Author: Mathew Ingram

LinkedIn unveiled enhancements to its sharing features this morning that make it easier for users to post links and images to their LinkedIn groups and others that are connected to them on the service. Now when users post a link, an excerpt and any image attached to the item are automatically added, and other users can see who shared the content when it shows up in their streams. Links and content that others have shared can also be “re-shared,” and the service has launched its own URL shortener.

If these enhancements sounds familiar, it’s probably because they’re virtually identical to the way sharing and re-sharing works on Facebook and other social networks such as Google’s Buzz. They may be nice additions, but at this point, how much is copying Facebook really going to help LinkedIn?

The business-oriented network has been trying to get more social over the past year or so, by adding Twitter integration, as well as opening up its application programming interface (API) so that outside developers can integrate LinkedIn content. But for the most part, it still feels like a place where people primarily go to check the work history of a contact or possible hire, or if they’re looking for a new gig, to post their own. Despite LinkedIn’s best efforts, it doesn’t seem like a place where users are going to be sharing a lot of links.

Will these new features and enhancements change that? Perhaps. But it feels more like a copycat move than anything really revolutionary. Why not provide more ways for people to enhance their profile, by doing things like hosting discussions around an issue, or providing content in some way that helps illustrate their expertise in a subject? That seems more like something in which LinkedIn’s core user would be interested. It’s not that sharing links isn’t a good feature to have, I’d just like to see the service focus on the things that make it different, rather than duplicating those of Facebook.

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Hiring at venture-backed startups picked up speed in the first quarter of this year, according to figures released by the National Venture Capital Association (NVCA) and job board StartUpHire.com. A total of 13,314 jobs were posted by startups on the web site in the first quarter — an average of 4,400 new positions each month — and a 16 percent increase since the end of 2009. The report is another indicator that the pace of hiring is starting to recover in the technology sector, after a downturn caused by the recession and other economic factors over the past two years.

There have been other recent signs that the technology job market could be turning around: Google told analysts in its earnings conference call last week that it hired 768 new employees in the first quarter, and Chief Financial Officer Patrick Pichette said it expects to “continue hiring aggressively through the year.” Intel has also said that it plans to hire between 1,000 and 2,000 people this year, its first major hiring wave in five years, and Cisco is planning to expand its workforce by 2,000-3,000 employees. LinkedIn has also been hiring, adding 154 people already this year, and Twitter has boosted its headcount to 170 from about 45 in the past year and says it plans to continue hiring.

Meanwhile, a report released recently by the Silicon Valley Leadership Group said that tech sector hiring is definitely picking up. Over half of companies surveyed said they expect to see job growth in their sector, compared with just 17 percent the previous year. Although the demand for talented technology employees could make it harder for startups to compete for those hires with larger firms like Google and Intel, the NVCA report seems to show that venture-backed startups are managing to grow regardless. And that growth is important for the overall economy: A report published last year by the Kauffman Foundation found that startups are a key driver in job creation.

Related content from GigaOM Pro (sub req’d): What the VC Industry Upheaval Means for Startups

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Open vs. Closed. In many ways, it’s a battle that has been at the heart of the technology industry for most of its modern history. Open systems vs. closed systems. Open web vs. walled garden. Open source vs. proprietary standards.

Being open is seen by some as a defining principle of the web and the embodiment of much that is good about technology, whether it’s Wikipedia or Apache web servers or the Android operating system. Those who choose the opposite approach, however, argue that some kind of central control is necessary, and even beneficial for consumers, especially as our increasingly digital world gets more complex. And right now, both sides could be said to be winning, in the sense that both open proponents like Google and proprietary advocates like Apple are attracting users and generating revenue.

Over the next few weeks, GigaOM and its sister sites will be exploring this crucial debate through essays and a series of interviews with thought leaders on both sides of the equation.

Advocates of open say their approach is best because it maximizes creativity, by allowing the greatest number of people to contribute to a project. Open standards, they say, also allow startups to develop new products and services rapidly and cheaply, because they don’t have to wait for a single controlling entity to give its approval, and they don’t have to pay licensing fees. The closed model, according to critics such as Harvard Law School professor Jonathan Zittrain, leads to situations like the one that Kindle owners found themselves in last year, when Amazon deleted a book they had bought without even asking their permission (ironically, the book was George Orwell’s “1984″).

Defenders of the proprietary, however, believe that the open model creates chaos, maximizes error and leads to lowest-common denominator design and usability. Freedom from centralized control, they say, results in an absence of standards (or a profusion of competing ones), as well as a lack of discipline and accountability. Central control makes it easier to roll out features and keep a handle on errors, while proprietary standards allow developers to work faster and more efficiently, because they don’t have to support multiple formats or guess where the next upgrade patch is going to come from.

In the world of operating systems, this tension exists between Windows, which is seen as the embodiment of everything centralized and proprietary, and open solutions such as Ubuntu and (more recently) the Chrome OS from Google. In the mobile world, the biggest battle is Apple vs. Google: the latter has the open-source Android operating system, with a totally open app store and development process, while Apple not only controls the code behind the iPhone, but is also notoriously controlling when it comes to its app store, routinely rejecting apps without saying why, and restricting the features they can have — and even the kinds of content they can include.

And yet, as writer Steven Johnson noted in a recent piece in the New York Times, Apple has been more successful than anyone could ever have imagined, despite the fact that it routinely thumbs its nose at the “open is better” crowd. Johnson writes that:

Next to the iPhone platform, Microsoft’s Windows platform looks like a Berkeley commune from the late 60s. And yet, by just about any measure, the iPhone software platform has been, out of the gate, the most innovative in the history of computing.

The same tensions are being played out elsewhere. Facebook has become one of the world’s largest social networks, but not by being open — or at least, not as open as some other web services. Although it provides access to some of its features (such as Facebook Connect) via its API, and is happy to suck information into its service from wherever possible, it is notoriously reluctant to allow much information to flow in the other direction. It controls the terms of service and restrictions on games and other apps with an iron hand, and reserves the right to change its terms on a whim.

In the world of video, meanwhile, there’s a battle underway between Adobe, which controls Flash, the de facto video delivery standard for the web, and (ironically) Apple, which has refused to support Flash on either the iPhone or the iPad and instead has been pushing developers and media distributors towards the open-source HTML5 standard. Meanwhile, on the networking hardware side, Cisco, which has been a vendor using proprietary code for most of its life, has been struggling to find ways to deal with the appetite for open-source solutions in high-speed networking, video conferencing and voice-over-Internet services.

This tension between open and closed runs across many different sectors, and exposes issues that are crucial to the evolution of the technology industry. We hope you will join us in exploring them over the coming weeks.

Blogging platform Tumblr has raised another round of financing from its existing venture backers, Spark Capital and Union Square Ventures, putting additional pressure on the three-year-old company to start generating some revenue — something Union Square partner Fred Wilson says the startup is now focusing all of its attention on. The $5 million funding was what is known as an “inside round,” in that no new investors joined the financing group, and brings the total raised by the startup to $10 million. Generating revenue could be a tall order, however, given that co-founder and CEO David Karp has said that the company is “opposed to advertising.”

Karp, who is 23, made the comments to the Los Angeles Times last week, adding that the idea of putting ads on Tumblr pages company “turns our stomachs.” Instead of relying on ads, which many other publishing companies depend on for revenue, Tumblr has been experimenting with charging users for add-ons, including professional-quality themes and other features. The site considered a premium version of its service called Tumblr Plus that would have incorporated some of these features and enhancements, but rejected that idea based on feedback from investors, according to the LA Times. Tumblr competes with other blogging platforms such as Posterous and WordPress (see disclosure below).

Meanwhile, Fred Wilson suggested in comments on a blog belonging to entrepreneur Scott Rafer that the latest financing round will be Tumblr’s last for a while, and that the company is now focused on maximizing revenue. After Rafer suggested that multiple rounds from the same group of investors tends to put pressure on startups to “optimize for growth, not cash flow,” Wilson responded sarcastically that this “sure didn’t work out very well for jack, ev, and biz — nor did it work for zuckerberg or pincus either,” referring to the founders of Twitter, Facebook and Zynga respectively. Wilson added that “some businesses should be allowed to scale and that takes capital — going for revenues and profits too early in some businesses is a mistake.” Tumblr has grown fairly rapidly over the past year, and now brings in more than one billion pageviews a month.

Rafer also said that while the founders of Tumblr might want to “dream the big dream,” funding such a company beyond two rounds requires that it be “super hot for revenue not to matter,” and that the founders were “playing it way too risky.” But Wilson responded that “revenue is coming in nicely now” and that the recent financing “will be it, given the focus on revenues.” Now all David Karp and his team have to do is come up with some.

Disclosure: WordPress 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.

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The World Bank, which tracks everything from mortality rates and education levels to CO2 emissions and livestock production in hundreds of countries around the globe, is opening up its data, including removing all of the pay walls around information that used to require a subscription fee. The agency has also launched a new web site where it’s making all of the information from dozens of its global databases and surveys available for browsing or download. The Bank said that it’s “challenging the global community to use the data to create new applications and solutions to help poor people in the developing world.”

The data at the World Bank site includes more than 2,000 indicators related to economic well-being and global development, including some that the agency has been accumulating for 50 years. The data is available in Arabic, French and Spanish as well as English. The agency said that it plans to launch an Apps for Development competition in the next few months, which it hopes will lead to tools, applications and mashups that use World Bank data to help global development.

“I believe it’s important to make the data and knowledge of the World Bank available to everyone,” World Bank Group President Robert Zoellick said in a statement. “Statistics tell the story of people in developing and emerging countries and can play an important part in helping to overcome poverty. They are now easily accessible on the Web for all users, and can be used to create new apps for development.”

The Bank’s new open data initiative includes information from the annual World Development Indicators report, which tracks close to 1,000 stats related to global development, as well as the results of other surveys done by the agency, including the Global Development Finance report, Africa Development Indicators, Global Economic Monitor and indicators from the Doing Business Report. The Bank said that it will be adding further databases in the future.

Here’s a video of World Bank president Robert B. Zoellick talking about the agency’s new project:

Privacy authorities from 10 countries this morning released a joint letter at a conference in Washington, D.C., that takes Google to task over the way it released its social tool, Google Buzz, saying the launch “betrayed a disappointing disregard for fundamental privacy norms and laws.” The group also said that the privacy problems associated with the new service, which went live in February, should have been “readily apparent” and that it isn’t the first time the company has “failed to take adequate account of privacy considerations when launching new services.” The letter noted that Google’s Street View service has also been the subject of privacy-related complaints from multiple countries.

In an emailed response, a Google spokesperson said: “We try very hard to be upfront about the data we collect, and how we use it, as well as to build meaningful controls into our products. Of course we do not get everything 100% right — that is why we acted so quickly on Buzz following the user feedback we received. We have discussed all these issues publicly many times before and have nothing to add to today’s letter.”

The letter — the full text of which is below — was signed by the heads of data protection authorities in Canada, France, Germany, Ireland, Israel, Italy, the Netherlands, New Zealand, Spain and the United Kingdom. The group is scheduled to hold a press conference later today in Washington about the statement, which called on Google “like all organizations entrusted with people’s personal information, to incorporate fundamental privacy principles directly into the design of new online services.” The fundamental problem with Buzz is described this way:

Google Mail, or Gmail, had been a private, one-to-one web-based e-mail service, but was abruptly melded with a new social networking service. Google automatically assigned users a network of “followers” from among people with whom they corresponded most often on Gmail, without adequately informing those users about how this new service would work or providing sufficient information to permit informed consent. These actions violated the fundamental, globally accepted privacy principle that people should be able to control the use of their personal information.

This joint effort by multiple countries is only the latest in a series of attacks Google has faced over Buzz. Not long after the new service was launched in February, the Electronic Privacy Information Center asked the FTC to open an investigation into privacy concerns surrounding Buzz, and that was followed in March by a similar request from a bipartisan group of lawmakers from the House of Representatives. Although Google CEO Eric Schmidt has said that “no one was harmed” by Buzz, project manager Todd Jackson later apologized for the way the product was launched, and the company has made a number of alterations to the way it functions, including a new confirmation screen for users so they can confirm what they wish to share and with whom.

Privacy concerns have also dogged Google in Europe, where Street View has come under fire from European Union regulators as well as privacy authorities in a number of countries such as Germany. Some authorities want the company to provide better notice to citizens of when the Street View car will be filming them, as well as a way for individuals to have themselves removed from the snapshots after they’re taken. Google has also faced serious repercussions in Italy, where three senior Google executives were found guilty in February of breaching Italian privacy regulations as a result of a video that was uploaded to YouTube.

The privacy regulators who released the letter today were meeting in Washington for the annual global summit of the International Association of Privacy Professionals. The full text of the letter follows:

April 19, 2010

Mr. Eric Schmidt
 Chairman of the Board and
 Chief Executive Officer
 Google Inc. 
Mountain View, CA 
USA 94043

Dear Mr. Schmidt:

Google is an innovative company that has changed how people around the world use the Internet. We recognize your company’s many accomplishments and its dramatic impact on our information economy. As data protection regulators mandated to protect privacy rights, we also applaud your participation in discussions in many jurisdictions about new approaches to data protection.

However, we are increasingly concerned that, too often, the privacy rights of the world’s citizens are being forgotten as Google rolls out new technological applications. We were disturbed by your recent rollout of the Google Buzz social networking application, which betrayed a disappointing disregard for fundamental privacy norms and laws. Moreover, this was not the first time you have failed to take adequate account of privacy considerations when launching new services.

The privacy problems associated with your initial global rollout of Google Buzz on February 9, 2010 were serious and ought to have been readily apparent to you.

In essence, you took Google Mail (Gmail), a private, one-to-one web-based e-mail service, and converted it into a social networking service, raising concern among users that their personal information was being disclosed. Google automatically assigned users a network of “followers” from among people with whom they corresponded most often on Gmail, without adequately informing Gmail users about how this new service would work or providing sufficient information to permit informed consent decisions. This violated the fundamental principle that individuals should be able to control the use of their personal information.

Users instantly recognized the threat to their privacy and the security of their personal information, and were understandably outraged. To your credit, Google apologized and moved quickly to stem the damage.

While your company addressed the most privacy-intrusive aspects of Google Buzz in the wake of this public protest and most recently (April 5, 2010) you asked all users to reconfirm their privacy settings, we remain extremely concerned about how a product with such significant privacy issues was launched in the first place. We would have expected a company of your stature to set a better example. Launching a product in “beta” form is not a substitute for ensuring that new services comply with fair information principles before they are introduced.

It is unacceptable to roll out a product that unilaterally renders personal information public, with the intention of repairing problems later as they arise. Privacy cannot be sidelined in the rush to introduce new technologies to online audiences around the world.

Unfortunately, Google Buzz is not an isolated case. Google Street View was launched in some countries without due consideration of privacy and data protection laws and cultural norms. In that instance, you addressed privacy concerns related to such matters as the retention of unblurred facial images only after the fact, and there is continued concern about the adequacy of the information you provide before the images are captured.

We recognize that Google is not the only online company with a history of introducing services without due regard for the privacy of its users. As a leader in the online world, we hope that your company will set an example for others to follow.

We therefore call on you, like all organisations entrusted with people’s personal information, to incorporate fundamental privacy principles directly into the design of new online services. That means, at a minimum:

• collecting and processing only the minimum amount of personal information necessary to achieve the identified purpose of the product or service;

• providing clear and unambiguous information about how personal information will be used to allow users to provide informed consent;

• creating privacy-protective default settings;

• ensuring that privacy control settings are prominent and easy to use;

• ensuring that all personal data is adequately protected, and

• giving people simple procedures for deleting their accounts and honouring their requests in a timely way.

In addition to respecting these broad principles, we also expect all organisations to comply with relevant data protection and privacy laws. These laws apply online, just as they do in the physical world. As well, we encourage organisations to engage with data protection authorities when developing services with significant implications for privacy.

As your users made clear to you in the hours and days after the launch of Google Buzz, privacy is a fundamental right that people value deeply.

As regulators responsible for promoting and overseeing compliance with data protection and privacy laws, we hope that you will learn from this experience as you design and develop new products and services.

We would like to receive a response indicating how Google will ensure that privacy and data protection requirements are met before the launch of future products.

Sincerely,

Original signed by
Jennifer Stoddart Privacy Commissioner of Canada

Original signed by
Alex Türk
 Chairman, Commission Nationale de l’Informatique et des Libertés (France)

Original signed by
Peter Schaar
 Commissioner, Bundesbeauftragte für den Datenschutz und die Informationsfreiheit (Germany)

Original signed by
Billy Hawkes 
Data Protection Commissioner of Ireland

Original signed by
Yoram Hacohen 
Head of the Israeli Law, Information and Technology Authority

Original signed by
Francesco Pizzetti
 Garante per la protezione dei dati personali (Italy)

Original signed by
Jacob Kohnstamm
 Chairman, College Bescherming Persoonsgegevens (Netherlands)
Chairman, Article 29 Working Party

Original signed by
Marie Shroff 
Privacy Commissioner, New Zealand

Original signed by
Artemi Rallo Lombarte
 Director, Agencia Española de Protección de Datos (Spain)

Original signed by
Christopher Graham
 Information Commissioner and Chief Executive (United Kingdom)

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Google has been stepping up its lobbying game in Washington, according to documents filed with the Senate Office of Public Affairs, which tracks the behavior of lobbyists. A non-profit agency called Consumer Watchdog (formerly known as the Foundation for Taxpayer and Consumer Rights) noted the filing in a news release today, saying the company was relatively new to the “influence-peddling game” but that it is now “one of the highest rollers in Washington.” According to the group, Google boosted its spending in the first quarter by 57 percent over the previous year, to $1.3 million, and spent over $4 million in total on lobbying efforts last year.

Google has been fighting a number of battles in Washington recently, including recent complaints to the FTC that Buzz, the social networking tool it launched in February, may have breached privacy laws. Google has also been struggling to overcome criticism of its proposed AdMob acquisition, which some believe could give the company too much market share in digital advertising. The Federal Trade Commission has been reviewing the $750 million acquisition deal for months.

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Demand Media, the company some have criticized as an automated “content factory” because it uses algorithms to produce content that might appeal to advertisers, is widely rumored to be heading for an initial public stock offering that could value the 4-year-old startup at more than $1 billion. Has all that talk gone to CEO Richard Rosenblatt’s head? Some of his recent tweets — as well as some news about a couple of high-profile additions to the Demand board of directors — suggest that he might be going a little Hollywood. One of the new faces in the boardroom, for example, is Peter Guber, the former head of Polygram and former chairman of Sony Pictures, who gave us blockbusters such as “Batman” and “Flashdance.”

So what does a former movie studio chief bring to a venture like Demand Media? The company does video production through its Demand Studios unit, but its focus is primarily on short pieces that can either get quick hits on YouTube or instructional videos that fit with its content at sites such as eHow.com — how to replace a toilet, and so on. Not exactly Hollywood-style entertainment (Demand also has a written-content arm that produces hundreds of stories a day, and owns a media-publishing tool called Pluck). In a press release issued by Demand announcing his appointment, Guber says:

As someone who’s always understood the power of the narrative for attracting audiences, I believe Demand Media has discovered a new and largely untapped story telling platform on the web. As part of its Board, I look forward to helping unlock this value and drive innovation online, using the insight and experience I bring from the entertainment industry.

But as paidContent noticed, the connection with Guber goes a little further than just a seat on the board: Rosenblatt also mentions on Twitter that he and Guber had breakfast on Sunday, followed by a tennis game with the Hollywood mogul, as well as someone named Semel — likely former Yahoo CEO Terry Semel, also a Hollywood studio veteran.

Rosenblatt also mentions in recent tweets that he had dinner with film producer Brian Grazer and comedy legend Rob Reiner at Nobu the night before (Nobu is a famous Hollywood hangout), and promises to “get Brian on Twitter tomorrow.” The Demand CEO also apparently spent at least part of the evening debating the value of the iPad with former supermodel Cindy Crawford (he adds later that “cindy did not like the iPAD and i did; she thought just a big iphone with no service; i think convenient and travelable”). The socializing may not be all that surprising, considering Demand is based in Los Angeles, but it still seems like an odd pairing, that of the company that’s commoditizing media from all angles and the old media veterans whose margins are rapidly dwindling as a result of that same process.

Previous articles about Demand have mentioned the CEO’s penchant for hanging out with stars and starlets such as former bikini model and “Dancing with the Stars” emcee Brooke Burke, as well as Tour de France winner Lance Armstrong. Both also have connections to Demand — Burke’s site Modern Mom uses content produced by Demand Studios, and her partner in the company is Lisa Rosenblatt (Richard’s wife), while Armstrong is an investor in Demand, which provides content for his Livestrong.com site.

Is any of this going to help Demand Media ring up a billion-dollar IPO, or create a sustainable business from its automated content-generation process? That’s hard to say. But it sure sounds like a fun life for the company’s CEO. And just to show that he’s not all play and no work, Rosenblatt notes on Twitter that “silly people keep saying demand media is ‘reviled;’ NO ONE who knows us has ever said that so its odd that it keeps showing up,” and adds later that “100mm people/month love our properties, 7,000 freelancers/month love making a living; oh yeah, and our 450 branded partners love our tools.”

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IBM Research has launched a companion service to its Many Eyes data visualization service called Many Bills, which provides a visual interface for federal legislation. The company says the idea behind the project is to make it easier to understand complicated bills that run into the hundreds of pages and often have unrelated amendments tacked onto them by  Congress. IBM’s algorithms parse each bill (the service currently just has legislation from 2009) and then color-codes sections of them based on topics. The service even includes a “confidence score” so that readers can decide for themselves whether its categorization process got it right or not.

The visual interface takes a little getting used to at first. Each bill is laid out in a long, vertical stream with different colors used to identify different categories, but the discrete parts of the bill are difficult to see because there are hundreds of them, so they are relatively tiny. When you click on one, it expands to a larger view, with annotations about the section and what it relates to, the different terminology used, etc. It would be nice if there were another way to go through the pages, such as a slideshow, as the default view with hundreds of tiny colored sections is a little hard to navigate.

The venture seems like a positive one, however, and has been applauded by the Sunlight Foundation – a non-profit agency that promotes transparency in government — which said that it sees “a lot of potential for this project.” TechPresident, a blog affiliated with the Personal Democracy Forum, said that while the service is far from perfect, it’s valuable because it helps — even in a small way — to make the federal legislative process more understandable. You can follow the project’s progress via the Many Bills Twitter account.

Although it’s not designed specifically for federal legislation, Many Bills is somewhat similar to DocumentCloud, a project started by Aron Pilhofer of the New York Times’ interactive team and funded by a grant from the Knight Foundation, a non-profit that invests in journalism. Organizations can upload documents and the service scans them and extracts keywords so that they can be searched and filtered. Both DocumentCloud and the Many Bills project are attempts to use machine learning to help people make sense of complicated documents, and heaven knows we can use all the help we can get.

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The Icelandic volcano eruption that stranded hundreds of thousands of travellers in Europe and elsewhere on Friday showed no signs of letting up on the weekend, continuing to belch a plume of ash that covered much of the European continent. Airlines — which by Friday evening had already canceled more flights than at any time since the attacks of September 11 in New York — were still refusing to take bookings for new flights into next week, stranding passengers for days without connecting flights. Some took matters into their own hands: comedian and actor John Cleese, for example, hired a taxi to take him from Norway to Belgium, at a cost of almost $7,000.

Others turned to Twitter and Facebook to try and find rooms for the night, or alternate travel plans involving boats, trains and other forms of transportation. In addition to the hashtag that had quickly come to be used after the eruption on Friday — #ashtag, which continued to gain steam — another also started to take hold on Saturday: @getmehome, as well as #roadsharing and #stranded. Travellers asked for accomodations, others offered them, and groups helping those stranded co-ordinated their actions using social tools, including the Roadsharing site.

Some, like Rita J. King, CEO of Dancing Ink Productions, blogged their predicament. Others shared photos of their surroundings, or of the volcano itself, including an incredible image of lightning forking through the clouds of ash. Someone even set up a Twitter account for the ash cloud, which had over 1,000 followers by the end of Saturday. Information is Beautiful chose to look on the bright side and calculated the positive side of the lack of airplane traffic, and First Round Capital decided to have an impromptu meeting with startups, since some of the firm’s VCs were stuck in Europe by the ash cloud. The New York Times has a map of all the affected airports, which it is updating regularly as new reports come in.

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Hiring activity in the technology sector is heating up rapidly, according to the Wall Street Journal and other sources in Silicon Valley. Companies such as Google, Intel and LinkedIn are adding staff at a rapid clip, and say that they intend to continue doing so over the next year. That’s good for the tech sector, which has been struggling to rebound after a downturn caused by the recession, and it’s good news if you’re an unemployed engineer or developer. If you’re a startup, however, you now have to worry about competing for staff in a rising labor market, along with your other concerns, such as staying in business, paying your phone and power bill, and so on.

On Thursday, Google told analysts on its earnings conference call that it hired 768 new employees in the first quarter, and that it expects that rate to continue, if not accelerate. “We expect to continue hiring aggressively through the year,” Google Chief Financial Officer Patrick Pichette said. Intel has also said that it plans to hire between 1,000 and 2,000 people this year, its first major hiring wave in five years, and Cisco is planning to expand its workforce by 2,000-3,000 employees as well.

On a smaller scale, LinkedIn said it’s already hired 154 people so far in 2010 after adding 184 people last year, and Twitter has boosted its headcount to 170 from about 45 in just the past year and says it plans to continue hiring. Technology recruiting firm SC Palo Alto, which places about 100 candidates a year with small and midsized companies in Silicon Valley, told the Journal that right now “it’s common for us to have an engineer with the right skills talking to three or four companies at a time.”

Is this a sustainable move in the job market? It’s a little early to say for sure. As recently as February, the economy in Silicon Valley was said to be “sputtering,” according to a report by two Valley non-profit groups. “We show no evidence that the recovery has arrived,” Russell Hancock, chief executive of one of the groups, told the New York Times. But a report released today by the Silicon Valley Leadership Group said that hiring is definitely picking up, according to the San Jose Mercury News. Over half of those companies surveyed said they expect to see job growth in their sector, compared with just 17 percent the previous year.

For startups, however, that not only puts the squeeze on the available talent pool, but also pushes the price of labor up. Which is fine if you are Google, or Facebook or even Twitter and you have lots of venture capital dollars to spend. But for those still crammed into a two-room apartment with the server in the kitchen, the days of finding talent easily — and cheaply — could soon be over.

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Bit.ly is healthy and growing, says John Borthwick of Betaworks, which created and then spun off the URL shortener, even despite the fact that it’s no longer the default shortener used by Twitter. The messaging service broke off its formerly close relationship with Bit.ly in December, and CEO Evan Williams told developers at the Chirp conference in San Francisco this week that it will be developing its own URL shortener. As Twitter has been moving in on features and services developed by outside companies — either by developing its own or by buying them, as it did with iPhone app Tweetie — concern has been growing about the fate of so-called “hole fillers” in the Twitter ecosystem, and Bit.ly’s name has routinely been mentioned as one of the doomed.

Borthwick, however, who co-founded Betaworks and has invested in and/or founded Twitter tools such as Summize (which was acquired by Twitter) and Tweetdeck, says in a blog post that Bit.ly “is growing and continues to scale” despite the fact that Twitter “pretty much stopped using bit.ly to shorten URLs on Twitter.com in December.” He says that Twitter.com now represents less than 1 percent of Bit.ly links that are shortened, compared with between 3 and 8 percent before the “transition” was made in December. Borthwick says that the relationship with Twitter worked well “during a period of hyper growth” but that both sides have effectively moved on. His blog post has the feel of someone writing a note to an ex-girlfriend after they have decided to break up and see other people:

We thank Twitter, everyone there, for the kick start it gave bit.ly. And we certainly hope we helped Twitter during a difficult scaling period.

Some have suggested that Bit.ly has been “screwed” by Twitter, but Borthwick describes this as “noise.” If the traffic numbers provided are accurate (and there’s no reason to believe they aren’t), it seems that Bit.ly has been able to leverage its close relationship with Twitter, and has sufficient scale and reach now that it’s no longer dependent on the social network for its business. Borthwick also says that the company’s Bit.ly Pro service, which recently launched a $995-a-month enterprise version, is growing rapidly.

Borthwick, who holds shares in Twitter as a result of the company’s acquisition of Summize, also talks about the somewhat tense relationship between Twitter and its ecosystem, saying:

Talk about holes and filling holes in platforms is misleading at best… Innovation — building great companies — is about finding, filling and even creating holes. But entrepreneurs shouldn’t — and most don’t — focus on filling holes in other people’s platforms — they should think about how to build great things — things that in 2010 may be bootstrapped on platforms but great products, products that people love, products that move people to organize their world differently, or to see the world differently.

When Twitter and Bit.ly created the relationship in early 2009, Borthwick writes that Bit.ly “knew this would be a short-term agreement — it was done to help Twitter scale and without a doubt it helped bit.ly scale.” However, the Betaworks partner says that when Twitter decided to stop using Bit.ly “the change was barely noticeable.” Twitter’s web site now accounts for less than half a percent of the Bit.ly links that are created or clicked on in a day, he says, and there are “other social platforms that are now larger than Twitter.com,” although he doesn’t name them (likely Facebook is a major contributor).

Borthwick says that last month there were 3.4 billion clicks on Bit.ly links, compared with 2.7 billion in February and 2.5 billion in January — and notes that on Wednesday the company passed a new milestone, that of 150 million Bit.ly links clicked in a single day. The company has also had 7,000 companies sign up for its Bit.ly Pro service, effectively a white-label product that allows web sites and other services to create their own URL shorteners. Publications that use the service include the New York Times, the Huffington Post, Foursquare, Pepsi and NPR.

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Cpedia, an attempt to create automated encyclopedia-style articles from search results, was recently launched to less-than-enthusiastic reviews (including one from me). The encyclopedia was created by Cuil, a search engine that also got a less-than-positive response from users and reviewers when it launched in 2008. You might think that after the rhetorical beating Cuil (pronounced “cool”) took when it emerged into the world, founder Tom Costello might have developed a thick skin when it comes to criticism. But you would be wrong. In a long blog post responding to the bad reviews for Cpedia, the Cuil CEO — who created the search engine with his wife, former Google executive Anna Patterson — lashed out at his critics, calling them “vituperative” and “haters.”

Costello suggested that most of the criticisms came from writers who searched for their own names, but just aren’t that noteworthy, saying:

“Cpedia does very badly with people who write much more on the web than people write about them. Given the 1 billion people on the web one might think this unlikely, but it happens. When we try to summarize the information mentioning these people, we run into a problem. Almost none of it is about them. It’s about random things they have opined on. Dave Parrack, Farhad Manjoo, Louis Gray, I’m talking about you.”

The other complaint (which was the central point of my post) was that the entries simply didn’t make any sense, even when they were about someone well-known enough that there was plenty of information to pull together. In response, the Cpedia founder launched into a bizarre description of how the Christian Brothers who taught him Irish when he was a child used to beat him with straps until he got his vocabulary right, and how his Irish was technically correct but had no “blas.” That’s apparently an Irish term for the polish that players of the Irish sport of hurling get on their sticks after playing for a long time (I’m not sure that’s correct though — Wikipedia says the top of the hurling stick is called the “bas,” and an Irish dictionary says the word “blas” means “taste”).

Costello also says that what Cpedia is doing is not trying to pull together all the information about a topic and make sense of it — he says it’s trying to find the undiscovered, unique pieces of information, such as the fact that a VC he was meeting with apparently “has a tendency to over-imbibe.” Because the encyclopedia’s engine removes duplication, “unique ideas have more chance of coming to the top,” he says. And finally, Costello says that Cpedia “has errors” and that this is “intentional,” because “we have tried to be inclusive, and dredge to the bottom of the web.”

So if what you’re looking for is an automated encyclopedia entry that doesn’t make sense of things, intentionally has errors, and dredges the bottom of the web, then Cpedia has got what you need.

Some commenters on our post and on Twitter said that criticizing Cpedia was unfair, and that, as Hunch co-founder Chris Dixon put it, the company was trying to solve an interesting problem. And there’s no question that trying to turn search results into automated, encyclopedia-style articles is a hard problem. Will Cpedia get better and eventually solve that problem? Perhaps. But it’s a long way away from that right now.

Post and thumbnail photos courtesy of Flickr user acordova

Launchpad LA has chosen 10 startups to participate in its second annual mentorship program, among them an online resource for genetic information, a cloud-based publishing network, a game design company, a Hispanic wedding service and a next-generation shopping platform still in stealth mode. Launchpad LA’s mentorship program is six months long and brings together venture capitalists and experienced entrepreneurs from Southern California to provide advice and skills to help startups succeed. In order to be eligible, companies must not have raised any institutional venture capital and be located in or willing to relocate to Los Angeles.

Here’s the full list of the winners:

• AccessDNA –- an online consumer resource for genetics that combines information about genetics with tools that can help individuals identify personal disease risk.

• AwesomeBox –- currently in stealth mode, AwesomeBox has created a marketplace for Flash sales.

• Circle Street -– a cloud-based platform for merchants to publish to multiple distribution networks, including social, mobile and email.

• DataPop -– is building a platform that enables real-time creation and delivery of ads to consumers on a massive scale.

• Gendai Games -– develops game creation technologies enabled by the social web.

• Gyroscope Technologies –- is working on a mobile retail commerce platform.

• Laughstub -– helps consumers find live comedy shows with local listings, user reviews, video previews and more.

• MOVIECLIPS.com -– a premium online video destination.

• Para Ti Novia -– a wedding web site for the Hispanic market.

• ShopNation –- currently in stealth mode, ShopNation is working on a next-generation shopping platform.

Post and thumbnail photos courtesy of Flickr user jurvetson

Ning, in a dramatic about-face, is shuttering its free social networking platform to concentrate solely on fee-paying networks and cutting 40 percent of its staff. Jason Rosenthal, who became CEO in mid-March after Gina Bianchini left, said in an email to employees that he’s “taken a hard look at our business in the 30 days since I became CEO, and I’ve decided to focus the company 100 percent on our paid networks business.” Rosenthal said that the free part of Ning would be phased out “soon,” and that existing networks would either have to convert to paying for the premium service or “transition off Ning.”

The shift from mostly free to 100-percent paid is a major strategic shift for Ning, which gained a lot of media attention not just because of co-founder and ex-CEO Marc Andreessen, whose former company Netscape Communications helped usher in the modern web era, but also because — in contrast to the “walled garden” approach taken by Facebook — Ning’s free platform provided a place where anyone could build their own social network. But Ning’s recent move is also a sign that the much-hyped “freemium” model might not be the road to riches many seemed to think it was.

The obvious implication from both the shutdown of Ning’s free offering and the staff reduction — not to mention the speed with which Rosenthal is making the change, and without communicating it to the company’s networking users beforehand — is that Ning couldn’t sustain its business at that level. Is that a sign that the “social networking for all” phenomenon was simply not workable? If nothing else, it suggests that providing free services (in the hope that some users will pay) doesn’t scale at the rate Ning and its investors were hoping it would. And there’s no question that some big bets have been placed on the company: last year, it raised another round of financing that gave it valuation of $750 million.

Rosenthal said that Andreessen and his venture fund Andreessen Horowitz would “work diligently with everyone affected by this to help them find great opportunities at other companies.” The Ning CEO alsosaid that within the next three months, the company would launch “the next generation of Ning, which will include a range of new premium features and services for our Network Creators, a new mobile experience, and a new set of APIs.”

The response from network creators has not been pretty, to say the least. The first comment on the Ning Networks blog post about the changes says:

What the hex!? This better be a late April Fools joke! I thought I found something great and now I have to cancel all my networks because Ning wants MONEY! I’m not made of it and Ning’s the only platform that actually gives you your own social network. In plain English, this idea sucks, and I hope it’s just a bad joke!

Below is the full text of Rosenthal’s letter to employees:

Team,

When I became CEO 30 days ago, I told you I would take a hard look at our business. This process has brought real clarity to what’s working, what’s not, and what we need to do now to make Ning a big success.

My main conclusion is that we need to double down on our premium services business. Our Premium Ning Networks like Friends or Enemies, Linkin Park, Shred or Die, Pickens Plan, and tens of thousands of others both drive 75% of our monthly US traffic, and those Network Creators need and will pay for many more services and features from us.

So, we are going to change our strategy to devote 100% of our resources to building the winning product to capture this big opportunity. We will phase
out our free service. Existing free networks will have the opportunity to either convert to paying for premium services, or transition off of Ning. We will judge ourselves by our ability to enable and power Premium Ning Networks at huge scale. And all of our product development capability will be devoted to making paying Network Creators extremely happy.

As a consequence of this change, I have also made the very tough decision to reduce the size of our team from 167 people to 98 people. As hard as this is to do, I am confident that this is the right decision for our company, our business, and our customers. Marc and I will work diligently with everyone affected by this to help them find great opportunities at other companies.

I’ve never seen a more talented and devoted team, and it has been my privilege to get to know and work with each and every one of you over the last 18 months.

We’ll use today to say goodbye to our friends and teammates who will be leaving the company. Tomorrow, I will take you through, in detail, our plans for the next three months and our new focus.

Post and thumbnail photos courtesy of Flick user Darren Hester

Bootup Labs, a Vancouver, British Columbia-based startup incubator, has been caught in the middle of a firestorm in the last day, after one of the entrepreneurs who was accepted into the group’s Y Combinator-style program wrote a blog post saying that he and his co-founder had their dreams dashed and were left penniless as a result of promises that Bootup Labs made and couldn’t keep.

The blog post hit Y Combinator’s Hacker News discussion board and drew a ton of comments, including some from Bootup founders Danny Robinson and Boris Mann. They also commented on entrepreneur Jamie Martin’s original blog post, saying he had distorted the events and was making the incubator look worse than it was. Mann has also written a blog post in response to the allegations. Meanwhile, Bootup released a statement saying that it has brought in venture investor Boris Wertz as a board member, and had received funding from both Wertz and Growthworks, a Canadian venture fund.

According to Jamie Martin’s version of events, he and his partner were accepted into the Bootup Labs program and were promised funding for their service (known as Status.ly), only to be told after they had moved across the country that there was no money and they would have to leave the program. He says they were attracted by the favorable terms that Bootup Labs was offering, compared with other startup incubators such as Y Combinator. Bootup reportedly said that startups could receive C$100,000 ($99,950) over an eight-month period in return for a 5-10 percent equity stake in the company, while other incubators were only offering between C$5,000 and C$15,000 per founder over period of 3-6 months (there are more details on Bootup’s approach here, including several responses from Bootup Labs).

A few weeks ago, however, Bootup co-founder Danny Robinson told the company they had no money to offer them, Martin claims. Four of the seven other companies in the incubator were also told that they would not be funded. Martin says in his post that while there were some good aspects to the experience, it also “screwed me up pretty bad financially for the next year or so. I have thousands of dollars worth of receipts I’m just going to have to count as a loss now.” He also says that he has some advice for other startups in a similar situation, which is:

If you’re a Startup, and you’ve been accepted into one of these incubators, be sure to get some sort of paperwork done where money is provided, or proof of income is shown, or something. No matter how nice the people seem, and how badly your heart wants your business to succeed, don’t get yourself into a similar grey-area/possibly unethical situation.

In his post about the incident, Boris Mann says he was “disappointed” by Martin’s description of events, but admits that he is sorry that things worked out the way they did. “I can say that I know I broke a personal commitment and that I feel like [sh**] about it and have already said my ’sorrys’ in person,” he writes. The Bootup Labs blog post, meanwhile, refers to “some hard choices” that the incubator had to make. In a nutshell, the group says it had to cut some of its member companies because funding did not come through as expected.

We had informed our 2010 cohort when they arrived that it was going to take a little while to close the fund because of some new canadian venture regulations that we had to abide by, and because one of our investors was unable to fund when we made a capital call. It was outside of our control, unintentional, and communicated immediately.

It took two months to recover but eventually realized that we were going to have a limited fund in the beginning of the year, and we had to make some hard choices. Either starve everyone with partial funding, or reduce the portfolio and fund them fully? We made the decision to cut the cohort to 3 companies, from 7.

It seems clear from both versions of events that Bootup Labs made promises to a number of the startups in its program — including signing term sheets with numbers attached, according to one source with knowledge of the program — even though it did not have the funds available. When it failed to get the funds in time, or to get as much as it required, it had to cut some of those companies. Bootup Labs obviously sees this as an unfortunate event, but one that was unavoidable and was communicated to the member companies as quickly as possible.

Some startups and entrepreneurs clearly think it goes a little further than that, however: They feel that Bootup should have been more forthcoming about its financing difficulties from the beginning, and not held out false hope to people like Jamie Martin. Either way, Bootup likely has some work to do to repair some of the damage from this affair. I’ve asked the founders for a comment and will update this post if I get one.

Post and thumbnail photos courtesy of Flickr user Erica Marshall

Where I’ve Been, a company whose Facebook application lets users chart their travel plans and discuss them with friends, has gotten an additional round of funding from the co-founders of Groupon, a group-buying service that reportedly just closed its own round of funding valuing the company at $1.2 billion. The money raised by Chicago-based Where I’ve Been is somewhat smaller than that, however, at $750,000. The company — which was widely rumored to have been acquired by TripAdvisor for $3 million in 2007, in a report that turned out to be false — raised $1 million in 2008 from Chicago-based Sink or Swim, which was acquired last year by TD Ameritrade.

The latest round of financing came from an entity called Lightbank, a recently formed investment vehicle created by Groupon founders Eric Lefkofsky and Brad Keywell. Where I’ve Been says that it will use the money to “aggressively expand” its current user base of 9 million registered users, who the company says have shared close to 500 million “travel intents” or travel plans on the application’s interactive map. Users can share either trips they have taken or plan to take, then discuss them with their friends and other Facebook users. Lefkofsky said that Where I’ve Been “has enormous potential to change the landscape of the travel industry.”

According to the company’s release, Groupon President and COO Rob Solomon sits on the Where I’ve Been advisory board, and was formerly a partner at Technology Crossover Ventures, as well as president and CEO of SideStep and a senior VP at Yahoo.

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At its first-ever developers conference — known as Chirp — which is being held in San Francisco today, Twitter co-founders Biz Stone and Evan Williams provided some hard numbers behind the growth and size of the social network. Here are some of the most important ones we’ve collected so far:

• 105,779,710 registered users

• 3 billion API calls a day

• 175 employees

• 600 million searches per day

• 300,000 new users per day

• 180 million unique visitors per month

• 37 percent of active users use Twitter on their phones

• 75 percent of traffic comes from outside Twitter.com

• 100,000 registered applications

Thumbnail photo courtesy of Flickr user lrargerich

The White House, after reaching out to scientists for their views on what big ideas the government should tackle, is now asking average citizens to speak up about federal priorities, and one of the ways they can provide their ideas is through Twitter. In a post on the official White House blog, Thomas Kalil — the deputy director for policy for the White House Office of Science and Technology Policy — described what the government is calling the “Grand Challenges of the 21st Century” project. In addition to emailing ideas to the White House, citizens can post their ideas as a response to the White House Twitter account @whitehouse with the #whgc hashtag.

The Grand Challenges project started with a call to scientists in February, which wrapped up submissions earlier this month. Then the administration turned to Expert Labs to help it reach out to everyday U.S. residents for ideas. Expert Labs is a non-profit public policy venture run by Anil Dash, formerly with the blog software maker Six Apart, that’s associated with the American Association for the Advancement of Science and is being funded by a grant from the MacArthur Foundation. Dash (who is speaking at Twitter’s Chirp conference today in San Francisco) described the effort in a recent interview with TechPresident. Among other things, he said that the goal of Expert Labs was to “improve the decisions policy makers make, by giving them the tools to tap into crowdsourcing in the same way that private companies do every day.” As he explained:

So instead of trying to fly 20 PhDs into a room in DC, we think a perfect situation would be for the White House to ask on Twitter and Facebook, “Hey, what are some of the important scientific breakthroughs we should be focused on?” What’s the next moon landing or human genome sequence? And instead of working from a set of a few hundred ideas, maybe 100,000 people will have a response to that, an answer. And Expert Labs can provide the technology to collect those answers, give policy makers tools to filter them out, and we can publish the responses for anyone in the public to analyze.

In order to collect and sift through the messages from those with big ideas, Expert Labs is using software called ThinkTank, a kind of Twitter-aggregation and filtering tool built by former Lifehacker editor Gina Trapani. So far, many of the suggestions are fairly obvious: cure cancer, develop hyrdrogen fuel, create a manned colony on Mars, build a space elevator, construct a high-speed rail network across the U.S., repair or reconstruct the ozone layer, etc. It’s not clear how Expert Labs will find the jewels amongst all the dross coming from Twitter — a problem the Obama government has had with other crowdsourcing experiments in the past — or how much influence they will actually have on what projects the government decides to take on.

As bizarre or outlandish as some of the ideas might be, however, it’s still fascinating to see a government using these tools to engage directly with its citizenry. The prospect of a White House having an official blog or Twitter feed — or even knowing what a hashtag is, let alone how to use one — would have seemed equally bizarre and outlandish not that long ago. The Obama government has used crowdsourcing tools of various kinds for a number of projects, including the OpenGov initiative, which was powered by Ideascale, and allowed citizens to post ideas and upload videos arguing for the ideas they thought the administration should tackle (as it turned out, legalizing marijuana was the No. 1 most-voted for initiative). The Grand Challenges project seems like yet another tangible example of how Barack Obama is the “Internet president.”

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Maybe it’s the onset of spring, but there seems to be a wave of funding announcements in the air, including a whopping round for collective-buying service Groupon that reportedly gives the company a $1.2 billion valuation. In the news today are two companies that have not only raised money from venture investors, but also provide services that revolve around money: Lending Club, a non-bank financing community that allows people to borrow from other members, closed a Series C round valued at $24.5 million; and DebtGoal, which provides online tools for people to manage and reduce their debt load, closed a Series A round of $2 million.

Lending Club’s financing came from Foundation Capital, along with existing investors including Morgenthaler Ventures, Norwest Venture Partners and Canaan Partners. The company, which connects investors and credit-worthy borrowers and says that it has 79 percent of of the U.S. peer-lending market with more than $8.5 million in loans funded every month, argues that its non-bank structure provides lower rates for borrowers and provides investors with higher returns. The company takes a 1 percent handling charge on every loan, and doesn’t guarantee any of the loans.

The company recently announced that it had surpassed $1 billion in loan demand, hit a monthly record in loan applications in February and issued its 10,000th loan, having now matched people who have received more than $95 million worth of loans since the company was founded in 2006. Prosper, the company’s main competitor, said earlier this year that it has arranged a total of $190 million in loans in its history and has close to one million members.

As Liz reported in December, the peer-to-peer lending sector got a new lease on life recently, when the House of Representatives included an amendment that would see regulation of the sector moved from the Securities and Exchange Commission to a new banking regulator. The SEC had required P2P lenders to meet stringent criteria, including filing to register its loans as securities and clearing other regulatory hurdles. This stunted the market and caused many venture capital groups to shy away from financing companies like Lending Club, Zopa and Prosper, but that cloud seems to have lifted.

If borrowing too much money — through banks or non-bank lenders like Lending Club or Prosper — becomes a problem, then you might become a customer of the other company with funding news today: DebtGoal, which launched in December of 2008, says it is the leader in “online personal debt-management solutions for consumers,” and that its proprietary algorithms can help users save an average of over $35,000 in interest payments and get out of debt 16 years sooner than they otherwise would. Its Series A round of $2 million came from Tugboat Ventures — which describes itself as an “early stage, mentor capital” firm — and Ed Odjana, founder of the debt-management site FreeCreditReport.com.

Odjana and Dave Whorton of Tugboat Ventures have also joined the DebtGoal board of directors. The company also got an earlier seed round of funding from New Cycle Capital that totalled $1.1 million. DebtGoal provides a number of tools for users to manager their debt payments, including a “SmartPay Plan” that calculates an optimal pay-down plan based on the user’s preferences and ability to pay.

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