RIP Digg. Startups in Silicon Valley are like old generals. They don’t die anymore, buoyed on life-rafts of lingering venture capital and modest revenues. They just fade away, eventually purchased for assets that are a shadow of their former promise. It’s pretty clear that Digg is on that path. The company isn’t dead, but it’s been fading away for a while, and its soul is all but gone. I’m traveling in Indonesia, so the news will be old by the time you read this, but you’ll have to forgive another sentimental post. The entrepreneurs were the exact opposite of the kids today seduced by the promises of Y Combinator, easy cash of super angels and lure of TechCrunch headlines. And Digg was one of the first to prove you could take advantage of a decade of open source development to start a company for dirt cheap, one of the first to prove you didn’t have to be a technical genius to build a great product, and one of the first to prove a rabid community could make a site explode very, very quickly.
Sendoid: Finally, Sharing Big Files Isn’t A Huge Pain. When it comes to files, we love to share. No, we need to share. Thanks to the massive capacities of Gmail and other email services, it’s become remarkably easy to share files. Of course, most email services limit the size of the file you can share. Gmail’s, for example, is 25 megabytes. But if you want to share a larger file or multiple files — and even want a little privacy in doing so — you have to go elsewhere. As a result of these limitations, many peer-to-peer file-sharing services have popped up in an effort to fill the demand for transferring those hulking files you’ve got lying around. Unfortunately, most file transfer services tend not to be particularly user friendly. But even these services have size limits and haven’t really put all questions of security to rest. The in-browser sharing works by opening a 128-bit Advanced Encryption Standard (AES) encrypted pipe directly between the sending and receiving machines.
So how will Sendoid make money? The Onion: Facebook “Is Truly A Dream Come True For The CIA” (Video) Citi: Google’s YouTube Revenues Will Pass $1 Billion In 2012 (And So Could Local) With nearly $30 billion in annual revenues last year, Google needs to keep both dominating search and find new billion-dollar businesses fast. Google’s biggest opportunities beyond search are display advertising, video advertising (YouTube), mobile search, and local. And if it ever gets its act together on social, that could be a wild card. Last October, the company pointed out that its display advertising business (including YouTube) and mobile search was already bringing in an additional $3.5 billion in annualized gross revenues. Citi analyst Mark Mahaney breaks down some of Google’s opportunities for new billion-dollar businesses in a new research report he released this morning. In particular, he focuses on two of Google’s most promising growth opportunities: YouTube and local advertising.
According to his estimates, YouTube’s gross revenues hit $825 million in 2010, and will reach $1.3 billion in 2011 and $1.7 billion in 2012. AT&T takeover of T-Mobile: Winners, losers. AT&T and its investors would clearly be winners if the $39 billion proposed takeover of T-Mobile USA is approved by federal regulators. The deal would make AT&T the largest U.S. wireless carrier by far, with 130 million subscribers. But some other winners might come as a surprise: Apple is one, gaining quick access to T-Mobile's 34 million customers as potential buyers of iPads and iPhones. Enterprise customers of both AT&T and T-Mobile are also winners, several analysts said, because of the combined networks' expanded coverage in the U.S. and the opportunity to move to LTE networks faster in 95% of the U.S. As for losers, Sprint, which had been rumored for months to be poised to buy T-Mobile from Deustche Telekom, is most adversely affected by the deal.
Sprint has already registered concerns that consolidating the market from four major national carriers to three will limit customer choice. Winners Apple is a somewhat unexpected winner in the deal. 7 Tech Companies That Raised Venture Capital Today: Which Will Change the World? (Poll) Today's companies raising venture capital truly run the gamut of services and topics. We've got an app to enable college students to find the hottest party on campus, an online education option for graduate students, copywriters creating targeted ads with just the right words to get us clicking, a financial health site for women as well as several other intriguing ideas. Such a diverse lineup! Which company do you think will wind up changing our world the most? Make your opinion heard by voting in the poll below and find out about yesterday's winner, too.
Yesterday's Poll winner was Altobridge, a company that's bringing the mobile market to developing countries. Altobridge earned 59% of RWW readers' vote. Today's Companies: Pricelock, based in Redwood City, CA, raised $12 million in funding today. Spigit, provider of management software accessible via employee's phones and Facebook account, inked $10 million today. Which company do you think will change the world the most? Engineering vs. Liberal Arts: Who’s Right—Bill or Steve? When students asked what subjects they should major in to become a tech entrepreneur, I used to say engineering, mathematics, and science—because an education in these fields is the prerequisite for innovation, and because engineers make the best entrepreneurs.
That was several years ago. I realized how much my views have changed when the The New York Times asked me to write a piece for its “Room for Debate” forum this week. The paper wanted me to comment on the divergence of opinion between Bill Gates and Steve Jobs. In a speech before the National Governors Association on Feb 28, Gates had argued that we need to spend our limited education budget on disciplines that produce the most jobs.
He implied that we should reduce our investment in the liberal arts because liberal-arts degrees don’t correlate well with job creation. Here is what I wrote for The Times. But I need to acknowledge the difficult reality: that employment prospects are dim for liberal-arts majors. Another Netflix Content Idea: Saving Cancelled Cult Hits. Yesterday, I laid out why the new Netflix original content plan could be a game-changer in terms of television content and the ultimate disruption of cable. But it still all depends on if the show(s) they pick end up being hits. It appears that Netflix’s first bet, House of Cards, is just about as good of a bet as you could make — but it’s still no guarantee. Here’s an idea that could be much more of a guarantee: saving cult hits.
Each year, dozens of shows on network and cable television get cancelled. Most of these cancellations are for good reason. While shows that are called “cult hits” are often thought of as mainstream flops, the reality is that they still have millions of people who watch them. The perfect example of how this could work is probably the old Joss Whedon cult hit, Firefly. Firefly lasted only 11 episodes — not even one full season — in 2002 on Fox. A Netflix distribution model would be the right idea. Would the economics ultimately work out? I smell a comeback. Netflix Original Content Is Much More Than A Strategy Shift — It Could Shift An Industry.
Three years ago, if you had asked people to choose between cable television and Netflix, the vast majority would have laughed at you. A DVD-by-mail service versus thousands of pieces of content always at your fingertips? No one is laughing anymore. Netflix has confirmed that they intend to pay for House of Cards a new show being produced by David Fincher (yes, he of Fight Club, The Social Network, etc) and starring Kevin Spacey (yes, he of The Usual Suspects, American Beauty, etc).
Netflix is not paying for the full production of it, but instead they’re paying for the first-rights access to air it. In other words, they get the first “window” to show it to viewers. And while the company is saying that this isn’t a shift in strategy, it could end up being potentially much more than that. Up until now, Netflix has not had content in this first window.
But with House of Cards, the game changes. And if that’s the case, they’ll be doing a lot more of these deals. Not Even Kevin Rose Really Uses Digg Anymore. Update: Kevin Rose Resigns From Digg, Closing Round On New Startup How bad are things at the once-mighty Digg these days? Not so good. It’s been months since Digg relaunched in August in a quest for relevance. They had 18 million unique worldwide visitors that month according to Comscore. That dropped to just under 12 million in January, a 33% drop in just five months. Everything official coming out of Digg says things are great and that a the company will find a way to success. He’s barely even using the service anymore. Over the last 30 days, he’s only had seven actions on Digg, less than one action every 4 days. R.I.P. Microsoft Zune, 2006-2011. Bloomberg is reporting that Microsoft has finally decided to put an official end to its Zune media player line.
“A person familiar with the decision” has informed them that Microsoft will not be putting out any new hardware in the line, and will be henceforward focusing on integrating Zune functionality with the Windows Phone 7 platform. Not exactly unexpected; the Zune hardware hasn’t changed since mid-2009′s release of the Zune HD, although it has received several significant software upgrades. The writing has been on the wall for a long time, but whether Microsoft would double down (again) or cut their losses was far from clear.
Let’s just have a quick trip down memory lane. CrunchGear was one of the first in the world to see the Zune after a Microsoft employee unwisely (or perhaps wisely) left one on the table at a Seattle dive bar with bloggers around. We covered it feverishly, as it seemed to be a dark horse competitor to the iPod that might actually stand a chance. So long, Zune. LivingSocial Gains Wealth Of Ruby on Rails Expertise With InfoEther Acquisition. In what appears to be mostly about the talent of its founding team, LivingSocial has moved to acquire Ruby on Rails consultancy outfit InfoEther. The social ecommerce giant, which has raised $232 million in venture capital to date and has been getting nearly as acquisitive as its rival Groupon lately, says InfoEther’s agility and expertise will enhance its ability to innovate more effectively.
Terms of the acquisition were not disclosed. InfoEther is a leading technology consultancy shop specialized in the open-source Ruby software development language and its related Web development framework, Ruby on Rails, which is the basis of the technology upon which LivingSocial is based. Originally founded in 2001, InfoEther is believed to be the first US-based company that generated revenue from Ruby, which was created in Japan.
Since 2007, it has specialized in the Rails framework, in more than 40 client engagements internationally. Chad Fowler, InfoEther’s CTO, comments on the acquisition thusly: Sponto Lands $200,000 For Realtime Party Sharing Service For Students. Sponto, maker of a mobile party discovery application for college students, has scored $200,000 in initial equity financing from Amplifier Ventures. As part of the investment, Sponto has joined the investment firm’s Business Accelerator Program. Sponto uses the GPS capabilities built into modern smartphones to help students discover, publicize and meet up at parties, concerts and other gatherings, in real-time. The service is currently in beta and open only to students at the University of Maryland with an UMD.edu email address.
The funding will be used to complete the first commercial release of the Sponto event-sharing platform in the second quarter of 2011, to expand to new schools, and to grow its team. YouTube Continues To Amp Up Its Content Quality, Buys Green Parrot Pictures. YouTube seems laser-focused on amping up its overall content quality as of late, with the acquisition of original video site Next New Networks just last week and today’s news that it has acquired digital video technology company Green Parrot Pictures. “Some of YouTube’s most popular or moving videos are shot using low-quality mobile phones and video cameras.
Take, for example, videos of recent protests in Libya. Although emotionally captivating, they can be jerky, blurry or unsteady.What if there was a technology that could improve the quality of such videos — sharpening the image, reducing visual noise and rendering a higher-quality, steadier video — all while your video is simply being uploaded to the site? You can imagine how excited we were when we discovered an small, ambitious company based in Ireland that can do exactly this.” The acquisition of Green Parrot Pictures is just one small step in this long march towards being the go-to destination for niche video.