In This Update:
• Blockbuster Bids Up to $1.3 Billion for Circuit City
• AOL to Manage Verizon’s Online and Mobile Web Ad Inventory
• Report: Farecast Sold in $75 Million Deal
• Salesforce Adds Google E-mail, Office Programs
• AP Debuts Online Video Syndication
• FCC to Look into Firms’ Use of Customer Data
• Verizon Adds Unlimited Smartphone Plan
• Australia Requests Bids for $8.8 Billion Broadband Network
• Report: Pageflakes Acquired By Live Universe
• Federated Media Receives $40-$50 Million, From Oak And Others
• The Conversion to Digital TV Could be a Cost to Cable Users
• RGB Raises Additional $20 Million for Video Processing, Eyes Mid-2009 IPO
• WPP Amongst $50 Million Investors in Game Maker Realtime Worlds
• BuddyTV Raises $6 Million in Second Round
• Study: Pirated Web Video Peaks 12-18 Hours After Broadcast

Blockbuster Bids Up to $1.3 Billion for Circuit City
WALL STREET JOURNAL
Blockbuster Inc., attempting to reinvent its outdated video-rental business, has offered more than $1 billion in cash for struggling electronics retailer Circuit City Stores Inc. Blockbuster said it made the offer of $6 to $8 a share in a February letter to Circuit City Chief Executive Philip Schoonover, but decided to go public with it after the retailer refused to provide access to its books. The proposal is a bold move: Blockbuster would take on a troubled and loss-making company with a greater market value than its own. Blockbuster had a market capitalization of around $630 million, based on Friday’s closing price.
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AOL to Manage Verizon’s Online and Mobile Web Ad Inventory
REUTERS
Time Warner Inc’s AOL landed one of its biggest advertising deals since the division’s restructuring as the sole representative of telephone company Verizon Communications Inc’s online advertising inventory. The timing of the announcement expected on Monday is ironic as Verizon sued Time Warner Cable Inc last week accusing the majority-owned cable TV operator of false advertising related to Verizon’s FiOS high speed Internet and television service. The Verizon deal is viewed as a coup for AOL’s Platform-A advertising unit, as deal makers at Microsoft, Yahoo and AOL jostle to take a bigger stake in the business of selling display advertisements.
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Report: Farecast Sold in $75 Million Deal
SEATTLE PI
Farecast has been sold in a deal that values the online travel search startup at more than $75 million, according to a source with knowledge of the situation. The buyer was not known, and Farecast Chief Executive Hugh Crean declined to comment late Sunday. But one natural choice would be Expedia, the Bellevue travel juggernaut. Expedia spokeswoman Katie Deines said Sunday that the company does not comment on “rumors and speculation.” In December, Farecast competitors SideStep and Kayak.com merged. At the time of that deal, Madrona Venture Group’s Matt McIlwain, an investor in Farecast, said it could have “big, positive implications for Farecast.” Farecast, which tries to tell consumers whether airfares will rise or fall on selected routes, was founded by University of Washington computer scientist Oren Etzioni. It has raised about $20.6 million from Greylock Partners, Par Capital Management, Sutter Hill Ventures, WRF Capital and others.
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Salesforce Adds Google E-mail, Office Programs
REUTERS
Salesforce.com Inc, a maker of business software for tracking sales calls, on Monday started integrating its products with Google Inc’s e-mail service. Google’s Gmail – as well as its word processor, spreadsheet and other office productivity programs – were scheduled to be available to Salesforce customers on Monday morning, the two companies said in a press release. Salesforce is not charging customers for the Google office applications. The programs have long been available for free from Google.
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AP Debuts Online Video Syndication
PAIDCONTENT
The Associated Press has created a new syndication feature for its Online Video Network, the video player and uploading service for its 1,800 affiliate member websites. The global news service says members can upload videos to their respective site’s media player. They’ll also be able to share video with the rest of the network, which is made up of newspaper, TV and radio sites throughout the U.S. The new OVN also also has an ad revenue sharing system among the members. It also comes with a set of video management controls, including a filter that blocks other sites not in the OVN system from running a video.
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FCC to Look into Firms’ Use of Customer Data
REUTERS
Staff at the Federal Communications Commission are expected to recommend that it review rules on how phone and cable companies can use customer information as they try to take business from each other, an FCC official said on Friday. The FCC enforcement bureau will recommend that the commission reject a complaint by cable operators charging that Verizon Communications Inc violated the agency’s customer privacy rules by using customer information to prevent them from switching their phone service to cable, an agency official said, on condition of anonymity. Beyond that, the enforcement bureau is expected to recommend that the FCC address more broadly the issue of “customer retention activities” by both phone companies and cable operators to make sure the rules apply equally to both, the official said.
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Verizon Adds Unlimited Smartphone Plan
ELECTRONISTA
Stepping up the already increased competition between US carriers, Verizon today became one of the first providers in the country after AT&T to offer an explicitly unlimited plan for smartphones. The simply-titled Wireless E-mail and Web for Smartphone plan lets users browse and check e-mail without restriction on devices that would normally be subject to data caps. The feature lets even home users use a smartphone as a hub for most of their Internet access, Verizon says. The $30 monthly plan includes access to as many as ten personal accounts from larger services (including Windows Live and Yahoo) and doesn’t allow tethering for using phones as cellular modems. Service is initially limited to three Windows Mobile phones that include the Motorola Q9m as well as the SMT5800 and the XV6800. More devices will be available under the plan in the future, according to Verizon.
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Australia Requests Bids for $8.8 Billion Broadband Network
REUTERS via YAHOO
The Australian government has called for bids for a A$9.4 billion ($8.8 billion) high-speed broadband network that will help the country catch up in competitiveness with its peers. Australia has slower and more expensive Internet access than many other developed countries and officials have warned Australia may become less competitive without faster, nationwide coverage. Communications Minister Stephen Conroy said in a statement late on Friday the government wanted the fiber network to deliver minimum speeds of 12 megabits per second to 98 percent of Australian homes. About 64 percent of homes have broadband now. The vast distances in Australia and often inhospitable terrain make full penetration difficult. The government is offering A$4.7 billion ($4.4 billion) in funding, which it wants the winning firm to match.
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Report: Pageflakes Acquired By Live Universe
TECHCRUNCH
Pageflakes, an Ajax home page service that originally launched in Germany in late 2005, has been acquired by Los Angeles based Live Universe , sources say. The deal has not yet been announced, and both Live Universe and Pageflakes refuse to comment. Pageflakes raised a high profile round of funding in May 2006 from Benchmark Europe (renamed Balderton Capital ). Balderton has continued to bridge the company with additional funds, and about $4 million has been invested to date. Live Universe , which was founded by MySpace founder Brad Greenspan, has made a number of acquisitions to spur growth. Most recently, they acquired video site Revver , in February 2008. The also run the video site LiveVideo.com .
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Federated Media Receives $40-$50 Million, From Oak And Others
PE HUB via PAIDCONTENT
Federated Media, the online blog ad network founded by John Battelle, has raised between $40 million and $50 million, in its third round of funding at a $200 million pre-money valuation, reports PEHub, citing sources. The round was led by late-stage investor Oak Investment Partners, and included return backers Omidyar Network and Panorama Capital, the report says. The company has about $25 million in 2007 revenue, and expects around $60 million this year. The story says a formal announcement is expected later this week. The company sells text and video ads across a number of blogs in different categories, and has started getting into events as well. It has raised two rounds of funding, the second for $4.5 million.
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The Conversion to Digital TV Could be a Cost to Cable Users
SAN FRANCISCO CHRONICLE
Thus far, government and the broadcast industry have focused their consumer-education efforts regarding the transition on viewers of over-the-air television programming. But information about how the transition will affect cable subscribers has been scant. There are about 65 million basic cable subscribers in the United States, according to the National Cable and Telecommunications Association. About 37 million of them are digital subscribers, meaning they most likely have a set-top box. Those customers will not be affected by the broadcast transition, regardless of the age of their television. But the 28 million cable customers who receive analog service – meaning they probably plug their cable wire straight into the back of their set and do not have a set-top box – may have reason to worry.
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RGB Raises Additional $20 Million for Video Processing, Eyes Mid-2009 IPO
MULTICHANNEL NEWS
Jef Graham is ready for his closeup. The CEO of RGB Networks claims the video-processing company grew annual sales 72% in 2007, with product shipments totaling $31 million for the year. Graham is targeting a run rate of more than $50 million for 2008. And now, RGB has put more money in the bank, which Graham said will let it become “aggressive” in the market in taking on big guns like Motorola and Cisco Systems. The company is expected to announce this week that it has raised $20 million in fourth-round funding, giving RGB a valuation of $200 million – an 82% increase over its $110 million valuation in June 2006. The round, which gives RGB a total of $57 million raised, was led by new investor Institutional Venture Partners, and RGB’s previous backers also participated: Accel Partners, Comcast Interactive Capital, Kleiner Perkins Caufield & Byers and Focus Ventures.
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WPP Amongst $50 Million Investors in Game Maker Realtime Worlds
PAIDCONTENT
One way to start playing in in-game advertising – forget middlemen; buy a game maker. WPP has acquired a minority stake in Dundee, Scotland-based game developer Realtime Worlds for $8.1 million. It’s part of a total $50 million second round funding, led by Maverick Capital and joined by New Enterprise Associates, that’s pitched toward general “continued expansion”. Founded in 2002, Realtime Worlds’ founder David Jones previously made Lemmings and Grand Theft Auto, employs over 200 staff and has offices in Boulder, Colorado. A 2006 first round of $31 million came from New Enterprise and the company went on to make the MMOG APB and X-box 360 action title Crackdown.
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BuddyTV Raises $6 Million in Second Round
VENTUREBEAT
BuddyTV has raised a $6 million second round as it expands its independent TV community site on the web. Madrona Venture Group led the round for the Seattle-based company, which was founded in 2005 by Andy Liu and David Niu. BuddyTV raised its previous round in June 2007 from Gemstart-TV Guide and Charles River Ventures. The site says it has several million fans visiting monthly to keep up with their favorite TV shows and stars. The site Geoff Entress will join BuddyTV’s board of directors and Madrona managing director Greg Gottesman will serve as a board observer.
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Study: Pirated Web Video Peaks 12-18 Hours After Broadcast
MULTICHANNEL NEWS
Unauthorized viewing of popular TV shows on video-sharing Web sites like YouTube peaks between 12 and 18 hours after an episode is broadcast, according to a study conducted by Akamai Technologies and content-identification service provider Vobile. The companies tracked one broadcaster’s primetime show-which they declined to identify-over a 30-day period starting the second week of January. They found that while illegal versions of the show became available online within minutes of broadcast, consumption was relatively low in the first 12 hours. Usage spiked the morning following broadcast and grew larger throughout the day. Within 72 hours, unauthorized versions eroded the audience for the content owner’s own TV episode distributed online almost 20%, according to Akamai and Vobile.
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