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Flixster Reels In $12.5 Million

Red Herring Staff — Mon, 08 Feb 2010 15:00:57 GMT

Flixster, a movie listings and ratings startup, has lined up $12.5 million in new funding from investors, according to regulatory documents.

San Francisco-based Flixster's funding comes after the company last month agreed to acquire movie reviews company Rotten Tomatoes from Rupert Murdoch's News Corp for an undisclosed sum.

The third-round cash injection follows a $5 million round in 2008 and a $2 million round from Lightspeed Venture Partners in 2007.

Founded in 2005, Flixster is a popular application among Facebook users as well as on Apple's iPhone and also has an apps presence on Android-based mobile phones, Palm Pre, and BlackBerry devices. Flixster's mobile application lets people find showtimes near their location on GPS phones, check reviews from Rotten Tomatoes and other sources, watch movie trailers, and buy tickets via Movietickets.com.

The Flixster funding, disclosed Monday in U.S. Securities and Exchange Commission documents, did not cite specific venture investors.

Factual: $1 Million From Angels

Red Herring Staff — Thu, 04 Feb 2010 15:51:20 GMT

Factual, a developer of a database of facts, on Wednesday attracted $1 million in angel funding from a who's who of technology investors including Internet browser pioneer Marc Andreessen.

Los Angeles-based Factual is assembling an open database of information to be used by developers in building software applications.

"What we see is the new wave is that there is really a way for factual data to be accessible," founder Gil Elbaz said. "We built a platform that helps the community have good, fresh data, and we have all the tools that make that data available."

Mr. Elbaz, who previously co-founded Applied Semantics (now AdSense), acquired by Google in 2003, courted no shortage of marquee angel investors.

Besides funding from the Andreessen Horowitz fund, investors included Index Ventures partner Danny Rimer, Esther Dyson, Idealab Chairman Bill Gross, former MySQL CEO Mårten Mickos, About.com founder Scott Kurnit, Miramar Venture Partners, Demand Media CEO Richard Rosenblatt, Gerson Lehrman Group founder Thomas Lehrman, Rustic Canyon Ventures founder Tom Unterman, the Founder Collective, Gunderson Dettmer, as well as Lee and June Stein.

What Factual hopes to do is become the de facto database for all forms of data that can be built into applications for the Internet, computers, and such mobile devices as iPhones and iPads. The startup's main audience is those developers that need certain forms of information to feed into their applications.

Formed in October 2009, Factual is planning to use the funding to build up its nascent idea. By year's end, the company may be prepared to seek institutional investors as the idea further develops, according to Mr. Elbaz. At this point, the company is still exploring different revenue models and hasn't decided which direction to go.

If Factual's idea seems new, it's not entirely. San Francisco-based Metaweb has operated an open database of information, dubbed Freebase, since March 2007. Metaweb has landed $57 million in two rounds of funding since 2006. Factual's founder views Metaweb's funding as an endorsement of the niche and said that the two companies appear to be headed in different directions, but he noted there are opportunities to benefit from each other's data gathering.

"It's very much a world of coopetition," Mr. Elbaz said.

BrightRoll Scores $10 Million

Red Herring Staff — Wed, 03 Feb 2010 16:01:16 GMT

BrightRoll, which claims to be the No. 1 video advertising network, on Wednesday said it has bagged $10 million in funding.

San Francisco, California, BrightRoll attracted the third round of funding from Scale Venture Partners, boosting the startup's total funding to $16 million.

“The online video ad market will grow to billions of dollars over the next few years by disrupting the $70 billion television ad market,” said Rob Theis, managing director at Scale Venture Partners

Previous investors True Ventures, Adams Street Capital, and KPG Ventures also took part in the funding round

Formed in 2006, BrightRoll says the video advertising network helps agencies run video ad campaigns for brands. The company competes against video site Hulu, which BrightRoll on Wednesday said it passed in unique viewers per month, citing Quantcast data.

Glam Media Attracts $50 Million

Red Herring Staff — Wed, 03 Feb 2010 15:05:51 GMT

Glam Media, a publishing network that boasts No. 1 position among women worldwide, on Tuesday announced $50 million in private equity funding.

The Brisbane, California, startup plans to use the financing to expand into new markets around the world, launch new channels, and buy companies to build its brand.

“In a short 5 years since launch, Glam Media has become a ‘must-buy’ for the world’s leading brand advertisers,” said Samir Arora, chairman and CEO of Glam Media, in a statement.

The fifth round of funding was led by Aeris Capital and had participation from Burda Digital Holding and Mizuho Capital. The funding round brings Glam Media's total cash raised to $130 million.

Under the deal, Marcel Reichart, who serves as managing director at DLD Ventures, an investment arm of Burda Digital Holding, will join Glam Media's board of directors, the company said.

“Glam Media has successfully demonstrated a highly scalable content and premium ad platform, which delivers value and innovation to global brand advertisers and publishers,” Mr. Reichart said in the statement.

Glam Media claims a content network that spans over 1,400 publishers. The startup said sales have shot up 300 percent in the past two years and that it reported break-even net income for the fourth quarter of 2009.

The company in October 2008 launched Brash.com, an online men's lifestyle network the company claims is the leading such destination.

AT&T Bolsters Network

Lalee Sadighi — Fri, 29 Jan 2010 11:34:35 GMT

AT&T on Thursday's earnings call answered critics concerns about its over-taxed network, which has come under fire in densely populated San Francisco and New York City, saying it plans to bolster its coverage.

Dallas, Texas, AT&T has been long criticized by smart phone users for its low-bandwidth capacity and the high number of dropped calls, especially in such metropolitan areas as New York City and San Francisco, where use of the iPhone and other smart phones is heavy.

AT&T said it expects improvements in the Bay Area and New York City in the coming months as it deals with a growth spurt in which 3.1 million iPhones were activated in the fourth quarter.

That comes amid speculation that AT&T would lose its exclusive partnership with Apple for the iPhone--which didn't happen for now. Instead Apple further extended its AT&T deal, locking the carrier into new data plan agreements for the iPad.

AT&T reported on the earnings call it now has twice as many smart phone users as its nearest competitor, Verizon, and that the company has seen a 5,000 percent spike in broadband data consumption since introducing the iPhone. The explosive growth in data demand was both unprecedented and unexpected, and explains some of the problems the AT&T network has faced.

The company said it erected close to 2,000 new cell sites in 2009 and has aggressive plans for 2010, including investing over $2 billion to expand and improve the broadband data network. It plans to deploy fiber-optic backhaul, which will increase 3G data speeds even further, as well as focusing on boosting data capacity in troubled areas like New York City and San Francisco.

Elevation Gives Yelp $100M Feedback

Lalee Sadighi — Thu, 28 Jan 2010 13:41:31 GMT

A month after Yelp, the popular online recommendation site, reportedly walked away from an acquisition bid by Google, private equity firm Elevation Partners said Wednesday it plans to invest up to $100 million in the company.

The investment firm co-founded by singer-musician-philanthropist Bono said it has agreed to make a $25 million investment in the San Francisco, California, startup through the purchase of Series E preferred stock

And Elevation plans to increase the total investment to as much as $100 million by buying shares from Yelp employees and other shareholders.

The investment would give the firm a minority stake in Yelp, said Marc Bodnick, a managing director and co-founder, in a statement.

“We have been able to grow and scale our business quickly, even in the tough economic environment of the last year — a clear indicator that we’ve only begun to realize the potential of local search,” said Jeremy Stoppelman, Yelp chief executive officer and co-founder.

Yelp, founded in 2004, said traffic to its site increased to 26 million visitors in December. The site has more than 9 million user-generated reviews of restaurants, shops, and services.

According to published reports, Google had been negotiating to buy Yelp in a deal worth at least $500 million. But the deal wasn't finalized.

The privately held Yelp had previously raised $31 million in funding and was valued around $223 million, according to a report posted on SharesPost.com.

Yelp plans to use the additional funding to deepen its market leadership position throughout the US, accelerate growth in Canada and throughout Western Europe,

Elevation Partners is a $1.9 billion private equity firm with investments in companies such as Palm. Co-founder Fred Anderson is a former CFO of Apple.

Apple's iPad: Kindle Killer?

Lalee Sadighi — Wed, 27 Jan 2010 15:09:35 GMT

Now that details of the iPad, Apple’s latest gizmo, are finally out, industry watchers are wondering how the new tablet will affect Amazon’s leading e-reader device, the Kindle.

Naming the Kindle specifically, Apple’s celebrity CEO, Steve Jobs, said the iPad would be better for reading books.

"We view the device as a threat to Amazon's Kindle and other e-book systems which lack the advanced computing capabilities of the tablet," wrote Shannon Cross, of Cross Research, in a note to clients earlier this week.

The iPad, which is to be released in April and looks like an oversized iTouch, will feature a 9.7-inch touch screen that works like a large version of the company's popular iPhone.

Similarities between the latest member of the Apple family and its older mobile siblings are many: Users can play music, watch videos, and surf the Internet, as well as send e-mails and run other office applications.

But the iPad is also tapping into new areas with online features such as the iBookstore, which allows users to purchase and download books to the device--much like the functional ease of its iTunes store.

"Amazon has done a great job of pioneering this technology," said Mr. Jobs, referring to the Kindle. "We're gonna stand on their shoulders and go farther."

The iPad will start at $499 for a Wi-Fi-only device with 16GB of memory. The same device with built-in 3G hardware, connection available through AT&T, will cost $529, with users having to buy a data plan that costs $15-$30 per month. A 32GB model will cost $599 and $699 will buy a 64GB version for the non-3G models.

The Amazon Kindle, by contrast, starts at $259 for a version with a 6-inch screen and full wireless connectivity included.

Also, the iPad and Kindle work on different models. While Apple is using the open ePub format, the Kindle's format is proprietary. Essentially, with the open ePub format people with requisite coding knowledge can make an ePub version of their own book.

Five of the six major publishing houses--Penguin, Harper-Collins, Simon & Schuster, Macmillan, and Hachette Book Group--have signed on to the iBookstore, but Random House, the one notable absent, happens to be the biggest book publisher in the world. That means that major titles may be missing from Apple's e-book store—at least for now.

Another notable difference, the iBooks will allow readers to flip through pages and supports pictures, video, and other graphics while the Kindle is static.

There is more. While the iPad has a beautiful, colorful display, the Kindle offers an ugly, practical screen. The iPad is obviously more appealing, but it comes with a price: battery life. The showy iPad boasts 10 hours of battery life, according to Mr. Jobs, whose claims have yet to be seen.

Frank's Back

Red Herring Staff — Wed, 27 Jan 2010 11:32:41 GMT

Frank Quattrone, the former investment banking star sidelined in a four-year fight over obstruction of justice charges, returns to the tech IPO bandwagon with his firm Qatalyst Partners serving as financial advisor to filer QuinStreet.

Foster City, California, QuinStreet on Tuesday priced 10 million shares at a $17 to $19 range, according to U.S. Securities and Exchange Commission document, citing Mr. Quattrone's Qatalyst as the company's financial advisor.

Mr. Quattrone -- who took public Netscape, Amazon.com, and Cisco, among others -- was the IPO deal maker at Credit Suisse during the go-go era Internet boom of the 1990s.

The former Internet investment star, Mr. Quattrone returns to the stage at time when the venture industry has lacked the boutique bank expertise of year's past to help entrepreneurs navigate the public markets. The smaller banks mostly went away after the dot-com crash as the industry steered toward larger deals with higher management fees and markets that were supportive of M&A activity.

QuinStreet is expected to go public the week of February 8, according to IPO watcher Renaissance Capital.

The startup promises clients improved results from search engines, serving qualified leads, or targeted clicks to customers. The company's financials make it a strong contender to go public. For fiscal 2009, it reported a $17.3 million profit and reported profits ranging $12.9 million to $15.6 million a year dating back to 2005.

Founded in 1999, QuinStreet has raised about $60 million in venture capital from the likes of Granite Global Ventures, Split Rock Partners, Sutter Hill Ventures, Catteron Partners, Partech International, Focus Ventures, Rosewood Capital, Charter Growth Capital, VSP Capital, J&W Seligman, and Stanford University.

Meet the iPad

Lalee Sadighi — Wed, 27 Jan 2010 11:21:23 GMT

After months of speculative buzz, Apple on Wednesday announced its much–anticipated tablet device, the iPad, in front of a packed audience at the Yerba Buena Center for the Arts in San Francisco.

The iPad, which looks like an oversized iTouch, will allow people to take their movies, TV shows, music, games, and books with them on the go.

"We want to kick off 2010 with a truly revolutionary and magical product," CEO Steve Jobs told the audience. "All of us use laptops and smart phones now. "It's time, he said, for a third category of device."

The new touchscreen tablet computer is a cross between a laptop and a smart phone and its starting price is $499.

Mr. Jobs said the device would have a wide range of uses, from emailing and web browsing to video viewing and reading e-books.

“If there’s going to be a third category it has to be better at these tasks, otherwise it has no reason for being,” Mr. Jobs said.

Anticipation for the iPad was particularly high given Apple’s huge success with the iPhone, which has caused a revolution in the smartphone industry and left big companies like Nokia and Microsoft struggling to catch up.

Mr. Job, who was still looking thin after a fight with cancer that included a liver transplant, triumphantly challenged the world’s biggest mobile technology companies, declaring that Apple’s total revenue from mobile gear – including its iPod and iPhone lines – now exceeded that of world mobile leader Nokia.

“We’re a mobile company. That’s what we do,” he said.

Yahoo Earnings: Ad Downturn Done

Lalee Sadighi — Tue, 26 Jan 2010 17:45:55 GMT

Just a year after Carol Bartz came aboard Yahoo as CEO, the company on Tuesday reported fourth-quarter earnings that met analyst expectations and buoyed the company’s stock 3.75 percent in after-hours trading.

Sunnyvale, California, Yahoo also reported it expects its first quarter will show the first signs of advertising growth in a year and a half. The troubled search pioneer's next-quarter advertising guidance is significant because it suggests further evidence that an end to the ad industry downturn is near.

“Overall, things seem to be returning to a more normal state in the online ad business,” said a statement from Ms. Bartz, who took over as CEO last January and implemented a companywide restructuring. “These results are not just the result of an improving economic climate. These are the direct result of hard work that culminated in Q4 and will continue into 2010.”

Yahoo reported fourth-quarter revenue of $1.73 billion, down 4 percent from a year ago. Net income matched analyst’s expectations on $153 million, or 11 cents per share, up from a $303 million loss, or 22 cents per share, in the fourth quarter of 2008.

Display advertising revenue grew 26 percent in the fourth quarter compared with the third quarter and was up 16 percent from the same period in 2008. This was a particularly important metric for Yahoo, considering that its business revolves around display advertising such as online banners etc.

“Our business has positive momentum and we feel good as we head into 2010,” Ms. Bartz said.

This earnings results mark the company’s best performance in over a year, or since Ms. Bartz took on the chief position at Yahoo, taking over for struggling co-founder Jerry Yang.

Last week, search king Google also signaled the Internet ad market was gaining strength when it announced its fourth-quarter revenue rose 17 percent.

Shares of Yahoo rose 3.75 percent in after-hours trading, or $0.60 to $16.59.

QuinStreet Prices IPO

Red Herring Staff — Tue, 26 Jan 2010 14:37:42 GMT

QuinStreet on Tuesday set the pricing terms of its planned initial public offering, a move that would lower the Internet marketing startup's cash raised to as much as $165 million.

Foster City, California, QuinStreet plans to offer 10 million shares at between $17 and $19 apiece. In the company's original S-1 filing it had planned to raise $250 million.

The company isn't hurting for cash -- it's been profitable for years. For fiscal 2009, it reported a $17.3 million profit and reported profits ranging $12.9 million to $15.6 million a year dating back to 2005.

"Clients pay us for the actual opt-in actions by prospects or customers that result from our marketing activities on their behalf, versus traditional impression-based advertising and marketing models in which an advertiser pays for more general exposure to an advertisement," QuinStreet said in the U.S. Securities and Exchange Commission filing.

QuinStreet offers clients improved results from search engines, promising potential customers to convert into qualified leads or clicks for them.

QuinStreet plans to use the cash raised in the offering toward working capital and general corporate purposes.

The company plans to trade on the Nasdaq under the ticker symbol "QNST."

iPhone Coming to All Carriers?

Lalee Sadighi — Mon, 25 Jan 2010 15:40:06 GMT

Amid the flurry of speculation surrounding Apple’s expected release of a tablet device on Wednesday at an event in San Francisco, rumors are starting to spread that Steve Jobs will also use the stage to announce the end of AT&T's two-and-a-half year exclusive run on the iPhone.

Cupertino, California, Apple is expected to release the iPhone to all U.S. wireless carriers in the next 18 months, doubling or tripling the number of devices sold, said Tim Horan, a telecommunications analyst at Oppenheimer & Co. in a note to clients.

T-Mobile will get the phone this summer, followed by Verizon Wireless and Sprint Nextel in the fall, Mr. Horan wrote on Monday.

AT&T, which has been the exclusive carrier of the iPhone since its June 2007 launch, has been much criticized for its poor data infrastructure and the number of calls dropped.

“We believe AT&T’s iPhone exclusivity arrangement with Apple will be expiring by mid-2010,” Mr. Horan wrote. “For wireless carriers, customers are demanding the device and they need to remain competitive.”

But the news that everyone is waiting for is Apple’s widely expected release of a new tablet-like device, dubbed the iSlate by industry watchers.

"The new products we are planning to release this year are very strong, starting this week with a major new product that we're really excited about," Apple CEO Steve Jobs said in a statement.

The Mac maker is scheduled to hold an event on Wednesday where it may launch the tablet device, which is said to be a handheld device with a touch screen for users to view Internet content, play games, and watch television.

Apple on Monday also reported strong first-quarter 2010 sales and profit that beat Wall Street expectations on demand for iPhones and Macs.

The company reported net income of $3.38 billion on $15.68 billion in revenue for the quarter ended December 26, compared with net income of $2.26 billion on reveneu of $11.88 billion in the first quarter of 2009. Apple reported earnings per share for the quarter of $3.67, beating estimates of $2.09 from analysts polled by Thomson Reuters.

Apple shipped 8.7 million iPhones in the quarter, more than doubling the first quarter a year ago and 3.36 million Macintosh computers during the quarter, a 33 percent increase over the year-ago quarter. However, iPod shipments declined by 8 percent during the quarter to 21 million units.

Motricity Files for $250M IPO

Red Herring Staff — Mon, 25 Jan 2010 13:36:35 GMT

Motricity on Friday filed with the U.S. Securities and Exchange Commission its intent to go public in a bid to raise $250 million

Bellevue, Washington, Motricity helps wireless carriers deliver mobile data and billing services, among others. Its U.S. customers include Verizon Wireless, AT&T, Sprint, T-Mobile USA, and TracFone Wireless.

U.S. mobile subscribers are forecast to grow to 301 million in 2012 from 269 million in 2008, and worldwide subscribers are expected to grow to 5.13 billion in 2012 from 3.99 billion in 2008, according to market researcher The Yankee Group.

Motricity reported a $10.8 million net loss in 2009 and lost $68 million in 2008

The startup plans to trade on the Nasdaq under the ticker symbol “MOTR.”

Goldman Sachs and JP Morgan are joint book runners in the offering that counts Barclays Capital, Deutsche Bank Securities, and RBC Capital Markets as joint lead managers and Baird and Pacific Crest Securities as co-managers.

Better Place Juices Up $350M

Red Herring Staff — Mon, 25 Jan 2010 12:54:08 GMT

Better Place on Monday scored $350 million in funding to boost development of its global network of battery services for all-electric vehicles.

Palo, Alto, California-based Better Place had previously raised $200 million in October 2007. The new round was at a $1.25 billion post-money valuation.

“We believe the switch from internal combustion engine vehicles to electric vehicles will create future growth opportunities in the auto and utility industries, and we are delighted to take the opportunity of investing in Better Place to put HSBC at the heart of these developments,” said Stuart Gulliver, executive director of HSBC Holdings, in a statement.

Funding was led by HSBC Group and was joined by Morgan Stanley Investment Management, Lazard Asset Management, Israel Corp, VantagePoint Venture Parnters, Ofer Hi-Tech Holdings, Morgan Stanley Principal Invesments, and Maniv Energy Capital.

Better Place is working on a network of swappable batteries and services for all-electric cars. The company plans to plans to have a service network in place for Renault-built electric cars by the end of 2011 in Israel and Denmark.

Under the deal, Kevin Adeson, HSBC’s chief of global capital financing, will join the company’s board of directors. HSBC’s investment gives it a 10 percent ownership position.

Better Place is not the only upstart focused on battery-swapping stations and services. China’s GreenTech Energy Tech, a startup so far bankrolled mostly by its founder, has similar ambitions for cities across China. Green Tech Energy is looking at partnerships with gas stations to distribute charged batteries for cars that come in and wants to develop charge stations that can provide a quick recharge in about 20 minutes.

GreenTech Energy Tech is a Red Herring Global 100 winner.

Aircell Bags $176 Million

Red Herring Staff — Fri, 22 Jan 2010 13:04:11 GMT

Aircell on Friday said it scored a whopping $176 million to expand its Gogo Internet services across airlines.

Itasca, Illinois, Aircell provides in-flight Wi-Fi to nine airlines and offers services to 700 commerical aircraft.

“We are proud to have the support of our existing investors and to be able to add new investors in the midst of the challenging global financing market,” Aircell CEO Ron LeMay said in a statement.

Aircell declined to detail its new investors in the funding round.

The company is the only one with approval from the FCC and FAA to offer cellular frequencies for in-flight communications.