Palm today announced that Elevation Partners has agreed to make an additional $100 million equity investment in Palm. Under a definitive agreement reached today, Elevation will increase its investment in Palm by acquiring newly issued Series C preferred stock that is convertible into Palm common stock at a price of $3.25 per share, a 31 percent premium to the closing price of Palm common stock on Dec. 19, 2008. The Series C preferred stock carries a 0% dividend rate. Elevation will also receive warrants to acquire 7 million shares of Palm common stock at the same price. Prior to March 31, 2009, Palm may elect to cause Elevation to sell up to $49 million of this new investment to other investors on the same or better terms than on which Elevation invested.

“The additional capital from Elevation Partners will enable us to put added momentum behind the new product introductions scheduled for 2009 and will provide us with enhanced stability in unsettled economic times,” said Ed Colligan, president and chief executive officer of Palm, Inc. “Elevation has been a great partner to Palm, and we appreciate their continued confidence and support.”

“We believe that Palm is in a position to transform the cell phone industry, and we are pleased to have the opportunity to make this additional investment in the company. Palm has an industry-leading team and an exciting, differentiated product roadmap. We are proud to be associated with the company and look forward to great things from Palm in 2009 and beyond,” stated Roger McNamee, co-founder of Elevation Partners.

LucidMedia, an online contextual display advertising platform and meta-network, today announced several milestones surrounding its continued growth, inclusive of the completion of $8.8 million in funding, including the value of converted debt, to support the launch and expansion of LucidMedia’s contextual advertising network; the opening of a New York City sales office on Madison Avenue; and the hiring of a national sales team to better service its growing client base of interactive agencies and corporations. Despite the current economic climate, LucidMedia has experienced steady growth of its client base, driven by its patented contextual page-level technology, developed to maximize campaign performance, increase brand recognition online, and ultimately raise advertisers’ return on investment.

The funding is led by a combination of institutional and individual investors including Lake Street Capital, RLI Partners, Melton Investments, Silicon Valley investment veteran Milan Mandaric, and Redleaf Group, whose CEO, Michael Tomana, has joined the company’s Board of Directors. This is LucidMedia’s third round of funding.

“The continued expansion of LucidMedia’s network, as well as our overall growth, is particularly noteworthy during a time of consolidation throughout the broader online advertising sector,” said Ajay Sravanapudi, LucidMedia President and CEO. “In any economic climate, we believe that offering some of the industry’s highest levels of performance, insight and brand safety provides significant value to the industry and we are very pleased to further our commitment to our clients and partners by opening our Madison Avenue office.”

“LucidMedia has a unique base of proprietary technology, an impressive leadership team and a genuine opportunity to become a disruptive force in contextual online advertising,” said John Kohler, Chairman of LucidMedia’s Board of Directors. “The time is right for LucidMedia to invest in its strategic position and we look forward to working with the team to address the opportunities at-hand.”

“I have been watching LucidMedia for some time and am impressed by the company’s vision and execution, particularly in such a challenging economic environment,” said Bill Melton, head of Melton Investments. “The company’s unique approach to contextual advertising provides agencies, advertisers and other prospective clients with compelling ways to get the most out of their online spend.”

Zuberance, the leading provider of on-demand customer sales force software, today announced that it has raised $4 million in Series A funding from Emergence Capital Partners, the leading venture capital firm focused on early and growth-stage technology-enabled services companies. Gordon Ritter, general partner of Emergence Capital, joined Zuberance’s board of directors and the company will use the funding to expand its team and support product development, sales and marketing efforts.

“Word of mouth has always been the most powerful sales tool. Our solution harnesses the power of word of mouth to cost-effectively increase sales, generate leads and increase ROI of sales and marketing programs. By transforming highly-satisfied customers into a volunteer sales force, we’re offering a unique value to our customers,” said Rob Fuggetta, CEO of Zuberance. “The partners at Emergence Capital are known as the SaaS experts and we are thrilled to have them join our Board and help us build our business.”

Founded in late 2006, Zuberance offers a portfolio of customizable SaaS applications that enable enterprises to identify, mobilize, and track customer advocates. Zuberance’s unique applications enable customers to automatically publish authentic, advocate-generated content like reviews and testimonials to specific locations within shopping and review sites, to share promotional offers with friends and colleagues, as well as offers powerful management tools and real-time analytics.

“We were immediately impressed with the traction Zuberance has seen as companies are embracing the opportunity to give their customer advocates a voice,” said Gordon Ritter, general partner at Emergence Capital Partners. “With a solid team and extensive domain expertise, we are excited about the long-term potential for Zuberance.”

Zuberance customers are Global 2000 enterprises, as well as growing companies across multiple industries including automotive, consumer electronics, software, travel and tourism, eCommerce and business technology.

Gnip, an on-demand extensible messaging solution that is trying to standardize the way companies access and integrate the web’s data, today announced that it has closed a second round of financing. The investors in this $3.5 million round include Foundry Group, First Round Capital and SoftTech VC, all of whom also participated in Gnip’s initial seed round earlier this year.

Gnip will leverage its new funding to invest in the further development of its extensible messaging platform, to deliver new products and to develop additional partnerships where companies are building applications that benefit from the ability to easily access, filter and integrate business and social data from across the Internet. Learn more about Gnip, Inc. at http://www.gnipcentral.com.

Standardizing and delivering the web’s data

The Internet has always been social, and with the explosion of user-generated content and a corresponding growth in open web APIs there is an ever expanding amount of business and social data available that has been implemented in a vacuum using different markup, formats and protocols. Whether developers are trying to build a more dynamic social web experience or trying to integrate activity stream events and content into a custom web application Gnip provides a universal messaging backbone that makes it easy to access, filter and integrate data to build compelling business and social applications.

“Gnip provides a consistent and easy-to-implement interface for getting data from a variety of providers,” said Joseph Smarr, Chief Platform Architect, Plaxo, “We recently updated Plaxo Pulse using Gnip and have seen significant improvements; by moving from polling to pushing we get updates dramatically faster while simultaneously lowering the load on our servers and the services we crawl. It’s great to let Gnip worry about getting us the data while we focus on how to best present it to our users, and what new features to add on top of it.”

“The YQL platform provides a single endpoint service that enables developers to query, filter and combine data across Yahoo! and beyond,” said Jonathan Trevor, YQL Lead, Yahoo!, Inc. “Gnip is a perfect example of an enabling third-party service to include in the YQL table set since it provides a common interface to easily access, filter and post data from multiple web APIs and feeds of the most popular social media sites in use across the Internet.”

“We are very excited to work with customers and partners from across the industry to make it drop dead easy to help developers get the business and social data they need, when and where they need it,” said Eric Marcoullier, CEO and Founder, Gnip, Inc. “This new round of funding will be used to expand the breadth of solutions we can bring to market and allows us to aggressively expand the solution and content providers that are pre-integrated with the Gnip on-demand messaging platform.”

Everyone is talking about the layoffs occurring around the tech industry to companies like Pandora, Seesmic and Jive Software, however very few blogs are discussing the fact that companies are still raising capital successfully. Eventful announced that it has raised $10 million from lead investor Telefónica and existing investors, Draper Fisher Jurvetson and Bay Partners.  Eventful says that they will use the capital to extend its leadership position in the local events space through expanding sales and marketing, increasing its lead in the mobile channel and exploring international expansion opportunities.

Eventful’s international community of nearly 8 million registered users enjoys the world’s most comprehensive selection of local events through multi-channel programming including online, email, mobile and syndicated content. In addition to its online events search engine at www.eventful.com, Eventful engages users with over 40 million permission-based emails and 100 million widget views each month. Eventful’s unique Demand service is used by over 50,000 performers to connect with their fans and determine where to appear based upon local demand for events. Advertisers, strategic partners, venues and event promoters use Eventful to reach highly-targeted local consumers who share a passion for live events and entertainment.

“The strength and diversity of Eventful’s business, along with the proven ability of its executive team to create technologies that attract millions of users, make Eventful precisely the sort of investment we look for,” said Russ Shaw, Telefónica’s Global Director of Innovation. “Eventful has established itself as the clear leader in local event services, which we believe offer tremendous opportunity for growth throughout the world.”

“This round of financing will enable Eventful to enhance our services to existing and new users throughout the world and achieve profitability,” said Jordan Glazier, CEO, Eventful. “We’re pleased that DFJ and Bay Partners continue to share our vision of building a world-class company. Telefónica is an ideal partner with a great team and a global Internet and mobile footprint. We look forward to working with Telefónica to explore opportunities which will cement our position as the leading local events service in the world.”

“Eventful is achieving what very few companies succeed in doing, they’re taking a great consumer proposition and turning it into a successful business,” said Josh Stein, Managing Director at DFJ. “The management team and employees have done a great job with strategic direction and focused execution.”

“Eventful has focused on and succeeded in building the largest global selection of events and a passionate, engaged base of nearly eight million users,” said Neil Sadaranganey, General Partner at Bay Partners. “The team is also succeeding in developing Eventful into a built-to-last profitable business. We’re excited to continue supporting and participating in the company’s future.”

Twofish announced this week that it has secured a second round of funding to build out its exclusive Digital Resource Planning (DRP) solution, Twofish Elements. Elements is an economic infrastructure that unifies banking, inventory and commerce systems of online entertainment companies, allowing them to increase profits, better engage customers, and reduce fraud.

“Monetizing the social web doesn’t have to be so difficult,” said Lee Crawford, founder and CEO of Twofish. “The challenges in managing a retail or economic infrastructure are the same online as they are off. Offline companies use ERP solutions to provide an integrated view of complex business operations, and now, online companies can use the first-ever DRP solution, Twofish Elements, in exactly the same way.”

In the world of 24/7 digital commerce, businesses simply cannot thrive without the ability to respond and react to changes in real-time. The new investment from Triplepoint Capital, Rustic Canyon, and Venrock underscores Twofish’s relevance as the web increasingly moves towards more direct monetization models.

Twofish also announced two key hires that extend the company’s expertise in social networking and enterprise software.

Bill Grosso has joined the company as chief technology officer and vice president of engineering. Previously, he was CTO and vice president of engineering at Engage.com and vice president of engineering at Echopass. Grosso is a noted speaker and author of several O’Reilly books, and serves on the Board of SDForum.

“Bill brings a mix of technical depth and internet business acumen to the Twofish team,” Crawford said. “His time spent in social media and telco transaction processing are highly relevant to Twofish and our partners, and we are thrilled that he has chosen to join us.”

Duels and Baseball Boss are the first titles developed by Challenge Games. They’re free-to-play online games that combine the collectibility and trading associated with collectible card games (CCGs) and sports cards with the competitive aspects of massively multi-player games (MMORPGs) and the ease of access of community Web 2.0 applications. They are also unique in their asynchronous, short-form design, which allows them to be played in 5-15 minute increments rather than in long marathon sessions.

“Challenge Games is addressing a real need in the market,” said Eugene Yoo, Vice President at Globespan Capital Partners. “Short form, free-to-play, web-based games have the potential to pull new consumers into the category. And the engaging gameplay of their titles appeals to the active casual and hardcore gamer as well.”

“We believe this funding further demonstrates that we are bringing innovation and value to the gaming industry,” said Andrew Busey, founder and CEO of Challenge Online Games. “This funding will help us accelerate the growth of our business through the development of new games, explore partnership opportunities and potentially acquisitions.”

Duels and Baseball Boss are free to play. Gamers can collect items and cards within the game and trade them with other players. They can also sign up for VIP memberships for a small subscription fee, which provides additional benefits such as the ability to buy special items and cards to enhance the gaming experience.

To play Baseball Boss, visit www.baseballboss.com. To play Duels, visit www.duels.com or http://apps.facebook.com/duelsfb. For more information on Challenge Games, visit www.challengegames.com.

“After an extensive search, we are delighted to announce our new partners,” said Jeremy Lewis, president and CEO of Big Fish Games. “Together they share our vision for building a transformative entertainment company serving the international community of game developers and consumers.”

“Big Fish Games has a remarkably deep and talented management team and the company is uniquely positioned to capitalize on the worldwide growth of online interactive entertainment,” stated Mark Evans, general partner of Balderton Capital, who will join the Big Fish Games Board of Directors. “We, along with General Catalyst and Salmon River, are thrilled with the opportunity to partner with the Big Fish Games team and contribute to their rapid growth and market leadership.”

magnify360, a landing page optimization company, announced the closing of the Company’s first round of venture capital investment led by MHS Capital with participation by industry veterans who have also made successful investments in Blue Lithium (Yahoo!), Right Media and BetterPPC.

magnify360 provides a software-as-a-service (SaaS) platform that maximizes the performance and ROI of websites, microsites, landing pages and the marketing campaigns that point to them. In real-time, the magnify360 Platform automatically tests and serves the most effective site content, layout and page flow to drive each visitor towards purchase, subscription or other calls to action.

“magnify360 is revolutionizing the way in which businesses understand and market to their consumers and we are excited to be part of that vision,” said Mark Sugarman, Managing Partner of MHS Capital. “magnify360 has built an impressive customer base, as a result of its innovation and the dramatic impact that the Platform has on turning site visitors into leads and customers.”

magnify360’s portfolio of clients includes businesses within the financial services, telecommunications, software and retail industries. These clients have seen as high as a 23% increase in sales in three months, lift of over 715% within a single month and a 70% decrease in cost per acquisition (CPA) in six weeks, as a result of implementing the magnify360 Platform.

“After four years of research and development refining the product with our reference customers, Intuit, Citrix Systems and HSBC Bank, we felt it was time to aggressively grow the Company to meet the demand of customer inquiries. We chose MHS Capital for their powerful network of digital media connections, their excellent reputation among entrepreneurs and their successful track record of taking bootstrapped, profitable companies to the next level,” said magnify360 CEO and founder, Olivier Chaine.

For all the readers out there who write the nasty emails to me every time I say that the tech industry is currently in a bubble, I think I may have some proof.  Valleywag rescued a deleted blog post written by Sarah Carey. Carey moved to Palo Alto and served as “strategist to the CEO” for Cuil’s founder Tom Costello.  Companies that burn tens of millions of dollars on wasteful items such as personal trainers and business class flight for anyone/everyone and then produce an incredibly inferior product to what they market, are doomed to fail.  But the worst part is that these companies damage the entire market since VC’s will have to become tighter with their budgets and not supply as much funding to the companies that actually deserve it.  I’ve placed the deleted blog post below.  Sorry for the rant, but companies that practice this type of waste piss me off.

An Irish woman’s social, political and domestic commentary
17.06.08
Life in the Valley

Posted in Sunday Times Columns at 5:10 pm

Note: one of the ones that I had to let a few days pass before I could post it as I didn’t really like parts of it – especially the end – it seemed twee. Jet lag is the excuse. Still, already a couple of people said they enjoyed and emailed me. So for the record..here it goes…

I have a secret life. You may know me as a domesticated, rural housewife and while this is true, for the past year I have also tasted the life of an international software executive.
Last summer an old friend from college rang me from Palo Alto in California. He was starting a software company and wanted me to do some work for him. I tried refusing but he wasn’t going to be put off. “How long does it take to write a column?” he demanded. “Er, a day,” I replied. “And what you are doing the rest of the time? The boys are in a crèche aren’t they?”
“Well, only part time,” I defended, “and I have the house to manage. And the garden. I’m really very busy.” “Yes, very busy Sarah.”
A contract arrived which informed me I had just been appointed as a “Strategist to the CEO” of a fledgling company. That means I help him plot stuff, as he says himself. Fortunately, this plotting requires my presence in sunny California from time to time and on each trip I am amazed at the number of other Irish technology people I meet on their way to “the Valley”.

Silicon Valley is the name given to the southern suburbs of San Francisco that run about 150 miles down to the quiet town of Almaden where IBM has its research centre. At its heart lies Stanford University in Palo Alto, surrounded by the offices of many of the world’s greatest technology companies. It’s the undisputed global capital of high-tech. How did this happen?

Everyone’s got a theory. Some say that the DNA of Californians is embedded with the adventurous spirit of the first settlers here – the ones who followed the Gold Rush. John Markoff, a New York Times journalist, has argued in his book What the Dormouse Said that the mind-expanding virtues of drugs helped too. In California in the 1960s, hippies + acid = flower power. PhD graduate hippies from Stanford + acid = modern-day computing. Stanford graduates such as Messrs Hewlett and Packard set up here in the 1950s and within twenty years Xerox were inventing many of the technologies we use in every day computing.

Throw in the Venture Capital industry and soon the Valley filled with enormously rich geeks.

Irish people pop up everywhere in this unlikely environment. On the flight out, engineers and middle-ranking executives sit at the back of the plane while up the front there are the likes of Niall O’Connor from Limerick, the chief information Officer of Apple.

Other leading lights are John Harnett, also from Limerick,at Palm; Tony Redmond the chief technology officer at Intel, Brian FitzGerald at Intuit and Conrad Burke of Innovalight, a solar-energy start-up. The Irish have a history of emigration but from the mid-1980’s we started to churn computer engineers instead of civil engineers out of our universities. That’s when we stopped building skyscrapers and tunnels and started building semi-conductors and cutting edge software.

With all those stock options, Silicon Valley is a rich place. I stay in a hotel in Palo Alto and walk around to the office each morning, slowly adjusting to the fact that I am supposed to smile and greet fellow pedestrians and joggers. The tree-lined streets are perfumed with flowers and weirdly quiet. They have so much space here that buildings are low rise, mostly only two-storey and the noise of their huge cars is lost into the atmosphere.

The serenity is catching – I become conscious of my foot fall. People speak quietly, even the children. It’s beautiful, but surreal. You can’t help wondering if all the loud, crazy people have been rounded up and shipped into San Francisco.

The signs of an ailing economy are evident though. When I pop over to the Stanford Shopping Centre, there’s hardly anyone there. Hardly any staff either.

Hilary Keane works for Enterprise Ireland in their Palo Alto office, helping Irish software start-ups work on their pitches to the venture capitalists. She lives in the city and commutes to the Valley each morning. She pays $75 a week now to fill her 2 litre car, the smallest she could buy when she moved out here. Before you didn’t notice the price and now you do.

The result is that like in Ireland people are getting cautious though due to the software billions, this part of the US is suffering least.

In our little company there are about 25 staff, over a dozen of whom have PhDs. Attracted to Stanford from all over the world, these are some of the smartest people on the planet. Lunch is ordered in every single day. Huge fridges burst with snacks and drinks. Bowls of strawberries and muffins lie around the rest area.

The company pays for a personal trainer and gym membership for everyone. A doctor calls round each Friday, after the weekly barbeque, to see if everyone’s in good health. Employees drift in an out at times that suit themselves.

When I observed this behaviour first I was appalled and took my CEO friend aside. This was disastrous! His company would never succeed if he wasted money like this and didn’t crack the whip. He laughed. This is the way it works out here. You have to be nice to people.

Well if that was the case, he could be nice to me. I wasn’t going to fly home in the back of the plane. I summoned up the audacity to ask for business class travel and was granted it without hesitation. Knowing the cost of the ticket was over €2000, which is about $5 million given the current exchange rate, I had to walk around for 15 minutes afterwards chanting “I’m worth it. I’m worth it. I’m worth it”.

But am I worth it? What on earth was I expected to do amongst these doctorates and luminaries. Within minutes of my arrival it all becomes clear. They may know something about computers, but I know a thing or two about people. All the fancy programming in the world won’t convince people to use their product and they need me to figure out how to tell people what they do. I am a devotee of the Internet and email but nothing can replace coming out here and looking them in the eye. When you’re in the same room as someone, one look can explain far more than a phone call or email.

Officially then my job is to develop a communications strategy which simply means working out how to talk to people.

I’ve got a PhD in talking alright, and I appear to have talked my way into the American Dream. For the moment it is still a dream though. Then I tap my shoes and wake up back in Enfield. I have the best of both worlds. Theirs is good, but I confess, I’m glad I live in this one.