Here’s our roundup of the week’s tech business news. First, the most popular stories VentureBeat published in the last seven days:

Digg founder: We let Digg stagnate — Digg, the pioneering social-news site which lets users vote on top headlines, began to lose momentum during the recession because it pulled engineers from designing new features to improving revenue, founder Kevin Rose said Wednesday.

New iPad designs surface in patent filings — Apple tipped its hand on future iPad designs by filing for patents in China.

Is it too late for a Digg comeback? — Digg is trying to work its way out of the traffic hole it created with its botched redesign attempt. This week it announced the return of several popular features from its previous version.

Google’s Mayer criticizes content “locked” inside Facebook — Marissa Mayer, Google’s vice president of search and user experience, talked about how she sees Facebook, and about whether or not it’s a competitor.

RIM announces 7-inch BlackBerry PlayBook tablet — Research in Motion founder and co-CEO Mike Lazaridis hit the stage at RIM’s BlackBerry Developers Conference in San Francisco on Monday, where he unveiled the company’s long-awaited tablet — the BlackBerry Playbook.

And here are five more posts we think are important, thought-provoking, or fun:

Internet phone company Jajah aims to revamp the crooked calling card industry — Jajah, the internet phone company that was snapped up by Spanish telecom giant Telefonica for $207 million, is declaring war on calling cards.

Venture capitalist Khosla sour on electric cars — Vinod Khosla, dynamic founder of Khosla Ventures, said, “You can reduce more carbon by painting your roof white than you can by buying a Prius.”

Are Carol Bartz and Elon Musk !@#$ing menaces to shareholders? — How can you tell when a CEO is lying? It turns out that it’s slightly more complicated than monitoring the movement of their lips.

Confirmed: AOL acquires TechCrunch, founder Arrington to stay at least 3 years — AOL chief executive Tim Armstrong announced that he has acquired popular tech blog TechCrunch.

Google CEO: the Internet of things will augment your brain — For Google CEO Eric Schmidt, the next step in technology is the same that it has always been — augmenting humanity to handle information that a human brain couldn’t otherwise keep up with, and just make things work.

Tags: BlackBerry PlayBook, calling cards, electric cars, iPad, Techcrunch Disrupt

Companies: aol, Apple, digg, Google, jajah, Khosla Ventures, Research In Motion, techcrunch

People: Carol Bartz, Elon Musk, Eric Schmidt, Kevin Rose, Marissa Mayer, Mike Lazaridis, Tim Armstrong, Vinod Khosla

Article courtesy of VentureBeat » Deals & More

Acquiring TechCrunch was certainly AOL’s biggest announcement today, but the company didn’t stop there: This afternoon news spread that AOL also purchased Thing Labs — creator of the Brizzly social media reader — for an undisclosed amount, PaidContent reports.

AOL also officially announced this morning that it acquired the web video syndication company 5min Media. Terms of that deal weren’t disclosed either, but sources familiar with the deal say that its close to $65 million, according to AllThingsDigital.

We reported weeks ago that AOL and Thing Labs were looking to make a deal, and that it would likely be valued in the low tens of millions. In addition to continuing their work on Brizzly, AOL is also putting the Thing Labs team in new management positions running AIM (AOL Instant Messenger) and AOL Lifestream. The team is spearheaded by former Google Reader product manager Jason Shellen and will be reporting to Brad Garlinghouse, president of consumer applications at AOL.

Brizzly has always seemed like a direct competitor to AOL Lifestream, so it’s going to be interesting to see how AOL juggles both products. Lifestream receives about 5 million users a year, and Garlinghouse believes the Thing Labs team will be able to make it an even more useful product.

With 5Min, AOL gains access to a video syndication network of more than 200,000 “categorized, tagged, and rated” videos, from more than 1,000 media companies and independent video producers. The site is focused on instructional and do-it-yourself videos, and it has a network of more than 800 partner sites that can target viewers across 21 different content verticals.

5min’s videos are already being integrated onto some AOL sites through a deal reached before AOL’s purchase. “With 5min Media we’ll be able to add more video inventory to our pages. Importantly, we’ll also be able to identify video content holes among our sites, tap our StudioNow [a video creation company AOL bought in January] capabilities to fill those needs and create a truly ‘demand informed’ video library,” AOL CEO Tim Armstrong said.

All of AOL’s acquisitions from today are clearly strategic: Thing Labs gives the company a better social media management presence, 5min offers an easy way to distribute its videos, and of course, TechCrunch gives the media giant a popular source of technology coverage that’s different from its other properties like Engadget.

Tags: AIM, AOL Lifestream, brizzly, syndication, Video

Companies: 5min Media, aol, Thing Labs

People: Jason Shellen, Tim Armstrong

Article courtesy of VentureBeat » Deals & More

AOL chief executive Tim Armstrong just confirmed that his company has acquired popular tech blog TechCrunch. He’s currently on-stage in San Francisco with TechCrunch founder and editor Michael Arrington at TechCrunch’s Disrupt conference. The pair said they were spurred to reveal the acquisition earlier than planned after a scoop by GigaOm, a rival blog, yesterday that the deal was about to close.

In fact, they signed the contract on-stage.

Armstrong said he first approached Arrington about an acquisition in May, at the TechCrunch Disrupt Conference in New York. His main condition: That Arrington, who has been such a key part of the site’s identity and popularity, stay on board for at least three years.

Under Armstrong, a former top sales executive at Google, AOL has focused on its Web content properties such as AOL News, Moviefone, and Fanhouse as it continues to shed its former identity as an Internet service provider.

Asked how the TechCrunch properties might coexist with competing AOL-owned sites like Engadget, Armstrong said: “I would expect these brands to operate independently but leverage each other.” Besides its flagship TechCrunch site, TechCrunch has a smaller, gadget-focused site, CrunchGear.

Arrington also said that Armstrong will allow TechCrunch to continue its occasionally controversial approach to breaking news. For example, if a situation like the leak of internal Twitter documents to TechCrunch occurred again, AOL would still allow TechCrunch to publish those documents.

Armstrong has published a post on TechCrunch announcing the deal, though it’s basically just a copy of the press release.

“Tim Armstrong and his team have an exciting vision for the future of AOL as a global leader in creating and delivering world-class content to consumers, be it through original content creation, partnerships or acquisitions,” Arrington said in the release. “I look forward to working with everyone at AOL as we build on our reputation for independent tech journalism and continue to set the agenda for insight, reviews and collaborative discussion about the future of the technology industry.”

The acquisition price was not disclosed. Business Insider heard that it was $25 million. It sounds like the source for that number is two degrees removed from the deal — AOL reportedly told “insiders” about the price, then one of the insiders told Business Insider. (Update: CNBC’s sources say AOL paid $40 million.)

If true, the price sounds a bit low for a company earning a reported $10 million annually. But Arrington doesn’t face as much pressure to earn a big exit, since he didn’t raise any outside funding (unlike other tech news sites like GigaOm and VentureBeat).

[Photo by Matt Lynley. Front page image via Flickr/Joi Ito.]

Tags: Techcrunch Disrupt

Companies: aol, techcrunch

People: Mike Arrington, Tim Armstrong

Article courtesy of VentureBeat » Deals & More

Most of you have probably had the experience of visiting a website and finding that it’s running incredibly slowly, or that it has disappeared because of some attack. Big companies try to fix this problem by using content distribution networks (CDNs) and hiring security teams.

Now a startup called CloudFlare said it can bring comparable services to small Web publishers who can’t afford big-company solutions. Co-founder and chief executive Matthew Prince said publishers just add some code to their servers, then their sites are running on top of CloudFlare infrastructure.

CloudFlare is free, so it has already signed up 1,000 websites with a total of 6 million unique visitors. Prince said CloudFlare reduces page load times by about 30 percent on average and stops many spam attacks — in fact, he said the company ran a test showing that CloudFlare would have stopped the recent Twitter hack.

The Palo Alto, Calif. company launched at the TechCrunch Disrupt conference in San Francisco. It has raised $2.05 million, and although the basic service is free, it will charge for additional features.

Tags: Techcrunch Disrupt

Companies: Cloudflare

People: Matthew Prince

Article courtesy of VentureBeat » Deals & More

Japanese company Gunzoo demonstrated a new way to search for videos today.

As shown on-stage at the TechCrunch Disrupt conference in San Francisco, Gunzoo’s experience is much slicker than most video search options today, which mainly involve scrolling through thumbnail image previews of each video. The company merges all the videos into what looks like a fabric of videos, all playing at once, which you can zoom into on your own.

The experience of zooming in on different videos reminds me of Cooliris’ 3D wall, but unlike Cooliris, Gunzoo seems super-focused on video. Behind the scenes, Gunzoo is merging all the videos into a single stream in the H.264 format, which means that it should play on all devices, including smartphones. Users can also upload videos to add to the fabric.

Lowercase Capital’s Chris Sacca, one of the Startup Battlefield judges during the conference, said that he’s pretty sure this is how his kids will consume video. The question is whether it’s too futuristic for a product launching today.

Gunzoo has raised $1.15 million in funding.

Tags: Techcrunch Disrupt, video search

Companies: Gunzoo

Article courtesy of VentureBeat » Deals & More

Life never turns out quite the way you planned. Nor do startups. Two San Francisco-based companies, VideoEgg and Six Apart, are formally announcing tomorrow that they’re forming a new company, Say Media, built around online advertising — a business that doesn’t have much to do with either’s origins.

VideoEgg is acquiring Six Apart, which was recently the subject of deal rumors and had hired an investment banker, GCA Savvian, as VentureBeat first reported last month.

Six Apart, a pioneer in the blogging business, was once the darling of the Web 2.0 movement, a flurry of post-dotcom-bust revivalist enthusiasm for consumer Internet startups. In 2005, cofounders Ben and Mena Trott made the cover of Fortune.

Around the same time, Matt Sanchez, David Lerman, and Kevin Sladek, three Yale graduates, were working on a venture to help nonprofits create public-service-announcement videos, a project which gave birth to VideoEgg. First they started creating tools to manage videos on the Web — and that rapidly turned into tools to place and manage video advertisements online.

Six Apart, after getting its start selling Web-publishing software and services, moved heavily into online advertising recently, touting its Six Apart Media network, which places ads on Six Apart’s own websites, its customers’ websites, and a few independents like enthusiast publisher Whiskey Media. It has moved away from its origins in personal blogging as a means of self-expression, selling the LiveJournal blog-cum-social network and shuttering Vox, a similar service.

Sanchez will lead the combined company, while Six Apart CEO Chris Alden plans to leave. Six Apart cofounder Mena Trott is joining the Say Media board, which isn’t otherwise changing. (As Business Insider, which first reported rumors of a deal, noted, the two companies already share some investors, including prominent venture-capital firm August Capital, which should make for slightly less awkward post-acquisition board meetings.) The management structure of the combined company hasn’t otherwise been set.

The companies say they’ll have a combined global audience of 345 million. Some critics of such figures note that online-advertising companies often cite the potential audience for advertisements they place, rather than the actual number of people who see ads sold through their networks.

Companies: Say Media, six apart, Videoegg

People: Chris Alden, Matt Sanchez

Article courtesy of VentureBeat » Deals & More

Laser Light Engines, which develops super-bright laser-driven light sources for projection devices, announced today that it raised $13 million for development of a 3D-movie light source.

Imax, a strategic partner, joined existing investors in the round.

The funding will help produce a custom light source for Imax theaters that is two to five times brighter than a typical xenon bulb used in projection devices — which would be particularly useful in 3D film screenings. Splitting a video into two separate feeds (one for each eye) usually cuts the brightness of the picture by 80 percent, according to Laser Light Engines.

With 3D films becoming increasingly popular, there’s room for a better light source in projection devices. James Cameron’s Avatar, perhaps the film responsible for putting 3D films in the spotlight, brought in more than $2 billion — a large chunk of that coming from its 3D film release.

The new bulbs will save theaters around $10,000 a year in replacements of the currently-used Xenon arc bulbs for projection devices and by cutting electricity costs by about 50 percent, according to the company.

The Salem, N.H.-based company had previously raised $5 million in funding from Braemar Energy and Harris & Harris in 2008.

[Photo: justin]

Tags: 3D, 3D films, 3D movies, hollywood, Imax, projection screens

Companies: Braemar Energy, Harris & Harris, Imax, Laser Light Engines

Article courtesy of VentureBeat » Deals & More

Conviva, a company focused on optimizing live video streams online, announced today that it has snagged $15M in funding.

With the growing importance of live video streams, Conviva’s technology offers peace of mind for content providers by reducing stream issues – including stuttering, and buffering – for viewers. Its software keeps track of individual viewer sessions, intelligently predicts when an interruption is about to occur, and works to prevent issues from reaching users.

It offers adaptive bit rate streaming, which allows video to play smoothly in the event of network slowdowns, and automatically switches video streams among multiple content delivery networks – on the off-chance that one network goes down entirely.

It’s technology was recently used for the 2010 World Cup, where the company says it “managed more than 200 million streams, reached more than 30 million unique viewers and handled three billion viewer minutes worldwide.” In addition to live streams, Conviva can also assist content providers with their on-demand video.

Based in San Mateo, Calif., Conviva has raised a total of $44 million since its 2006 launch. GGV capital led the round, and it saw participation from existing investors Foundation Capital, New Enterprise Associates, and Pelion Venture Partners.

Tags: content delivery networks, live video, Video, video streaming

Companies: Conviva

Article courtesy of VentureBeat » Deals & More

Stanford student Feross Aboukhadijeh, in a nod to the recent unveiling of Google Instant, has created a real-time search engine for YouTube videos — and it’s caught the attention of YouTube CEO Chad Hurley.

After spotting YouTube Instant, Hurley Tweeted over to Aboukhadijeh, saying he loved the idea and asking if he wanted a job.

Aboukhadijeh, who goes by the Twitter handle FreeTheFeross, sent a message back to find out if Hurley was serious about the offer — because, after all, this is the Internet. It looks like Hurley was, indeed, quite serious.

Aboukhadijeh announced the launch of YouTube Instant on Y Combinator’s Hacker News feed, a news aggregation site similar to Digg and Reddit. It behaves much the same way Google Instant does — as a viewer types in the video they are looking for, the engine guesses the video and begins playing it immediately.

YouTube, which was acquired by google four years ago for about $1.65 billion, might finally turn profitable this year according to some analyst predictions.

We’ve reached out for confirmation from YouTube and will update when we hear back.

Tags: automated search, autonomous search, Google Instant, real time search, YouTube Instant

Companies: YouTube

People: Chad Hurley, Feross Aboukhadijeh

Article courtesy of VentureBeat

Wagner James Au has specialized in writing about 3D virtual worlds. Under the name Hamlet Au, he has reported from inside Linden Lab’s virtual world of Second Life for three years and he still maintains a blog about it. But now he is moving on to the greener pastures of the latest cool virtual world, Blue Mars.

Journalists are fickle. But Au’s shift from Second Life to Blue Mars — a terraformed virtual planet where he will write an in-world blog dubbed Blue World Notes — is like an epitaph for an era and the beginning of a new one.

There is a business opportunity here, as one generation of technology gives way to another. World of Warcraft, a six-year-old fantasy role-playing virtual world, has more than 11 million users and generates more than a billion dollars a year in revenue for publisher Blizzard Entertainment, a division of Activision Blizzard. By contrast, virtual worlds such as Tabula Rasa and All Points Bulletin never caught on, resulting in losses of tens of millions of dollars. If opinion makers such as Au say that one world is cool and another one obsolete, other users may take notice.

Second Life itself was built mostly on its perception of coolness. Founded in 2003 by Philip Rosedale, Linden Lab’s Second Life became a virtual world in which Residents, as users of the online world were called, could create anything they wanted. Second Life’s growth really took off as it stopped charging subscription fees and users began engaging in commerce, selling the virtual goods they created. (Au is pictured left with his Second Life avatar).

Second Life went into its own hype cycle a few years ago, landing on the cover of Time magazine in 2006. One company, Digital Pastry, which makes women’s shoes for Second Life, has generated more than $1 million in revenues from the sale of 200,000 pairs of virtual shoes since early 2007, for example. But as corporations such as IBM and Dell moved to cash in, users got tired of the fad. They moved on instead to the simpler graphics and to Facebook.

Vivaty, Metaplace and There.com shut down their virtual worlds. Second Life has held its own, generating lots of e-commerce and some user growth; but it also succumbed in some ways as its parent firm lost its chief executive and laid off 30 percent of its staff; its efforts to become a productivity tool for real-world enterprises has stalled. Watching these developments, Au, who is the author of The Making of Second Life, wonders if Second Life has lost its mojo.

“I’m convinced that Blue Mars is the cutting edge,” said Au, in an interview. “It’s been thrilling and frustrating to see Second Life’s trajectory. It could take them a long time to fix their problems. ”

Au said he believes that if any virtual world has a chance of unseating social networks, then it will be something that looks like Blue Mars. Blue Mars’ graphics are based on the visually arresting 3D engine from Crytek that powered games such as Crysis, but its activities are aimed at casual game players, such as those who enjoy parlor games on web sites or social games on Facebook. Au thinks that somebody will pick up the mantle of building a community around user-generated content. That passion is why the Honolulu-based maker of Blue Mars, Avatar Reality, chose Au for the job. As he was with Linden Lab from 2003 to 2006, Au will be a paid contractor for Avatar Reality, though Au says he will remain objective when reporting.

It will be very tough for any virtual world to reach the kind of mass market that Facebook has secured. One problem is that 3D worlds have often required hefty computers and big downloads. Second Life’s flaw is that it takes a couple of hours to learn how to navigate through it, whereas other virtual activities are instantly fun. Avatar Reality is hoping to achieve an instantly playable yet gorgeous 3D graphics world through cloud computing. Once Blue Mars launches that capability (which would resemble technologies being fielded by OnLive, Otoy and Gaikai), users will be able to participate in the high-end 3D world even if they don’t have sophisticated computers. That may happen in the next couple of quarters.

Au isn’t alone in defecting to Blue Mars. John Zdanowski, former chief financial officer of Linden Lab, is now Avatar Reality’s CFO. Au will be joined in Blue Mars by virtual style and fashion columnist Janine “Iris Ophelia” Hawkins (pictured in avatar form, right). Au paid heed earlier this year when a group of die-hard Second Life “steampunk” artists set up shop in Blue Mars as if they were colonists. Au thinks that Blue Mars will be more attractive to the broader third-party development community because it embraces the kind of graphics tools that animators already use.

Blue Mars launched its open beta in October, 2009, and began selling virtual land to third-party developers in January. The company was founded in 2006 by Henk Rogers, who introduced Tetris to the world, and Kazuyuki Hashimoto, former chief technology officer of Squaresoft and former vice president at Electronic Arts.

Au says he will continue his older Second Life blog, New World Notes, on a part-time basis.

Tags: Blue Mars, Second Life

Companies: Avatar Reality, Linden Lab

People: Wagner James Au

Article courtesy of VentureBeat