Author: Liz Gannes

It’s hard not to be intrigued by the bits of information that have filtered out of stealthy startup New Travelco. It’s from Expedia, Zillow and Glassdoor founder Rich Barton, along with other “early Expedians” including Greg Slyngstad, co-founder of VacationSpot and board member of Kayak. And it’s already raised $9.8 million from General Catalyst Partners, Ignition Partners and Benchmark Capital (where Barton is also a venture partner), and recently acquired TravelPost (a TripAdvisor competitor focused on hotels) from Kayak, giving Kayak equity in return.

So what is New Travelco doing? Barton tells us that the company is “re-thinking travel planning” given “the big travel sites were all conceived in a different era.” Slyngstad’s idea to buy TravelPost was actually the genesis of the company, according to Barton, who is serving as chairman while Slyngstad is CEO. TravelPost does accept user reviews but it’s more of an aggregator, parsing and combining hotel reviews from places like Yahoo and BedandBreakfast.com.

“Online travel is a massive space and will continue to evolve,” Slyngstad added via email. “When Kayak was launched in 2005, people were asking the same question about startup going against 4 very big, entrenched players. Kayak has built a sizable, highly profitable business and is now nipping at the heels of the big entrenched players.” Barton also pointed to the “heterogeneous” nature of the travel category as reason there’s room for another successful player.

In a sort of mission statement on its web site, New Travelco says it believes “The increasing power of transparency, connectivity, and mobility will continue to open new worlds to travelers and new channels for suppliers.”

As far as opportunities to innovate go, TripAdvisor, one of the original user-generated sites that’s actually owned by Expedia, is somewhat hip with the times — it has the requisite Facebook Connect integration and iPhone app, though there’s certainly more that could be done. In terms of trip planning, the current hotshot is TripIt, which offers nifty integrations to help travelers organize and access their travel information on the go. But it’s not the only one who does that; Kayak, for instance, recently added similar features to its popular iPhone app.

Related from GigaOM Pro (sub req’d):

What Twitter Airfare Sales Tell Us About Real-Time E-Commerce

As it’s grown, Twitter has tried to make sense of its overwhelming stream with features like trending topics — keywords that a lot of people are already currently tweeting about — and a suggested user list — a troubled effort that underwent revisions after charges of favoritism. Now, for the first time, the company is recommending individual tweets, by harnessing the power of its user base to algorithmically show which ones are interesting. The new Top Tweets account, which will be featured on a new Twitter home page that’s currently being tested, shares a small sampling of popular tweets.

Twitter spokesperson Sean Garrett gave us some more detail on the signals Top Tweets takes into account.

This algorithm looks at all kinds of interactions with Tweets including retweets, favorites, and more to identify the Tweets with the highest velocity beyond expectations. One thing to note is this is intended to highlight Tweets from all users and doesn’t favor those with large follower counts.

Most of the tweets that Top Tweets has retweeted (say that 10 times fast!) had already been retweeted by other users more than 100 times (though I did see one with only 47). That means it may not be particularly timely, since it retweets only after many others have done so.

The algorithm, of course, favors updates from celebrities. I’m pretty sure there isn’t a Wizard of Oz personally picking tweets behind the algorithmic curtain, since one of the launch-day Top Tweets is from the off-color account “bieberbangedus.” Top Tweets also picked a recent update from the lovable Canadian teen himself, an automated location status from the unmanned spacecraft Voyager 2, some words of wisdom the Dalai Lama and a deal from PriceGrabber.

There do seem to be two Top Tweets streams: one, of the account’s favorites, adds about 10 new tweets per hour. Then the account seems to pare those down and retweet every few hours. Of course, all that could change.

Top Tweets is current following “everyone!” on Twitter and has about 1,000 followers of its own. Existing users may find plenty of value in subscribing to the account and getting a sort of crowdsourced TMZ (after all, some real celebrities tweet way too much; a digest is a helpful feature). Twitter said in a blog post that the feature was created with new users in mind, in order to make Twitter more accessible to them.

With the new design, we’re intentionally featuring more dynamic content on the front page, revealing a sample of who’s here, what folks are tweeting about, and the big topics that they’re discussing. The homepage now features a set of algorithmically-selected top tweets that automatically appear every few seconds…People who internalize the value of Twitter understand the power of this simple medium. But it hasn’t been easy to make that value transparent or obvious for curious folks coming to Twitter for the first time.

Related content from GigaOM Pro (sub req’d):

How Human Users Are Holding Twitter Back

Google, Microsoft, AT&T, Salesforce.com, AOL, Intel, Loopt and numerous advocacy groups are asking the U.S. Congress to update its electronic privacy legislation in order to address new forms of surveillance and data collecting. The so-called Digital Due Process coalition members say they want to defend themselves and their users from forced sharing of their email, hosted documents and mobile location tracking.

The law in question is the Electronic Communications Privacy Act, which dates back to 1986, and whose designers didn’t anticipate activities such as email, mobile location tracking, cloud computing and social networking. Citing a “murky legal landscape” about how ECPA is applied, Digital Due Process is requesting four changes:

• Government access to private hosted communications should require a search warrant.

• Government access to mobile location data should require a search warrant.

• Permission to track call and email records should require judicial review.

• Subpoenaed information has to be for a specific individual unless approved by a judge.

Though the proposed changes might seem fair enough, CNET points out that they are at odds with the Obama Administration’s statements that mobile users shouldn’t reasonably expect to keep their location private.

For an in-depth look at the cloud computing industry, join us at our Structure conference in June here in San Francisco. In the meantime, for background on cloud computing and the law, see:

Can the Cloud Catalyze Change in International Data Laws?

As Cloud Computing Goes International, Whose Laws Matter (sub req’d)

One of the more interesting and fulfilling trends that’s picking up steam is that of using social technology for social good. On Tuesday, Giveo is launching a platform for corporations and foundations to accept donations from and engage with online donors, especially younger ones.

Giveo is modeled on the Pepsi Refresh Project and the Chase Community Giving campaign on Facebook, which invited people to vote to help the beverage maker and bank allocate millions of dollars in charitable donations, respectively. In Chase’s case, early this year it donated $1 million to grand prize winner Invisible Children, which received nearly 125,000 community votes.

“Our hope is that there’s a huge sector of small- to medium-sized business that don’t have resources or time to do this themselves,” said Giveo CEO Ed Messman in an interview on Monday. Giveo has already launched with the Las Vegas-based Verve Foundation, which is offering $1,000 to the best idea for helping keep area kids from dropping out of school.

Giveo is also offering a more general social-fundraising platform for creating communities around fundraisers and staying connected to donors. That product, directed towards non-profits and schools, is aimed at “turning customers into social advocates.” It is currently offered solely on the web as a branded and hosted product, but Messman said Giveo is working to integrate with other means of giving, for instance SMS donations via mGive. Giveo takes 1.5-2.5 percent of donations as its cut.

Giveo has raised $150,000 in angel funding from Grotech Ventures partner Joe Zell, and Messman said the firm expects to soon close a Series A round of $500,000. Its competition comes in many forms; for instance, the new non-profit startup Jumo from Chris Hughes of Facebook and the Obama campaign; Firstgiving, Causes on Facebook and Kickstarter. However, Messman points out that those services act more as middlemen, while Giveo allows customers to shape social giving around their own brands.

Related content from GigaOM Pro (sub req’d):

Could Activist-Style Micropayments Be a Real-Time Ad Model?

When given a choice of login systems, visitors to mainstream media properties such as Slate, Forbes, Newsweek, Discovery, Time and Press Enterprise are most likely to choose Yahoo, according to data collected by commenting system Echo, which helps power such sites. Over three months of login data on Echo’s 10 publishers, 34 percent of users chose to login with Yahoo, 25 percent with Facebook Connect and 23 percent with Google Friend Connect (found via paidContent). Twitter, which is only getting started with using its logins to authenticate around the web, had 10 percent, while the decentralized system OpenID had 7 percent.

This speaks to a long-term affiliation and trust for the Yahoo brand, as well as the fact that sites will have to integrate multiple login systems to accommodate different user preference. Chris Saad, VP of strategy for Echo, notes that some logins are actually OpenID or are powered by a combination of services, but he said the Echo data is based on the way it brands the services for users.

Yahoo itself is incorporating Facebook Connect and Twitter’s @anywhere platform to enable two-way sharing, with the strategy of trying to be an aggregator for the social web. But other sites may want to think about including Yahoo logins as well in order to socially integrate a more mainstream audience.

I’d be interested to see how data from other login integrators compares, so if you have relevant stats, please get in touch with me or leave a comment.

Related content from GigaOM Pro (sub req’d):

Four Lessons From Yahoo’s Slow Demise

What’s next for Google Buzz and Google Docs? The company’s moves in (and out of) China have rightfully been the news of the week, but meanwhile Google’s VP of product management for Apps (aka everything but search and ads) Bradley Horowitz answered entrepreneurs’ questions about Google products at a dinner in Palo Alto, Calif. last night hosted by investor and advisor Dave McClure.

Horowitz, who said the motto he’s given his team is “We build apps for people, not markets,” said though Buzz stumbled out of the gate, Google is fully behind it as well as the general idea of improving products by making them social. “We can’t care about Google’s goal of organizing the world’s information without talking about people,” he said. Those mottos and goals are well-placed, but now Google has to prove it can actually put them to work in its products — especially considering the failings of Buzz 1.0.

Some of the key items on Buzz’s roadmap include “feature-full APIs,” an expansion of who and what people can follow on the service, and better relevance tools, Horowitz said. “Ultimately we’d like to provide something that’s a tool for managing attention.” That would require a few tweaks. First, would be a notion of following that’s “less Boolean,” where you don’t have to get all or nothing of a person’s updates. Buzz will try to predict whether you’ll find information relevant rather than giving you everything. Horowitz commented to the voluble McClure, “that would allow me to get the parts of your life I’m interested in and filter out…most of it.”

Second, the notion of following would extend beyond friends and people to brands and places, just like it does on Twitter, where any entity can have a profile, said Horowitz. He seemed to imply that Buzz could be combined or integrated with Google Reader. And third, Buzz will attempt to be bring information together in a way that means you have to visit fewer “silos and inboxes,” with the goal of “the opportunity to return time to people’s lives.”

Horowitz said that Buzz may find a way to make use of its original idea of autofollow, which pre-populated users’ Buzz profiles with their contacts and was the most widely decried feature. “Autofollow was really misunderstood,” he said. When Google can do a good job of interpreting signals and connections, “If control is there then they will opt in.” He also said he felt users reacted so strongly to Buzz because Gmail is so important to them. His analogy: “Would you really want someone to try out their new algorithm on a pacemaker?”

Lastly, on the topic of Google Docs, Horowitz said to expect multiple new launches in the coming year. He noted that the product was cobbled together from a variety of acquisitions — like Writely, JotSpot and Zenter — and there are more opportunities for integration across document types. “In 2010 you will really see them hum in tandem.”

Related from GigaOM Pro (sub req’d):

Google Buzz’s True Home Is in the Enterprise

Photo (from a different event) courtesy Flickr user Boris Veldhuijzen van Zanten.

Don’t spend money on marketing, do offer flexibility and data exporting to eliminate buyers’ regret, make sure to capitalize on and value goodwill, and only charge for things that are hard to do. That’s what some startups say is the key to success in the freemium business. But the biggest reason the five presenters this morning at the Freemium Summit in San Francisco — Pandora, Dropbox, Evernote, Automattic (see disclosure at the bottom) and MailChimp — are doing well is because they have great products that people want. They’ve been able to get those products to a broad audience by using the freemium model — that is, offering a free service with the option to upgrade. It’s an increasingly important business model, but one that’s hard to navigate, so their anecdotes, open sharing of data, and lessons learned were really valuable.

Pandora’s reverse-freemium approach: Pandora first launched in August 2005 with something that sounds quite similar to freemium: users got 10 hours of free online radio at signup, after which they were asked to pay $36 per year. “In the first couple weeks we had 100,000 people come through and the vast majority listened to every last minute of their free ten hours,” said CTO Tom Conrad. “Then we asked them for their credit card and they would wander off into the wilderness.”

That November, Pandora switched on an “ad-supported” option. It was ad-supported in name only, however, because they had no ad server, no ad staff — not even a place on their page to put ads. But growth quadrupled overnight, and within three days, Apple called and asked to buy out ad inventory through December. Conrad and his team of course said yes, arriving at the price of $10,000 for the month. “We literally hard-coded the ads on the page,” he said. “We didn’t want them to know, but every time they changed their creative we’d have to relaunch the entire site.”

Pandora now has 20 million uniques and took in $50 million in revenue last year. Subscription rates had dropped to well below 1 percent of users. But 1 percent of a large number is still a large number, so last year the company launched Pandora One, a new take on premium with higher quality streams, a desktop app and fewer usage limits. It now has 300,000 subscribers, accounts for 1.6 or 1.7 percent of monthly uniques, and is expected to bring in 15 percent of 2010 revenue.

Dropbox’s numbers game: Dropbox CEO Drew Houston says you should know one thing about freemium: “It is a numbers game, so bust out your Excel spreadsheet. It’s all about finding things in the margins — lots of little things rather than one key thing.” Houston went into detail about the backup service’s attempts to recruit users through search marketing. The company found that obvious keywords like “online storage” were bid up, and the long tail of search terms had low volume. Then, people coming from search who actually signed up might not even pick the paid version (which has more storage and features).

Ultimately that meant “our cost per effective acquisition per paid user was thousands of dollars for a hundred-dollar product.” So for a time, Dropbox went to great lengths to hide the free option to users coming in through search, and as a result confused users and felt terrible. “So the big lesson there is if you adopt a freemium business model your marketing cost is the free users.” The fact was that Dropbox was offering a product that people didn’t know they needed until they tried, and “search is great for harvesting demand, not creating it,” Houston said.

Having dropped search marketing as a strategy, Dropbox has actually grown incredibly fast. At some point, the company realized that user referrals were its biggest source of growth, so now it encourages referrals with an incentive program. That increased signups by 60 percent, said Houston, and it now drives 30 percent of total signups. The company now devotes 30 percent of its engineering to acquiring active users.

Houston also told a second story about Dropbox’s realization that its unlimited undo history — available to free and paying users — was responsible for a huge and growing share of its costs. And further, few customers actually used the feature. “We said ‘holy sh*t!’ More than half of our hosting costs are going to deleted, not restored prior versions of files,” said Houston. The company was wary of rolling back a free feature, but was able to manage the transition without too much fuss by telling customers about it openly, and giving existing users the option to keep the feature if they liked.

Evernote’s key metric: Evernote, the personal note-taking service, faces a challenge to spreading virally in that it’s not at all a social product, said CEO Phil Libin. But what Evernote can focus on is deriving maximum value from the users it does have. The company, which launched in June 2008, has 2.7 million users, with 7,000 new users per day (mostly through word of mouth, despite the lack of social features, said Libin), and 50,000 paying users (who convert in order to use the service on multiple platforms and for other premium features).

The thing is, over time inactive users drop off, and active users start paying. Once Evernote finally figured that dynamic out and started talking about it, term sheets and partnerships requests started flowing in, Libin said. “Our key insight is users are growing really fast, but revenue is growing faster.” Currently, users are growing 10 percent per month and revenue is growing 18 percent. “It’s like our users are a fine stinky cheese or wine — it gets better with age,” said Libin. “More and more people who aren’t going to pay just leave, and more who stay pay.” So 0.5 percent of people who sign up in a given month go premium, but 2 percent of people who signed up a year ago are now paying Evernote.

Libin’s key metric is comparing revenue per active user with variable expenses. At this point, the company makes $0.25 per month per active user, and spends $0.09 on variable expenses like infrastructure, customers service and network operations. He said freemium can work for any business if you have 1) a great long-term retention rate, 2) a product that increases in value over time and 3) variable costs.

Automattic CEO Toni Schneider and MailChimp CEO Ben Chestnut added a few more key lessons in their talks. Schneider talked about the blogging-software company’s decision to offer a-la-carte freemium services instead of tiered levels, giving both his team and users more flexibility. His company now makes 40 percent of its revenue from premium services like domain mapping, with the remainder from ad sales and enterprise products. But he said the problem with this approach is customers may not know of services they could receive, because it’s harder to market them individually.

Chestnut talked about the fact that free products are ripe for abuse. His 10-year-old email marketing company started offering a free version seven months ago, and has seen 240 percent user growth, a 225 percent increase in email delivery volume from 200 to 450 million, and a 200 percent projected revenue increase. But the biggest bumps of all? A 354 percent increase in abuse-related issues like spamming, followed by a 245 percent increase in legal costs dealing people trying to game the system. Luckily, MailChimp was able to develop automated ways to discover and deal with some of these issues, but even as an anticipated side effect the increase in abuse from going freemium has been huge.

Photos courtesy of Flickr users Hillary H, gaborcselle and hzeller, respectively.

Disclosure: Automattic, maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

Gravity, a site aimed at fostering online conversations among people with common interests, became available to the public today. The company, founded by a trio of former MySpace executives and funded by Redpoint Ventures and August Capital, has built an easy-on-the-eyes, snappy forum platform. It promised in an interview in December with TechCrunch that the back end is a dynamic “interest graph” with deep analytics about people’s participation. Om, for one, thinks the company is just hoping to latch onto general tech industry excitement about big data. As for me, I’ve been checking out the site over the last couple weeks, so I can comment a bit about what’s available to users.

First of all, Gravity is organized around the gimmick of “worlds” (broad topics) that you can “orbit” (follow), while being hosted by a cartoon dinosaur named Amir. There’s some organization into categories but most everything is a chronological thread. You can navigate using a live-updated thread of things you’ve subscribed to, or use an index or search to find new topics. Users, who don’t have to use their real names, are rewarded for participation with badges.

So far, I haven’t found many deep conversations or enough breadth of topics to fit the topics for which I’ve searched. Many threads consist of people posting personal stories or pictures; one entertaining one was “awkward celebrity encounters.” The real-time alerts about conversations and people you’re following seem to be a big booster of discussion. I posted in a thread about the Vietnamese noodle soup pho, and got three replies within a few minutes. Nothing profound, but at least people appreciated my contribution.

Gravity for me is an interesting contrast to Quora, the Q&A site from former Facebook employees, which is also set up around common interests and discussion threads. That site, in keeping with its pedigree, requires real-name participation (though it allows anonymity on a per-contribution basis) and seeks a high level of discourse, with users hastily correcting each other for contributions that aren’t seen as productive. Quora’s founders say their ultimate aim is to create “canonical consensus” on a wide variety of topics.

It’s all very serious and schoolmarmish, but I really like it, because users hold themselves to a high standard of participation. So far, I prefer Quora to Gravity, mostly because the small private-beta community consists of people with good knowledge of topics I’m really interested in — like tech startups — who put time and thought into crafting contributions. For many of them, it’s a new sort of blogging platform. The reason I go back to Quora almost every day is because the conversations are great. I’m not sure that’s what the company intended when it set out to build a Q&A platform, but it’s a great by-product.

Gravity, on the other hand, could be great, but only if it grows to the point that it features well-threaded, organized and searchable conversations on an extremely wide variety of topics. And it strikes me that even more useful would be the ability to mine the web’s existing treasure troves of forums, communities and groups — all of which have terrible interfaces but contain tons of great knowledge. I know it might be more appealing and manageable to create a new “interest graph” platform from scratch, but people have been interested in stuff online for a long time.

Addicted to Groupon, LivingSocial, YouSwoop and TownHog (and the many other Groupon groupies), where the appeal of an amazing expiring deal snags you — but then you get busy and forget to ever print or use the coupon you bought? It happens to all too many of us. But now there’s a site — DealsGoRound — where you can buy and sell daily deals rather than let them go to waste.

DealsGoRound is a side project of Chicago entrepreneur Kris Petersen, and since beta-launching in 52 cities on March 1 has hosted just 30 transactions. Petersen tells us that he came up with the idea after letting a $160 pair of Segway tours of downtown Chicago expire because he was too busy with work and training for a marathon. “I realized my impulses didn’t always coexist with my calendar,” he said. The site doesn’t verify deals but it doesn’t take a cut of them, either; Petersen wants to monetize through advertising.

DealsGoRound bears a parallel to sites like Cardpool (our profile) and Plastic Jungle, which have emerged recently to buy and sell unused purchases in the $100 billion gift card market. Though interest (and venture funding) in Groupon-type businesses is exploding, it’s not there yet.

But other sites like 8coupons and Yipit have launched side services for daily deals too — aggregating and repackaging them on a map or an email, respectively. In a sense, these sites help grow the Groupon economy in that they increase distribution for deals, which are ultimately monetized by the companies that set them up when people purchase them.

Yipit, for example, sends a very nicely formatted email newsletter of all the deals in your local area, giving top billing to the ones in categories you’ve indicated you like. It’s the kind of thing that makes you unsubscribe from Groupon, losing their tight connection with you and their quantifiable recurring email recipient. After all, being a deal seeker isn’t about brand loyalty; it’s about finding the absolute best and most relevant deal as quickly as possible!

But these are young and evolving concepts. The folks at Yipit told me they’re trying to put together a local advertising network to sell highly targeted deals ads on local blogs and news outlets. As far as new businesses go, that certainly seems like a better and more scalable idea than creating yet another Groupon groupie with its own local ad sales team in every city.

When you read an interesting article or visit a new web site, it’s increasingly because a friend sent you a link or mentioned it online. And when you have a question about where to eat or what to buy, you ask your contacts on Facebook or Twitter, or head to a site like Yelp or TripAdvisor to seek the wisdom of the crowd.

This kind of behavior leaves a site like Google out in the cold. Google’s monetary metrics of success still trend in the right direction, but its “search, seek, and consume” model — the core of its business — is clearly threatened by the rise in popularity of online social activities that replace search. According to Hitwise, U.S. visits to Facebook.com surpassed visits to Google.com for the first time last week (that reportedly doesn’t include non-search Google properties). The search giant is plainly feeling the heat, as as seen in its recent rushed and botched rollout of Google Buzz, and by its purchase of Aardvark, a social search company started three years ago by former employees, for a reported $50 million.

So what does that mean for web advertising? You can’t just slap something like AdWords on a social site and expect it to monetize like search. It’s with that premise in mind that I took a deeper dive into social media monetization in a feature-length story for GigaOM Pro, our premium research service (a subscription is required). After dozens of interviews with companies in the space, I highlighted areas such as affiliate advertising, incentives, real-time engagement, local marketing and advertising, native ad formats and behavioral targeting. One trend that emerged is that brand advertising is often a better fit for social networks than Google’s sweet spot of performance advertising. But we don’t have a new AdWords-type product to turn all this social activity into gold — yet.

Companies mentioned in this story: Bunchball, eXelate, Appssavy, Facebook, Twitter, Yelp, TripAdvisor, VigLink, MyLikes, Shiny Orb, Vente-Privee, Hunch, OneRiot, Foursquare, Groupon, Digg. Read the full story here.

When I think Y Combinator, I think a couple of scrappy college dropout co-founders for whom living on ramen is more than proverbial and coding is life. They pitch an idea, come out to California, drink in some startupy goodness and maybe make something of it.

But that incubator model, now five years old and widely replicated, is changing. At today’s Demo Day, Y Combinator’s “here’s what I did with my three months” set of presentations given to a group mainly composed of angel investors, a quarter of the 26 participating companies already had funding in the bank in addition to what Y Combinator gave them, said co-founder Jessica Livingston.

Others in the group have funding committed in the form of term sheets, to the point where some were turning away investors. One, Cardpool, which Om recently profiled, declined to give out growth stats out of a stated concern that they would be too impressive and encourage competition. “We’re just about to close our round and we’re massively oversubscribed,” said the company’s presenter. Some angel investors grumbled to me that they felt left out of the party, having not had a chance to get their hands on the startups before today.

There were also quite a few Y Combinator presenters in Mountain View today who looked nothing like scrappy college dropouts. One, James Felix Black of video playlist creator Nowmov, was a former senior video software engineer for the iTunes Store at Apple, and owned up to being 38 and having a life of his own in San Francisco. Others ran through credentials like making BusinessWeek’s Top 25 Entrepreneurs Under 25 list or leading a part of the Obama campaign’s tech team. CHROMAom, a site devoted to color, said it gets 6.5 million page views a month, is profitable, and has been a Webby award nominee for best community on the web for the past three years running.

Zencoder, another presenting startup, powers cloud-based video encoding for On2, which was recently bought by Google. That’s a pretty huge hookup to have, especially on the eve of Google presumably releasing an open-source video codec to compete with H.264 and make HTML 5 video viable. So why did 2-year-old Zencoder join Y Combinator, I asked co-founder Brandon Arbini. He said because he’s from Madison, WI, and his co-founders are spread around the country. They did Y Combinator for the introductions to the Silicon Valley technology scene.

Nowmov’s Black said the same thing, gesturing to the nearby swarm of investors including Ron Conway and Ashton Kutcher. And there will be two more encore Demo Day sessions for additional investors tomorrow. Maybe it’s increasing confidence in the economy, maybe it’s that effervescent Silicon Valley frothiness, maybe it’s just that Y Combinator has had a nice string of exits like reMail and AppJet. Livingston said that one thing Y Combinator had done differently with this session versus others before it was to match companies with angel advisors for regular check-ins. Those relationships may not have become direct investments but often resulted in introductions to other investors.

But if you looked hard enough today you could still find an iconic young founder living by the seat of his pants. Daniel Gross, an 18-year-old Israeli, presented Greplin, a unified search engine for users’ personal data and communications stored in the cloud. Multiple investors told me they thought it was one of the most promising ideas they heard. But as was whispered by his cohorts at the reception after the presentations, Gross admitted to me that he was working on a completely different project until all of three days ago (I loved his crossed-out name tag, pictured above). He switched ideas, honed his pitch, is counting the positive response today as market research, and will now gun for an angel round. A web app should be ready by next week, he said.

Yahoo this week described itself to Forbes.com as “laser focused” on bringing local brand advertisers online. Meanwhile, Google’s director of mobile advertising, Diana Pouliot, told an audience at a CTIA-related event that a third of mobile Google searches are now related to the location of the searcher.

It’s no secret that local and mobile advertising are growth areas — Borrell recently projected that location-based mobile spending would grow to $4 billion in 2015 from $34 million in 2009 — but now both giants and startups are rushing to get their ducks in a row. Yahoo says it wants to bring on national chains like fast food restaurants that advertise regionally, but often spend just 1-2 percent of their budgets online. “Local display is about to take off,” Lem Lloyd, Yahoo’s VP of channel sales for North America, told Forbes.

At the same time, Google wants to expand advertising formats to accommodate local intent and incorporate interactive features like navigation. For instance, the company recently added in-stock local inventory indicators to mobile product search, similar to what Milo.com offers. Yet online ad categories are often won by new entrants, as was pointed out in a GigaOM guest column this weekend.

Now would be a good time for one of the hype-y mobile social networks like Loopt, Gowalla and Foursquare to cut a favorable ad deal — or something tighter than that — with Google or Yahoo.

Related research from GigaOM Pro (sub req’d):

Location: The Epicenter of Mobile Innovation

Foursquare asks users to share their real-time locations, which means that as it’s grown, some of the more avid ones have been voluntarily telling thousands of people where they are. In my opinion, such an intimate service is best used with people you actually know, but Foursquare is deviating from its core of one-to-one relationships today to create the notion of “Celebrity Mode.” The feature comes through a partnership with MTV and VH1, one of many Foursquare has signed in recent months. It’s a direct parallel to Twitter, where celebrity users lead the way (and the reason so many companies are signing these Foursquare deals seems likely to be because they don’t want to miss the next Twitter).

Foursquare is now trying to have it both ways, offering one-to-one friend relationships (where both users must confirm to be connected) as well as one-to-many follower relationships (where users can get updates from any public profile they like). Facebook also straddles this line with its fan pages for brands and celebrities.

DJ Pauly D of “Jersey Shore” will be the first to use Foursquare’s modified celebrity mode, which promises his followers access only to his tips left at certain locations — aka “the best fist-pumping spots nationwide.” He can choose to send each check-in to only his inner circle or to both his friends and followers. Users who don’t happen to be nearby Pauly D’s location can go to his profile on Foursquare’s web site to check out what he shares publicly. You’d think they’d have awarded him an in-game badge or two just for playing along, but no, his profile reports, “DJ Pauly D hasn’t unlocked any badges yet.”

MTV says the deal will also include “dedicated Foursquare programming” and location-based sponsorship, with integration into other reality shows such as “The Hills” and “The T.O. Show.”

Related content from GigaOM Pro (sub req’d):

Monetizing the Social Web Isn’t One Size Fits All

Not so long ago, calling something “Web 2.0″ increased its value. It meant fresh, new, interactive, responsive. Now, if someone uses that term you know they’re woefully out of touch.

For me, it’s been a trip to re-adopt my former web beat on GigaOM after spending a few years writing for our sister site NewTeeVee. I made the leap to the world of web video in the fall of 2006, when YouTube had just been bought, Facebook had just opened to the general public, and only a few people cared about a little service called Twittr.

Since then, one thing that’s gone by the wayside is the term “Web 2.0,” which got its start as a marketing phrase to build a conference around, and spawned both a new class of companies and sites dedicated to writing about them, such as TechCrunch and Mashable. TechCrunch, whose original tagline was “tracking Web 2.0,” itself declared the death of the term in February 2009, citing a perceived drop in the number of pitches mentioning it. Indeed, while the AJAX-y web services and user-generated content at the core of Web 2.0 haven’t gone anywhere, now the preferred term seems to be “social media.” Google Trends says that search volume for “social media” surpassed “Web 2.0″ right in the middle of January this year, though the new hotness has yet to reach the heights of “Web 2.0″ circa 2007.

Feel free to chalk it up to a matter of trendy semantics, but here are the material differences I see between these two mini-eras:

Building for the Mainstream

These days, starry-eyed entrepreneurs are building for the mainstream, not just for themselves. One of the reasons I was happy to leave the GigaOM Web 2.0 beat the first time around was that I didn’t want to write about yet another social bookmarking service trying to copy the innovative but narrowly used Delicious (then spelled del.icio.us, which kind of says it all). Sure, one of the best ways to come up with something truly useful is to build something you yourself want, like a repository for saving all the web sites you visit — and as Twitter has proven, niche products can evolve to satisfy the needs of those beyond just early adopters. But some of the most exciting new services online today are aimed at serving broader interests, such as the search for deals (Groupon, Gilt Groupe), and procuring real physical products and human services (Alice.com, Sears’ ServiceLive).

I think MySpace and Facebook deserve a lot of credit for bringing the Web 2.0 era to the mainstream, helped along by major portal offerings like Gmail. Those services and products continue to provide value to a broad audience. On the flip side, startups like Foursquare and the many folks who pitch us on, say, tweaks to Google Reader aren’t building with Middle America in mind. They may get there eventually, but not just yet.

All the World’s a Platform

The rise of platforms, app stores and mobile makes web applications better, more accessible and more useful. Facebook, with its platform launch in 2007, showed the value (and eventually, the dangers) of building on top of someone else’s pre-existing audience, making use of inherent viral channels and the continuity of experience provided by a popular platform. The distribution power of the platform was huge.

Then the iPhone App Store came along, offering far more functionality and exposure to developers (if they could get through its approval process). On the user side, just about every web app is better when it rides along in your pocket, ready when you need it. The iPhone and all the knock-offs and competitive one-ups it has inspired are tremendously popular. And as a corollary, the benefits of the mobile app platform model is now so obvious that the number of them grew to 38 from eight in the span of 2009 alone, according to new research.

The Most Obvious Answer

Of course, the one thing that affected every business, web or otherwise, was the economic downturn. However, Web 2.0 startups — until of course their funding ran out and/or they had to layoff employees — seemed woefully out of touch with the rest of the world.

Valleywag, which never missed a chance to declare something dead, might have actually been right when in it ran with the headline “It’s the end of Web 2.0 as we know it” in reference to a carefree music video released by Web 2.0 entrepreneurs cavorting in Cyprus to the tune of Journey. It was October 2009 2008. Their timing was pretty bad.

Meanwhile, one of the sectors hit hardest by the downturn was the media, which was already being brought to its knees by its failure to adapt to the web. Now, your Facebook newsfeed really is your hometown paper (though its investigative reporting skills may be limited to relationship status changes), and Twitter really is your personal real-time newswire. And accordingly, social media referrals from sites like Digg and Twitter are increasingly important to media business models — and sites like Facebook and YouTube are among the most-trafficked, and therefore most powerful, on the web.

Maybe “social media” just sounds less like a buzzword or a brand name than “Web 2.0,” while at the same time pointing to a sort of social facelift for all content — a feature that can be included or integrated into everything on the web, rather than being segmented in its own category. Or perhaps it was the futile attempts to brand disparate things “Web 3.0” that made people realize how silly the naming convention was. But “social media” has its issues, too. As Aliza argued earlier this month on WebWorkerDaily, many new web tools are just useful, not necessarily social. Perhaps what was wrong with “Web 2.0″ was that the term implied a fixed version — while it’s cute, the metaphor of a software upgrade doesn’t carry over very well in reference to something that changes every day. Innovation on the web is fluid and builds on itself, and that naming convention just got stale.

Middle photo and post thumbnail courtesy of Flickr user chegs.

Please see the disclosure about Facebook in my bio.

Formspring.me, the fascinatingly simple and popular personal Q&A site, has raised $2.5 million from a top-shelf list of angel investors: Baseline Ventures, Freestyle Capital, SV Angels, Maples Investments, Chris Sacca, Dave Morin and Kevin Rose. The site, which launched exactly 113 days ago, as Formspring.me President John Wechsler tells us, has had 50 million unique visitors in the last 30 days and facilitated the answering of more than 300 million total questions.

Formspring.me was spun out of FormSpring.com (which is now rebranding itself as FormStack to avoid confusion) last fall, after the Indianapolis-based company noticed 30,000 people had signed up for its free accounts in order to invite people to ask them questions. “We set out to give these users a product that would do what they were already doing, but make it simpler to do it,” said Wechsler, who along with the company’s four other employees is moving out to San Francisco to pursue the startup. (“The moving trucks are literally in town now.”)

The Formspring.me product is still quite simple, enabling users to create a page inviting people to ask them anything, even anonymously. Wechsler said the company’s first priority is keeping up with infrastructure demands; it currently has some 200 quad-core servers and is adding more all the time.

Wechsler described Formspring’s value proposition as such: “We’re bringing conversation to the social web. Instead of putting the onus on you to think of something to say, our platform really lends itself well to a conversation.”

Next up on the company’s product road map, as soon as it gets its infrastructure under control: an API, a mobile app, an Adobe AIR app and a web-based app, said Wechsler.

The “location wars” between rival mobile check-in services, the unmet expectations of the Twitter keynote and the hordes of newbies crowding out regulars (as they do every year) were some of the leading threads at SXSW this year. And — rightfully so — everyone was talking about them. Meanwhile, from the outside, skeptics pooh-poohed geeks getting drunk on promo budgets while pretending that changing the world had anything to do with why they were there. Also fair. But somewhere in between those two takeaways fall my three highlights from SXSW, which I think showed us the way social technology will work in the near future:

• While the competition among location-based services will hopefully result in a winner, loser or combination thereof sooner than later (because honestly, who cares), using either Foursquare or Gowalla in Austin this past week was a really cool experience. Rather than seeing scattered updates from the few friends you have who happen to avidly use social media, at SXSW location-based services were able to take a larger-scale pulse of where people were moving. So as you walked down the hall, the wisdom of crowds would tell you that 300 people were listening to a session in Ballroom D, or that 200 were already drinking over at Six Lounge. Sure, that just pushes hordes towards hordes, but it also reveals a vibrant ecosystem — and felt completely different than using mobile social sites at home.

• It was totally awesome to have reliable and quick AT&T phone service and mobile Internet. As I tweeted on my first day in town, “My breakout stars of #sxsw so far: excellent, ubiquitous Wi-Fi and great AT&T service. No joke.” And trying to use my iPhone upon returning to San Francisco has made it all the more obvious how awful we have it by comparison. It’s no fun to be a second-class mobile citizen after you’ve gotten a taste of what could be. I completely support MG at TechCrunch’s take: “Dear AT&T, Whatever You’re Doing At SXSW, Please Do It In San Francisco.”

• You’ve undoubtedly heard horror stories about exposing the backchannel of audience conversation during conference panels and how that detracts and distracts from the core content. But I had a really excellent experience engaging with tweets during the panel I moderated. First of all, the crowd helped direct us to choose a less unwieldy hashtag than the one assigned — #contentme instead of #contentrelevanttome. Then I kept a Twitter search page open to see what people were saying. When the tweetstream was drowned out by fun facts about coincidences on Hunch given by panelist Hugo Liu, the company’s chief scientist (for instance, if you tell Hunch you like to dance, there’s a very high correlation that you’ll also say you like using Macs), it got harder for me to pick out audience questions. So I asked them to direct the questions to me by mentioning @lizgannes in a tweet. When I got too many questions to process, I was able to choose the ones that had been retweeted by other people on Twitter (who may have not even been in the room).

That’s kind of a long story, but the point is that I hadn’t actually planned to do any of it. But because so many people in the room were using Twitter at the same time, we were able to use it to better tweak the panel on the fly in order to address their needs. (Though I did feel afterwards that I should watch a video of the panel; multitasking is damn hard!)

Top photo courtesy of Flickr user schatz.