In This Update:
• Venture Capital Returns Dip Below Zero
• Google Ocean Adds Detail to the Depths
• HarperCollins Expands Into Video Books for Download
• OpenTable Files for $40 Million Public Offering
• Publicis Pulls Plug on Honeyshed
• Amazon Moves into Casual Gaming in a Very Big Way
• IBM to Build Massive Supercomputer for U.S. Government
• Apartments.com Acquires Online Community Apartment Home Living
• Deadline Looms for Sirius XM’s Debt Repayment
• Yahoo Shuts Down Publisher Network RSS Ads
• Travel Video Site TVTrip Gets $9 Million Funding
• Mixpo Raises $4 Million More for Video Advertising Tech
• Report: Angels Flee From Tech Start-Ups
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McCarter & English, LLP
The law firm of new media. Major offices in New York, Boston, Newark, Stamford, and other cities. Advising new media companies from start-up to exit. Venture capital, IP protections and disputes, employment matters, outsourcing, joint ventures, acquisitions, to name just a few.

Venture Capital Returns Dip Below Zero
NEW YORK TIMES
Like almost all investors, those who invested in venture capital funds lost money last year. Venture investments returned -1.6 percent in the year ended Sept. 30, according to new data from the National Venture Capital Association and Thomson Reuters. The returns represented a 6.9 percentage-point drop from the one-year period ending June 30, 2008 and a 28.2 percentage-point drop from the one-year period ending Sept. 30, 2007, Thomson Reuters’ U.S. Private Equity Performance Index found. Still, venture losses were much less than those in the public markets. The Nasdaq was down 21.4 percent and the S&P 500 down 22 percent in the year ending Sept. 30.
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Google Ocean Adds Detail to the Depths
NEW SCIENTIST
Ever wanted to explore the deep ocean without getting wet? Now you can with Ocean in Google Earth, the new addition to the company’s virtual Earth model. The tool will allow users to fly beyond the beach and, in place of the flat seabed image of previous versions, see a shimmering, semi-transparent sea. Dive beneath it and the oceanic mountain ranges, trenches and abyssal plains are there for all to see. Google’s usual satellite imaging can’t peer through deep water to map the seabed. Instead, sound is the tool of choice when mapping the ocean floor. Passing sonar arrays over every patch of ocean is beyond even Google’s means, so it has had to rely on the US navy for much of the information.
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HarperCollins Expands Into Video Books for Download
WALL STREET JOURNAL
As book publishers look to new digital formats for sales growth, News Corp.’s HarperCollins Publishers is launching a video edition of Jeff Jarvis’s “What Would Google Do?” that it will sell through Amazon.com Inc.’s Amazon digital-download store. The 23-minute video book, which will go on sale for $9.99 Tuesday, will be viewable on personal computers but also is being developed for mobile devices such as Apple Inc.’s iPod and iPhone.
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OpenTable Files for $40 Million Public Offering
KELSEY GROUP
OpenTable, the online restaurant reservation service, has filed an S1 with the SEC to raise $40 million. The company, founded in 1998 by former Citysearch President Thomas Layton, was launched as Easyseats.com. It currently has contracts with 10,000 restaurants in all 50 states, or approximately one-third of U.S. reservation restaurants. It seats roughly 2.8 million diners per month. Among OpenTable’s features are computerized reservation management, table management, guest recognition and e-mail marketing for restaurants. In return, it charges installation fees, subscription fees and incremental fees per booked diner. It made $41.3 million for the nine months ended Sept. 30, earning a small profit. This comprises $22.16 million from subscriptions, $17.34 million from reservations, and $1.81 million from installations and related services.
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Publicis Pulls Plug on Honeyshed
ADWEEK
Honeyshed, the closely watched endeavor from Publicis Groupe, Droga5 and Smuggler, is shutting down after Publicis declined to invest more money in the venture. Honeyshed’s management and Publicis jointly agreed to end the venture, according to Honeyshed CEO Steve Greifer. It will cease operations immediately and the site will come down this week or next, he said. The company, which operated independently, will lay off its 10 full-time employees. The site, billed by David Droga as “QVC meets MTV,” never found much of an audience in its 15 months of existence.
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Amazon Moves into Casual Gaming in a Very Big Way
ARS TECHNICA
Video games remain big business, and casual games are becoming an increasingly large slice of the industry’s pie. Near the end of last year, online super-merchant Amazon.com purchased the casual game developer and portal Reflexive, and the industry wondered what fruit it would bear. We now know: Amazon is announcing the launch of its own casual games portal, with 500 games ready to download. For the first week, visitors will even be able to grab three games for free: Jewel Quest 2, Build a Lot, and The Scruffs. That, along with the ability to try every game before you buy, should be enough to entice fans of casual gaming to check out Amazon’s offerings. It also looks like this could be Amazon’s first step into the world of digital distribution for video games.
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IBM to Build Massive Supercomputer for U.S. Government
COMPUTERWORLD
The U.S. government has hired IBM to build a supercomputer with more power than all the supercomputers on the Top 500 supercomputer list combined. It’s an ambitious claim by IBM in a business where jumbo-sized claims are the norm. The planned Sequoia system, capable of 20 petaflops, will be used by the U.S. Department of Energy in its nuclear stockpile research. The fastest systems today can only reach 1 petaflop, a remarkable achievement in its own right that was met only last year.
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Apartments.com Acquires Online Community Apartment Home Living
PAIDCONTENT
Apartments.com has acquired Apartment Home Living, an online community and resource guide for renters, for an undisclosed sum. Austin, Texas-based Apartment Home Living initially launched as Apartments Mailed Direct, a direct-mail apartment listing service; it changed its name to reflect a more web-centric approach in 2006. The site blends moving- and home improvement-based blogs and video content with social media tools; there’s also lifestyle info tailored to more than 4,000 neighborhoods and apartment listings.
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Deadline Looms for Sirius XM’s Debt Repayment
WALL STREET JOURNAL
Sirius XM Satellite Radio Inc. is facing an important test of its viability this month: how it handles $174.6 million in debt coming due Feb. 17. Questions over how the company can pay it, along with $750 million more in debt due later in the year, have been dogging the company’s stock price for months. Trading around $3 a year ago, shares in recent weeks have been stuck in the 10 cent-to-12-cent range.
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Yahoo Shuts Down Publisher Network RSS Ads
TECHCRUNCH
Yahoo! has discontinued its Ads in RSS service, which enabled network publishers to insert contextual advertising into syndicated content and get a piece of the action thanks to a revenue-sharing program. Yahoo refers to Ads in RSS as a beta program, but it was launched quite a while ago; it was formally introduced in November 2005.
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Travel Video Site TVTrip Gets $9 Million Funding
PAIDCONTENT
Paris-based TVTrip, which publishes video reviews of hotels in 157 cities worldwide, has bagged €7 million (about $9 million) in VC funding from previous backers Partech International and Balderton Capital, in a second round joined by AGF Private Equity. The site raised $4.8 million (£3.38 million) in its first round funding in July 2007. A new version of the site, with more video-sharing than is currently on offer, goes live on March 10.
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Mixpo Raises $4 Million More for Video Advertising Tech
TECHCRUNCH
Seattle-based online video advertising technology company Mixpo has raised $4 million more from previous investors Madrona Venture Group, Growthworks and Yaletown Venture Partners, bringing the total of capital invested in the company to a healthy $10.5 million . As media companies continue to struggle with revenue declines across the board and as the economy has many SMBs turning over every advertising penny twice before spending, publishers are trying to diversify their interactive product portfolios. Online video advertising has emerged as the fastest-growing online advertising format for small and medium-sized businesses.
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Report: Angels Flee From Tech Start-Ups
NEW YORK TIMES
Technology entrepreneurs are having a devil of a time finding angels. Angel investors are the optimistic financiers who give entrepreneurs their crucial first infusion of cash to bring their ideas to life. Now, in the midst of a punishing economic downturn that is sparing few companies, these patrons are cutting back on their bets and threatening the very foundation of the technology economy. Unlike venture capitalists, angels invest small amounts of their own money – as little as $10,000 and usually less than $1 million – in very young companies. But like all investors, many angels suffered deep losses when the market plunged last fall. That has left them skittish, investing in fewer technology start-ups and demanding more of those they do consider, leaving founders struggling to find money at the stage they need it most. The slowdown, entrepreneurs and investors say, could stunt the growth of new companies and have long-term effects on innovation.
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