In This Update:
• Executives from AOL and IAC/InterActiveCorp Launch Investment Fund
• I.B.M. to Push ‘Cloud Computing,’ Using Data From Afar
• Google TV Ready to Add Cable Partners
• DivX Acquiring Germany’s MainConcept AG for Up to $28 Million
• Yahoo and Google to Turn E-Mail Into a Social Network
• Report: Microsoft Planning a Flickr Clone
• Broadband Data Collection Bill Passes Full House
• Comcast Sued Over BitTorrent Blocking
• High-quality YouTube Videos Coming Soon
• ChaCha Recevies $10 Million Funding for Human-Powered Search Engine
• Blog Media Firm GigaOmni Media Raises $1 Million Second Round
• Study: 1 in 10 will Pay to Remove YouTube Ads
• ‘NBC Direct’ Download Service Launches to Lukewarm Reviews
• Viddler Launches Innovative Video Monetization Plan

Executives from AOL and IAC/InterActiveCorp Launch Investment Fund
REUTERS via YAHOO
Veteran Internet executives from AOL and IAC/InterActiveCorp plan to unveil on Thursday a new firm to coach early stage entrepreneurs in digital markets and invest in their start-up Internet and mobile companies. LaunchBox Digital — founded by Julius Genachowski, former chief of business operations at IAC; Sean Greene, founder of The Away Network; and former AOL Chief Technology Officer John McKinley — will offer start-ups up to $1 million in financing. “There’s a capital gap emerging as venture funds get larger and put more money to work per deal, but as cost to start companies go down, it gets harder for early stage companies to figure out where to go to get early stage funding,” Genachowski said in a phone interview. Some venture capital funds now invest no less than $5 million to $10 million in individual companies, he said. Funds now prefer to bet on already-proven winners in an increasingly competitive market for Internet start-ups.
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I.B.M. to Push ‘Cloud Computing,’ Using Data From Afar
NEW YORK TIMES
I.B.M. plans to build a sizable business by bringing Google-style computing to mainstream corporate customers. The I.B.M. strategy, to be announced today, seeks to exploit the technical work and commercial interest in large data centers that can be run more efficiently, searched for information and programmed from remote locations over the Internet. This model of Internet-based supercomputing is known as cloud computing because vast stores of information and processing resources can be tapped from afar – by a laptop personal computer, cellphone or other device. I.B.M. is calling its initiative Blue Cloud.
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Google TV Ready to Add Cable Partners
SILICON ALLEY INSIDER
Google is getting ready to expand its TV ad sales initiative, says the executive heading the program. Mike Steib, the former NBC U exec who came over to Google this year, won’t cough up details about Google’s plans, but said in an interview that an expansion was in the works: He said “stay tuned on the inventory front” when we asked about the chances that Google TV would finally add a TV network to its ad-auction network. Right now Google’s network, launched this year, includes a small regional cable network and satellite tv provider Echostar (DISH), which came on in May; it reaches 14 million households, or about 30 million people. Additional inventory would mean at least one of two things: signing another cable/satellite/telco, or getting a TV network, likely a cable network, to sign on.
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DivX Acquiring Germany’s MainConcept AG for Up to $28 Million
PAIDCONTENT
Video compression firm DivX (NSDQ: DIVX) has acquired MainConcept AG for $22 million in cash and stock ($16.2 million in cash and rest in stock) plus $5.8 million in potential earnouts through 2008. The German company is a provider of H.264 and other digital video technologies for use in media and consumer electronics. DivX believes the acquisition will help it increase its penetration in certain key markets, such as mobile, HDTV, set-top boxes, and digital cameras. The deal is expected to shave $.02 – $.03 off of DivX’s fourth quarter earnings, due to integration costs, but be accretive by the second half of 08. MainConcepts founder Markus Moenig is joining DivX as an SVP.
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Yahoo and Google to Turn E-Mail Into a Social Network
NEW YORK TIMES
Google and Yahoo have come up with new and very similar plans to respond to the challenge from MySpace and Facebook: They hope to turn their e-mail systems and personalized home page services (iGoogle and MyYahoo) into social networks. Web-based e-mail systems already contain much of what Facebook calls the social graph – the connections between people. That’s why the social networks offer to import the e-mail address books of new users to jump-start their list of friends. Yahoo and Google realize that they have this information and can use it to build their own services that connect people to their contacts. Brad Garlinghouse, who runs the communication and community products for Yahoo, was a lot more forthcoming. He didn’t-have dates or specific product details either. But he did say that Yahoo was working on what he called “Inbox 2.0.”
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Report: Microsoft Planning a Flickr Clone
CNET
Judging by a Microsoft job ad, the software giant wants to add a Flickr-like service to its online efforts. According to text from the ad, the company is looking for a program manager for a new division of its Windows Live effort. “This feature team is building a next-generation photo and video sharing service that will compete with Flickr, SmugMug and other photo web solutions today. This is a ‘v1′ opportunity,” the ad said. And video will be a part of the effort, too: “This role will work across the new Windows Live division with teams like Spaces, SkyDrive, Messenger and Hotmail to construct a winning strategy for Microsoft in photo and video sharing.” Evidently, Microsoft sees the effort as an online extension of its current desktop technology.
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Broadband Data Collection Bill Passes Full House
ARS TECHNICA
The House of Representatives has approved the Broadband Census of America Act on a voice vote. Sponsored by Rep. Ed Markey (D-MA), the bill passed the House Energy and Commerce Committee late last month, and would drastically overhaul the Federal Communications Commission’s antiquated broadband data collection methodology. Currently, the FCC says that a ZIP code is served by broadband if just a single subscriber has a connection of 200Kbps or faster. That will change under the Broadband Census Act. Broadband providers will have to provide specific subscriber numbers, the technology used, and advertised speeds. The National Telecommunications and Information Administration will use the data to create broadband deployment maps, which it will make available to the public on the Internet. These maps will show what kind of broadband is available in which areas, and will drill down to the ZIP+4 level.
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Comcast Sued Over BitTorrent Blocking
WIRED
A California man filed suit in state court Tuesday against internet service provider Comcast, arguing that the company’s secret use of technology to limit peer-to-peer applications such as BitTorrent violates federal computer fraud laws, their user contracts and anti-fraudulent advertising statutes. Plaintiff Jon Hart, represented by the Lexington Law Group, argues that Comcast’s promises of providing internet connections that let users “Download at Crazy Fast Speeds” are false and misleading since Comcast limits downloads by transmitting “unauthorized hidden messages to the computers of customers” who use peer-to-peer file sharing software. Hart wants the court to force Comcast to stop interfering with the traffic.
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High-quality YouTube Videos Coming Soon
CNET
YouTube co-founder Steve Chen, speaking at the NewTeeVee Live conference today, confirmed that high-quality YouTube video streams are coming soon. Although YouTube’s goal, he said, is to make the site’s vast library of content available to everyone, and that requires a fairly low-bitrate stream, the service is testing a player that detects the speed of the viewer’s Net connection and serves up higher-quality video if they want it. Chen told me that he expects that high-quality YouTube vids will be available to everyone within three months.
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ChaCha Recevies $10 Million Funding for Human-Powered Search Engine
FROSTFIREBUZZ
ChaCha, the real-time human-powered search engine, announced today it received $8 million in private equity funding and a $2 million grant from Indiana’s 21st Century Technology Fund resulting in total proceeds to the company of $10 million. Morton Meyerson, a first time investor in the company who led the round, joins ChaCha investors Bezos Expeditions, the personal investment firm of Jeff Bezos, Rod Canion, founding CEO of Compaq Computer, and Jack Gill, veteran Silicon Valley investor, founder of Vanguard Ventures and current partner at Maven Ventures.
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Blog Media Firm GigaOmni Media Raises $1 Million Second Round
PAIDCONTENT
GigaOmni Media, the parent company of popular tech blogs Gigaom and NewTeeVee, among others, has raised around $1 million in its second round of funding, according to Beet.tv. The announcement of the new funding was done today at the company’s conference NewTeeVee Live. The second round comes from its current investor True Ventures and a few unnamed angels. The first round was raised last year, and the amount was not disclosed, but it was less than the second round. The company now has five different blogs and has branched out into events.
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Study: 1 in 10 will Pay to Remove YouTube Ads
E-CONSULTANCY
YouTube and its challengers may be able to earn subscription revenues, if the findings of a new IBM report are accurate. The study found that the TiVo generation is officially online, with 11% of respondents happy to pay ‘a little’ to remove all advertising from videos. Consider the numbers: Google-owned YouTube pulls in something like 50m unique users a month; let’s assume it can charge ‘a little’, a couple of dollars a month maybe – let’s round it up to $24.99 a year for a ‘premium user’ service. Now assume that 11% of users sign up. That’s a revenue stream worth $137m annually. IBM’s ‘End of advertising’ survey was completed by 2,400 consumers and 80 ad execs.
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‘NBC Direct’ Download Service Launches to Lukewarm Reviews
NEWTEEVEE
NBC launched its NBC Direct beta over the weekend. The service allows you to download NBC shows to your computer and view them for 48 hours, but compared with the rather elegant (though still limited) Hulu – which is part-owned by NBC – NBC Direct is an overly complicated mess. First, it’s a separate download client that’s Windows-, Internet Explorer- and Windows Media Player-only. AOL dropped its Hi-Q service, which required a download, after low adoption. Rather than learn from history, NBC appears doomed to repeat it.
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Viddler Launches Innovative Video Monetization Plan
CENTERNETWORKS
Viddler, the online video sharing service, is announcing the launch of their contextual advertising program today. It’s very simple in concept. Advertising is tied to tags. You buy a tag and then your ad will show when the timeline hits that tag. It works for both products and keywords. They are offering a free $100 for new advertisers to get started with the program. Revenue is shared 50-50 between video publisher and Viddler. Buying ads is as simple as buying AdWords on Google and there are a variety of targeting methods.
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Tags: AOL, BitTorrent, ChaCha, DivX, EchoStar, EMC, EMI, Facebook, Financing, Google, HBO, Hulu, IAC, IBM, Microsoft, MySpace, NBC, Tivo, Turn, Venture Capital, Viddler, Video, Yahoo, YouTube