Seattle-based Delve Networks won the “best presenting company” award from the attendees of the first annual Angel Capital Expo, hosted by Keiretsu Forum Northwest on Tuesday. More than a dozen companies across different fields presented to investors, including Humanity Interactive, Iverson Genetic Diagnostics, and Exro Technologies. Delve Networks started in 2006 (formerly called Pluggd) and makes video hosting and searching software.

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Verivue, the Westford, MA-based maker of multimedia distribution switches for cable and telecom operators, has raised $20.1 million in an equity offering, according to regulatory forms filed yesterday. PE Hub, citing a Venture Wire report, says new investor Sigma Partners took the lead in the round. Verivue raised a $40 million Series B round in March of this year, on the heels of a $25 million Series A round in 2007.

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DivX (NASDAQ: DIVX), the San Diego video codec developer, says it has settled a lawsuit with Yahoo (NASDAQ: YHOO) over an advertising agreement that triggered some turmoil at DivX last fall. Terms were not disclosed, but DivX says the settlement will boost its third-quarter operating income by 29 cents per share. With about 32.8 million shares outstanding, that suggests a settlement of $9.5 million. DivX sued Yahoo in November, alleging the Internet search engine company had backed out of a two-year deal on toolbar distribution reached in September 2007.

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[Update 12:30 a.m. 6/30/09: We've revised this story after speaking with a Yahoo official.]

A report Monday in TechCrunch asserting that Yahoo is killing off its Cambridge, MA-based video hosting company Maven Networks just 16 months after acquiring it for $160 million is inaccurate in some respects, but accurate in others, according to the company.

A spokesman at the troubled Internet portal company, reached by phone late Monday, confirmed—as TechCrunch reported—that the company plans to shut down the service introduced by Maven under which it publishes online videos for third parties such as Fox News. That decision is part of a reprioritization effort that “will allow us to focus our resources on the continued improvement of our core video offerings,” the company said in a statement that the spokesman shared with Xconomy by e-mail.

However, the technologies Yahoo acquired when it purchased Maven aren’t going away—in fact, they’re integral to the company’s new video player and its video ad server technology. And contrary to the TechCrunch report, the Maven division has not been singled out for mass layoffs. While members of Yahoo’s video divisions have been among those affected by several waves of staff reductions at Yahoo—including a recent 5 percent across-the-board layoff—talent from Maven continues to lead video initiatives across the company.

The TechCrunch report, citing unnamed tipsters, said that “Yahoo has effectively decided to shelve Maven, firing most of its employees in a move packaged as a restructuring.” Xconomy relayed that report—which now appears to have been unjustified—while attempting to contact Yahoo for confirmation and clarification.

While the report of mass layoffs may have been wrong, however, recent months have brought many signs of downsizing and attrition across Yahoo’s video operations, including Maven. Former CEO Hilmi Ozguc, who founded Maven in 2002, left Yahoo last September, six months after the acquisition. Internet video news site NewTeeVee reported in early May that “many members of the [Yahoo Video] team have quit or been laid off amidst a lack of strategic direction,” and reported later that month that the head of company’s video platform division was leaving. The site even asserted that Yahoo planned to phase out Maven altogether—not an outlandish prediction, given that other Yahoo video services Yahoo Live, a live video streaming service, and JumpCut, an online video editing tool, have already been shut down.

But while Yahoo has been scaling back its investment in some areas of online video, it says it has been increasing them in others. Video initiatives “remain a priority for Yahoo, both for its consumer and advertising experiences,” the company says.

The full statement we received from Yahoo is as follows:

Since acquiring Maven Networks in 2008, Maven has played an important role in our video strategy, providing essential talent and core technology that has helped Yahoo! to enhance its consumer and advertising offerings. Maven technology is used in the Yahoo video player, as well as in the Yahoo Video Advertising Platform that is being used to serve both on- and off- network advertising for Yahoo! partners.

While video initiatives remain a priority for Yahoo!, both for its consumer and advertising experiences, we are increasing investment in some areas while scaling back in others. After careful consideration, Yahoo! is planning to wind down its Maven Networks customer base. This decision will allow us to focus our resources on the continued improvement of our core video offerings, such as enhancing the consumer video experience on Yahoo!.

Since Q4 2008, we have closed or announced our intention to close, nearly twenty Yahoo! services– such as Yahoo! 360, GeoCities, My Web and Yahoo! Briefcase. We continue to evaluate our portfolio of products and services on a regular basis, and plan to share details of further changes with people who use our products in the months ahead.

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Michael Kolowich—the founder of ZDNet, former president of AT&T New Media, and former chief marketing officer at Lotus—is among the founders of Channel One Marketing, a social media marketing firm that launched today in Concord, MA. Channel One, which is allied with video production studio DigiNovations, also based in Concord, says it specializes in promoting clients’ online videos through online venues such as Twitter, Facebook, YouTube, podcasts, and search engines.

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Seattle-based RealNetworks (NASDAQ: RNWK) announced today the first new version of its RealPlayer media software since May 2007. This beta version of RealPlayer SP lets you download video in any format and quickly put it on your mobile phone or portable media player—whether you have an iPhone, iPod, BlackBerry Storm, Palm Pre, or any of the latest devices. It also lets you share videos with friends on social websites like Facebook and Twitter. Both of these are new capabilities for Real. The software is now available for free download.

It’s a major release, and a big deal for the company. When most people think of RealNetworks, they think of media delivery software, multimedia formats, music, and gaming services (and also its recent dispute with Hollywood studios over digital rights management with its RealDVD product)—not necessarily mobile devices and social networks.

That could be changing. Although its push into mobile and social media is not new, today’s product launch seems to fit within Real’s strategic belief that mobile is increasingly central to how people enjoy digital entertainment. (The division that houses Real’s mobile business, Technology Products & Solutions, accounts for 34 percent of the company’s revenues, and that percentage has been growing.) The launch is also central to turning around Real’s media software and services business, which has been flat or declining in recent years.

The field of online video formatting and converting is crowded, of course. But what seems to separate Real’s software from the competition, at least initially, is how fast and easy it is to use. With just a couple of clicks, you can grab videos from YouTube, say, and put them on your phone automatically without worrying about what format they’re in and whether it matches your device’s settings. “This is a product for everyone,” says John Schussler, senior program manager at RealNetworks. “We make the experience really, really simple.”

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Portland, OR-based Elemental Technologies, a video processing startup, announced today the beta release of its server product, which uses off-the-shelf graphics processing units and advanced software. Elemental Server is meant to help studios, online video platforms, and large Internet video publishers deliver huge volumes of video to consumers smoothly, efficiently, and cheaply. Beta customers include Adobe and Cambridge, MA-based Brightcove. Co-founded in 2006 by CEO Sam Blackman, Elemental has developed software to do efficient encoding and transcoding of video using parallel-processing graphics chips.

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“There are a quarter of a billion websites on Planet Earth, and most of them will want video.” Now there’s a market to put hair on your chest—the stat comes courtesy of Alex Castro, the chief executive of Seattle startup Delve Networks.

I called up Castro last week, in part to ask him about his company’s recent financing. Wouldn’t you know it, he didn’t want to talk about that at all, since the round is ongoing. So instead we talked about some more interesting things, like the future of online video, Delve’s semi-recent strategy shift, and what he learned from working at Amazon, as compared to Microsoft, back in the day.

Castro got his start in the tech world when he did his undergraduate and master’s degrees in computer science at Cornell University, focusing on distributed computing. That’s where he first met Werner Vogels, the Cornell computer scientist who would become Amazon’s chief technology officer (and who would later hire him). Castro worked for Microsoft between 1999-2004 as a group program manager; he started the customer relationship management team there. He left to join Amazon, where he was a senior manager in Amazon Web Services until he quit in 2006 to start his own company.

That company was originally called Pluggd, and it focused on audio podcast search. By 2007, the startup was already making the switch to online video, but it needed some more oomph. “We weren’t seeing great traffic in audio and video. iTunes and YouTube kind of sucked the oxygen out for a lot of folks,” Castro says. “After a while, with no real prospects for getting a lot bigger, we started listening to our customers.” By mid-to-late 2007, he says, “we realized what we needed to do.”

The first step was to fully grasp the market opportunity for online video. “Video is not just about YouTube and Hulu, or media and entertainment. It will be pervasive, it will be the dominant media on the Internet in 10 years,” Castro says. Just as websites started out being used mainly by the media and academia—only to explode in popularity a few years later—so will video become the main online channel for consumers and businesses alike, he predicts. “They’re realizing video is part of the Internet, not just this thing that exists on YouTube. Back then, people thought the Internet was AOL. But the Internet was bigger than that.”

Last June, his company relaunched itself as Delve Networks, focusing on online video hosting and “search inside” video technology. It’s actually based on audio search (speech recognition), but unlike …Next Page »

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At a time when Internet video is shifting increasingly to high-resolution images and towards professional-quality production, Sorenson Media is going through a transition of its own. The private online video codec company that was founded in Salt Lake City, UT, is joining the move to high-quality delivery with the Sorenson 360 video-publishing platform for serious videographers and media companies. Under the leadership of Peter Csathy, who was named CEO ten weeks ago, Sorenson also has been moving more of its operations from Utah to the San Diego area, where Csathy lives.

Sorenson 360 is a video delivery network where users can easily send very large video files with their browser to a net site. With today’s introduction, Csathy says Sorenson is providing an innovation that video professionals have missed and wanted. “Our mission is to bring video with the highest quality easily to the world to maximize the Internet video opportunity,” says Csathy. “It’s a tremendous luxury that we don’t need to build from customer one. We are already well-positioned since the video-makers know and trust us.”

Since Csathy took the CEO’s job in March, he has established an executive, business operations, and sales/marketing hub with 20 employees in Carlsbad, CA, about 31 miles north of San Diego. “San Diego has really become an innovation capital in digital media. This is an exciting local story in times when other companies are laying off people,” says Csathy and Sorenson is still hiring for positions in Carlsbad.

The company was founded in 1995 by James Lee Sorenson, who continues to serve as president. He also is CEO of The Sorenson Group, a large-scale real estate developer and medical device developer in Utah. Sorenson Media now has approximately 30 employees in Utah.

There are general high expectations for full-screen broadband net videos. “The Internet video market place is just in the early innings. We haven’t seen anything yet,” says Csathy. The Internet, he believes, is moving towards highest-quality films, and he sees video consumption growing exponentially. “It’s not only user-generated content. There’s explosive growth in the professional content,” he says. Professionally produced, brand-hosted online video grew 24.3 percent in 2008 to a whopping 41.6 billion views. The top categories are music, news, and entertainment, i.e., kids.

Online video will account for over half of all Internet traffic in 2012, said Csathy. And the Internet will converge with television. “Crisp, vivid video is one of the most powerful tools for engaging people on the Internet today,” he says. Even Google’s YouTube users nowadays can upload High Definition videos up to 1GB and up to 10 minutes.

Sorenson Media has been around long enough to score with many of the big names of the computer industry: In 1998 Sorenson’s SV1 codec was licensed to Apple’s Quicktime 3 player; in 2002 its Squeeze encoder was the first codec included in Macromedia (now Adobe) Flash; and in 2005 YouTube chose Sorenson’s Spark for its video codec. Now over a billion videos on the Internet have been coded with Spark. Last month, San Diego’s chip giant Qualcomm announced a licensing deal with Spark, following similar deals that were struck by Verizon and Sony.

The new flagship product, Sorenson 360, represents a new area for the codec company. For a monthly subscription that starts at $99, Sorenson 360 enables video makers to publish high-resolution videos on web sites either in Flash or MPEG-4 in minutes. High-quality publishing has been something that only high-cost online publishing platforms have been able to do before this.

Csathy was previously CEO of the Internet video company SightSpeed (acquired by Logitech in late 2008), president and COO of digital music ‘jukebox’ MusicMatch (acquired by Yahoo in 2004), and COO of on-line news aggregator eNow (acquired by AOL-TimeWarner in 2006). Now he says Sorenson is in just the right place—because, as he puts it, “video is in our DNA.”

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Global Media Services, based in New York City, has announced it is merging with Seattle-based GridNetworks, an online video startup. Financial terms were not disclosed. The combined company will provide streaming and media services for personal computers, mobile devices, and TV. GridNetworks, founded in 2005, was backed by Comcast, Cisco, and Panorama Capital. News of the merger was previously reported by the Seattle Times, TechFlash, and BusinessOfVideo.com.

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ThePlatform, a Seattle-based online video firm, announced it has partnered with the Australian publisher News Digital Media to manage video across 50 sites, including The Australian, news.com.au, and Vogue.com.au. ThePlatform is an independent subsidiary of Comcast.

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Maybe it’s because everyone is trying to get their deals announced before the holidays, but it was a busy week in the Northwest, with plenty of activity in mobile software, online media, and medical devices.

—Bellevue, WA-based BlueKai, an Internet marketing firm, raised $10.5 million in Series B funding, led by Waltham, MA-based Battery Ventures. Existing investor Redpoint Ventures also contributed to the round. BlueKai is creating a marketplace for online consumer data.

—Luke reported that Seattle-based Uptake Medical, a maker of medical devices, raised $3 million to carry out a pair of clinical trials for a technique to treat emphysema and other deadly lung-obstructing diseases. The capital was raised from all of Uptake’s previous investors, including Prism VentureWorks, Onset Ventures, and WRF Capital.

—Seattle-based mobile startup Zumobi teamed up with outdoor retailer REI to release a free software application, called the REI Snow Report, for getting instant …Next Page »

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Portland, OR-based SplashCast, an online content-syndication startup, announced it has teamed up with video service Hulu to distribute TV shows and other content on Facebook and MySpace. SplashCast’s “social TV player” software will syndicate new episodes from Hulu directly to viewers’ social-network pages. Twenty shows are currently available, and the company says “dozens more” will be running this month. Founded in 2006, SplashCast has 10 million viewers a month.

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As an editor at a growing online resource called the Public Library of Science, UC San Diego Professor Philip Bourne is in an ideal position to see the disruptive changes that are remaking the $11 billion scientific publishing industry. As it has with other types of traditional publishing, the Internet is turning the staid-but-highly lucrative business of academic publishing on its head.

Of 1.35 million peer-reviewed articles published in 23,750 journals of science, technology, and medicine in 2006, two Finnish researchers recently estimated that 8.1 percent are now available online at no cost. They estimate another 11.3 percent can easily be found on authors’ Web sites and free repositories.

Bourne saw the emerging trend and recruited Leo Chalupa, a friend and colleague at UC Davis, to launch an online video project to help scientists make their research better-known. Bourne and Chalupa were initially unsure if the project they started last year was merely an interesting science project or a business. But they decided to form a startup company earlier this year around what they call SciVee. It is basically a YouTube for academic researchers.

As Bourne explains in this SciVee video, “What we’re really trying to do here is to further the dissemination of science.”

Bourne says his first idea was to essentially create “pubcasts,” which typically consist of a 15-minute video in which the author of a published and peer-reviewed article explains the research and highlights the key findings. Presentations can include slides, computer-generated animations, and other graphics.

“What Phil and Leo saw was the opportunity to add new capabilities …Next Page »

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Updated Nov. 6, 2:45 PST; See below for details about Veoh

San Diego’s Veoh, one of the top Web-based providers of video and TV programming, has laid off 20 people, or 18 percent of its 110-employee payroll.

The cutbacks, reported by PaidContent, TechCrunch, and others, apparently are intended to help the startup survive hard times expected in the months ahead.

Veoh aims to deliver full-screen, high-quality video over the Web, bypassing traditional broadcasting systems and regulatory restrictions. Investor Todd Dagres of Boston’s Spark Capital talked about his interest in Veoh in September with Xconomy’s Bob Buderi.

Veoh has about 60 employees at its San Diego headquarters, mostly in engineering and product development, spokeswoman Gaude Paez told me this afternoon. Another 25 work in business development and marketing in Los Angeles, mostly to interact with Hollywood studios, TV networks and other video developers. A handful of others work in New York and Chicago.

Veoh generates revenue by selling advertising throughout the videos it offers, and through conventional online advertisings, including banner and display ads. Paez says Veoh’s video content is free to its estimated 25 to 28 million users around the world.

“It’s very hard to predict how soft the advertising market may get,” the spokeswoman said. “It just makes more sense to make the tough decisions now rather than later.”

Last month, PaidContent reported that Veoh laid off employees and shut down its Russian office in St. Petersburg. Veoh described the cutback in Russia as a strategic decision rather than a financial one, saying it wanted to move its development staff to San Diego.

Veoh CEO Steve Mitang told TechCrunch this move is financial and reflects the new economic reality. The company insists it is still strong, financially. Veoh has raised $70 million from investors that include Goldman Sachs, Spark Capital, and Time Warner Investments, including $30 million last June from Intel Capital, Adobe Systems, and several prominent private investors.

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Updated Nov. 5, 4 pm PST: See below for details on funding

TelCentris, a new San Diego company, says it has released a beta version of its free consumer service called VoxOx, which combines Voice-over-Internet telephony and other types of communications into a single screen on a computer desktop. The company says its universal communicator service is the first in a coming generation of consumer software products that combine voice, video, instant messaging, text, e-mail, fax, and social networks into a single screen on a desktop.

While competitors such as Skype offer VoIP and rival Digsby aggregates messaging, social networking and e-mail onto a single screen, the company says that VoxOx combines all these features into a single product—with an iPhone-like graphical user interface. The name VoxOx is a play on “voice over X,” meaning the system can send voice over any type of network.

TelCentris says it has targeted communications-overloaded GenXers and “Millenials,” those born between 1980 and 2000. That’s a different tack than rivals that have been trying to get corporate customers to commit to their hardware and software for Voice-over-Internet telephony. It might be an easier sell, but Voice-over-Internet telephony is rapidly becoming a commodity, meaning the competition is getting fiercer and players are looking for ways to break out of the pack.

TelCentris was founded by CEO Bryan Hertz, his brother, Kevin, who is chief technical officer, and father Bob, chief information officer. The CFO is Michael Faught, who has 25 years experience in finance, management, and technology commercialization, according to the company’s Web site.

A spokeswoman for TelCentris says the founders bankrolled the company themselves, with some additional angel investment. She added that TelCentris has been generating revenue by powering small telephone companies with its Unified Communications Service Delivery Platform, as well as providing Hosted PBX service to dozens of small-to-medium businesses.

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Brightcove, the Cambridge, MA-based Internet video publisher founded in 2004 by Boston-area serial entrepreneur Jeremy Allaire, today introduced a thoroughly overhauled version of its video hosting platform. The company says the new service, called Brightcove 3, is designed to help big media companies get more creative about the way they deploy video on their websites, while also helping smaller Web publishers get into the video publishing business in the first place.

Previous versions of Brightcove’s platform—which is used on the websites of large media organizations such as Boston.com and Marketwatch—were complicated affairs. Customers who wanted to create customized video players to showcase their content, for example, had to hire experienced Flash designers to write the needed code. But at the core of Brightcove 3 is a new customizable player that can be modified using simple modules of HTML or third-party plugins.

Just as important for broad-based adoption, Brightcove has lowered the price of admission to its software-as-a-service platform. The lowest tier of its new three-tier pricing system will cost a typical customer less than $10,000 per year, according to Allaire.

“What we’re trying to do with Brightcove 3 is adapt it for educational institutions, marketing departments, and other mainstream users, whose needs are often different from a media company’s needs, and price it in a way that fits those needs,” says Allaire.

[Update 10/15/08: We've now published an extensive interview with Allaire, conducted earlier this month as the company was busy preparing for the Brightcove 3 launch.]

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