the company’s $8 million Series A round of funding in 2008.

“There’s been venture dollars following into this space because there’s a big payoff if someone can finally come up with a very competitive technology versus quartz crystal,” Graziani says. “There have been several other players before us that have attracted significant venture dollars, but until now nobody’s been able to compete for the high end of the market.”

Sand 9 aims to begin production of its resonators for products such as GPS receivers, mobile phones, and wireless routers later this year, Graziani says. The company’s plan, he says, is to reach profitability without needing to raise more venture capital. Talk of profits is likely music to the ears of the firm’s board, which now includes Stephen McCormack, a general partner at Commonwealth Capital.

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This week gadget reviewers got their first hands-on look at Microsoft’s much-discussed Kin One and Kin Two phones, which are designed from the ground up to support young hipsters’ social media and content sharing habits. So far, the pundits are raving about the phones’ novel operating system and the cloud-based “Studio” feature, a flashy private website where all of a Kin user’s photos, videos, text messages, voicemails, news feeds, and contacts are collected and displayed. They’re mostly panning the hardware itself, as well as the prices on the Verizon data plans needed to make the phones useful.

But whether or not the Kin phones have what it takes to win over today’s teenage and twenty-something Facebook/Twitter/MySpace addicts, it seems likely that they’ll reignite interest in the idea of “lifelogging”—the attempt to create a comprehensive digital record of one’s daily experiences. Up to now, lifelogging enthusiasts have been forced to handle most of their data-capture and archiving tasks consciously and deliberately: if you came across a Web page you might want to consult later, you could manually bookmark it or save it to a service like Evernote or iCyte; if you wanted to share or store a photo you snapped, you could put it on Flickr or Photobucket or Tweetphoto.

The Kin phones’ big redeeming feature, according to the reviewers, is that this sort of stuff all happens behind the scenes, automatically. Within five minutes of snapping a photo on a Kin phone, for example, the picture is wirelessly transmitted to Microsoft’s servers and added to your Studio, where it stays forever, adding to a running timeline of your life. “The implications here are huge: This is how cloud stuff is supposed to work,” writes Gizmodo’s John Herrman.

The Kin phones offer a taste of what may be coming sooner than anyone expected: a world full of cheap, portable sensing devices that document every interaction, every experience, and every perception we have, continuously uploading the information to vast server farms in the sky where the cost of storage is only a tad above zero. As it happens, this is exactly the world portrayed in Total Recall: How the E-Memory Revolution Will Change Everything, a 2009 book by Microsoft researchers Gordon Bell and Jim Gemmell. But even Bell— who began perhaps the world’s most ambitious lifelogging project back in 1998—might be surprised by how quickly his vision is growing into reality.

Soon, Bell and Gemmell wrote last year, everyone will be able to keep a digital diary recording everything about their lives that’s recordable:

If you choose, everything you see can be automatically photographed and spirited away into your personal image library with your e-memory. Everything you hear can be saved as digital audio files. Software can allow you to scan your pictures for writing and your audio files for words to come up with searchable text transcripts of your life. If you choose, you can save every e-mail you send and receive and every Web page you visit. You can record your location and path through the world. You can record every rise and dip in your heart rate, body temperature, bloodsugar, anxiety, arousal, and alertness, and log them into your personal health file.

All that will be needed to achieve this vision of “total recall,” Bell and Gemmell wrote, is an array of cheap, wearable hardware—”unobtrusive cameras, microphones, location trackers and other sensing devices that can be worn in shirt buttons, pendants, tie clips, lapel pins, brooches, watchbands, bracelet beads, hat brims, eyeglass frames, and earrings” or even implanted inside the body. Bell, who helped design Digital Equipment Corporation’s giant PDP and VAX computers in the 1960s and 1970s, is himself a walking laboratory for … Next Page »

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