Flashcards for toddlers is a huge business. Ok, I actually have no idea how big of a business it is. But I know parents think they’re an important part of the development of their child, and I have witnessed that toddlers will actually tolerate them for short periods of time. The direct feedback loop is key.

All of this stuff is moving to touch devices, obviously. Children love them, and get how to use them immediately.

Anyhow, interesting data from iTot Apps, the creator of a popular flashcard app for toddlers call, aptly, Toddler Flashcards. The company, by the way, was founded as a hobby by iLike cofounder Hadi Partovi and and Nat Brown, the ex-CTO of iLike.

They have an iPhone version of the app that sells well. And they also have a Windows 7 version. Despite the huge difference in number of available devices, Partovi says he’s surprised that the app only sells 1/10th the number of installs on that platform compared to iOS. Toddler Flashcards is currently ranked #709 for all WP7 apps, and #21 in the paid entertainment category. Despite that they have only sold an average of 7.5 copies a day over a previous week. They sold 71.5 per day on iOS during the same period, about 10x more.

Why do we care? Data like this hints at the total run rate for Win7 phones. Put enough of these data points together and you can start to get a picture of how well the device is selling.

Now please excuse me while I go play startup entrepreneur flashcards. Gotta keep fresh!

Editor’s note: This is the second of a three-part guest post by venture capitalist Mark Suster of GRP Partners on “Social Networking: The Past, Present, And Future.” Read Part I first. Follow him on Twitter @msuster. This series is an adaptation of a recent talk he gave at the Caltech / MIT Enterprise Forum on “the future of social networking.” You can watch the video here , or you can scroll quickly through the Powerpoint slides embedded at the bottom of the post or here on DocStoc.

Social Networking in Web 2.0: Plaxo & LinkedIn

In my last post, I discussed the origins of social networking online, beginning with CompuServe, Prodigy, the Well, then the rise of AOL, Geocities and Yahoo Groups. Next began the era of “spam-based” networks of which Plaxo (founded in 2002) was the king.  Co-founded by Sean Parker (yes, the same one who worked with Mark Zuckerberg in the early days of Facebook), it encouraged groups of people to email everybody in their email address books and “connect” on Plaxo so that when any of their contact information was changed online it could by synchronized with everybody’s local computer version and thus we could all stay in touch.

There was a backlash against the Plaxo spamming yet it paved the way for everybody who came after them to get users to drive viral adoption and we’d throw up our arms and say, “oh boy, here goes another social network that my friends are going to spam me about” mentality that made it acceptable for everybody who came afterward.

And come after they did.  While Plaxo never figured out what to do with us once we were all connected online, LinkedIn did.  They formed us into networks of networkers.  It was suddenly now not only about whom I was connected to, but who they knew and how I could get access to them.  We suddenly all wanted intros.  It added a new dimension to online social networks … business networking.  And they encouraged us to part with a lot more data about ourselves making LinkedIn our virtual resume.

And importantly Web 2.0 ushered in the era of “participation” – we all know that.  But less considered is the fact that the success of the Web 2.0 companies versus the Web 1.0 ones were enhanced because they coincided with hardware that allowed us to capture more content instantly – namely images and video – otherwide Web 2.0 might have been a lot less differentiated.  Suddenly we were all creating blogs on Blogger.com, Typepad & WordPress.  We started uploading images of ourselves to our blogs.

But the masses didn’t want to blog.  They wanted to publish pictures of themselves & their friends, share them, communicate with others, stay connected, have common experiences, find people to date, etc.  As I’ve said, it’s the same shit as the 1980′s – I swear.

Modern Social Networking: Friendster, MySpace & Facebook

We all know Friendster was the trailblazer in this category allowing people to create personal pages and connect to other people in a LinkedIn style but without the “business” and with a little more interactivity (let’s face it, for the longest time most users “friended” people on LinkedIn but then never really did much else).  But Friendster’s computer systems couldn’t keep up with the explosive growth (reportedly due to the complexity of the security model set up to control connections, privacy and authenticity of users) so MySpace was hot on the heels and swept up the market in a very rapid ascent.  Friendster was DOA.

And there it was – MySpace was growing at the exact time we all had cheap digital cameras, smartphones with cameras and new, cheap video cameras like the Flip that allowed us to create video.

Except that MySpace didn’t handle images or video well.  Luckily Photobucket & ImageShack did.  So users put all their photos on Photobucket & their videos on YouTube and shared them with their friends through MySpace.

Fox bought MySpace for $580 million and then did a deal with Google worth more than the purchase price to serve up ads.  For a nanosecond Rupert Murdoch seemed like the smartest guy on the Internet.  Google acquired YouTube for $1.65 billion, which at the time seemed laughably high and now seems prescient.  Google turned YouTube into one of the most valuable future Internet properties.  MySpace would have liked to own YouTube but didn’t have the public stock valuation to purchase them at the price that Google did.

MySpace later bought Photobucket for $250 million + $50 million earn out.  It did not have the same success as Google’s acquisition and MySpace sold Photobucket 2 years later to a relatively unknown Seattle-based startup called Ontela for a reportedly $60 million.

Murdoch seethed at these “startups” getting rich off the back of MySpace.  The conventional wisdom at Fox’s headquarters is that MySpace had “made” both YouTube & Photobucket by allowing them distribution.  MySpace vowed not to create anymore million dollar successes off of their backs that Google could then acquire.

So Fox ludicrously set up a quasi internal innovation center called Slingshot Labs.  The goal was to create innovations outside of MySpace and then MySpace would acquire them at pre-agreed prices based on how well they performed.  This was Politburo-style innovation and was laughable. I literally snortled when I heard that they were going to do this.  It was obviously a scheme set up by young entrepreneurs to line their pockets and some big-company executives who didn’t understand innovation.

Enter Facebook.  It had grown stratospherically from 2004-2007 to 100 million users, which actually was slightly smaller in December 2007 then MySpace was.  Facebook was everything that MySpace wasn’t.  It was: up-market, exclusive, urban, elite, aesthetically pleasing, ad-free and users were verified.  MySpace was: scantily dressed, teenaged, middle-America, design chaos and on ad steroids.

But the critical distinction in the direction of both companies was that while MySpace was putting up moats to keep outside companies from innovating and making money off their backs, Facebook took the opposite approach.  It launched open API’s and created a platform whereby third-party developers could come build any app they wanted and Facebook didn’t even want (yet) to take any money from them to do so.  So along come companies like Slide, RockYou & Zynga who wanted to build apps across all the social networks but were green-lighted the hardest by Mark Zuckerberg.

It was at that moment that a 22-year-old Mark Zuckerberg completely schooled the 75-year-old Rupert Murdoch.  Within the next 12 months Facebook users doubled to 200 million while MySpace stayed flat at 100 million.  The lesson was learned over 30 years in Silicon Valley: you create ecosystems where third-parties can innovate and thrive and you become the legitimate center of it all and can tax the system later.  Ask Microsoft, Autodesk or Salesforce.com – the evidence was there from Seattle to Sand Hill Road.

Facebook went on become larger than even Google and Yahoo! in terms of time spent on the sites.  Slingshot Labs was unsurprisingly closed within a short period of time and its properties sold-off or dismantled.  Duh.

Social Networking goes Real Time: Twitter

While Facebook was built on the idea that all our information was private and shared only between friend (before they changed this after the fact), Twitter was born under the idea that most of the information shared there was open and viewable by anybody.  This was revolutionary in thinking and worked because as a user you understood this bargain when you started.  Twitter is not the place to share pictures of your kids with your family.

Another Twitter innovation was “asymmetry” because you didn’t have to have a two-way following relationship to be connected.  You could follow people who didn’t necessarily follow you back.  This allowed followers to be able to “curate” their newsfeed with people that they found interesting.  Twitter restricts each post to 140 characters so users often share links with other people – one of the most important features of Twitter.  So this combination of following people you found interesting who share links drove a sort of “news exchange” that mimicked many of the features of RSS readers except that it was curated by other people!

Twitter is much more.  I’ve written extensively on the topic, but in a nutshell it is: an RSS reader, a chat room, instant messaging, a marketing channel, a customer service department and increasingly a data mine.

But what is magic about Twitter is that it is real time.  In most instances news is now breaking on Twitter and then being picked up by news organizations.

The one major thing that Twitter doesn’t have figured out quite yet is that platform thing or at least how to encourage a bunch of 3rd-party developers to build meaningful add-on products.  Twitter seems to have become a bit allergic to third-party developers (or maybe vice-versa).  18 months ago 25% of all pitches to me were ideas for how to build products around Twitter’s API.  Now I don’t get any.  Not one.  Yet the number of businesses looking to build on the Facebook platform seems to have increased.

Given I’m a passionate user of Twitter, I sure hope somebody there will re-read the MySpace vs. Facebook section above.  Lesson learned (to me at least) – let people get stinking rich off your platform and tax ‘em later.  That way other companies innovate on their own shekels (or at least a VCs) and let the best man win.  Close shop to try and control monetization and you can only rely on your own internal innovation machine & capital.  Seems kinda obvious or am I missing somethign?  Rupert?

Social Networking is Becoming Mobile: Foursquare and Skout

The trend that is unfolding before our eyes is that Social Networking is now becoming mobile and that adds new dimensions to how we use social networks.  The most obvious change is that now social networks become “location aware.”  The highest profile brand in this space is Foursquare.  Pundits are mixed on whether Foursquare represents a major technology trend or a fad but undoubtedly it has captured the zeitgeist of the technology elite at this moment in time.  At a minimum it has been a trailblazer of innovation that a generation of companies are trying to copy.

As our social actions become both public and location specific it opens up all types of future potential use cases.  One obvious one is dating where players like Skout are trying to cash in on.  When you think about it, young & single people go out to bars & clubs in hopes of meeting people to “hook up” with.  In a perfect world you’d like that person to be compatible with you in additional to being attracted to them, yet as a society we go into bars and have no idea what it behind any of the people we see other than the immediacy of their looks and whether we can get enough liquid courage into ourselves to talk with them and learn more.

It’s obvious to me that the future of dating will involve mobile, social networks that tell us more about the compatibility of the people around us.  It doesn’t take a rocket scientist to see how big people like Match.com and eHarmony became on the trend of helping us find our dating partners and why this would be improved my mobile, social networks.  How long this trend takes is unclear – but in 10 years I feel confident we’ll look back and say, “duh.”

FourSquare obviously brings up a lot of interesting commercial opportunities.  For years I saw companies pitching themselves as “mobile coupon companies” and I never believed this would be a big idea.  I’m not a big believer that people walk around with their mobile devices and say, “let me now pull out my device and see wether there are any coupons around me.”  I always said that if an application could engage the user in some other way – like a game – it would earn the right to serve up coupons as a by-product.  I think that is what Foursquare has done well.

In the future I don’t believe that Foursquare’s “check-in” game with badges will be enough to hold users interests but for now it’s working well.  I’ve always said that if Foursquare has a “second act” coming it could be a really big company.  In the long-run I believe that check-ins will be more seamless – something handled by infrastructure in the background.  So I expect more and new games from Foursquare in the future.  One awesome features of today’s Foursquare that often isn’t talked about is the ability to graph your friends on a real-time map and see where everybody is.  This is a killer feature for the 20 and 30 something crowds for sure.  Me? When I go out I mostly prefer to eat in peace with my wife and friends without people knowing where we are – I guess we all get old ;-)

In the next post I will make some predictions about where social networking is going next.  And only one hint —it isn’t all dominated by Facebook.  Stay tuned.  If you can’t wait you can get a sneak peak in the PowerPoint presentation below.

Tim Kendall, Facebook’s Director of Monetization, has left the company. This is particularly noteworthy because Kendall first joined Facebook nearly five years ago, in June 2006. He architected all of the company’s early monetization strategies, although in recent years there have been a handful of high level hires, mostly from Google, that has come in as peers or above him.

One of those more recent hires, David Fischer, sent an email out announcing his departure, saying ” it is safe to say we would not be where we are today without Tim:”

Team,

As some of you may know, Tim Kendall recently announced, in his characteristically modest way, he is leaving Facebook. Tomorrow is officially Tim's last day.

Over more than four years at Facebook, Tim has had an incredible impact on the company, and in particular on the development of the ads business. Starting back in 2006, Tim wrote the blueprint for our monetization strategy. (You might be wondering how I know this given I haven’t been here that long, but trust me on this — Tim gave me a copy of the document when I started and strongly “advised” me to read it. It was good advice.). In all seriousness, it is safe to say we would not be where we are today without Tim.

Tim recognized early on not only that advertising could be social, but that it should be social on Facebook. What began as "sponsored stories," social advertising has transformed the marketing business. And again, Facebook has Tim to thank.

Tim is truly a renaissance man. All of us who have worked with him have seen his strong intellect, quiet intensity, and complete focus on the mission at hand, with little tolerance for distractions or bureaucracy. He balances that with a more lively side that seems to come out after dark and has been displayed over the years at fine Palo Alto establishments like Rudy’s and the Old Pro. We will greatly miss all sides of Tim.

It’s a bittersweet honor to be the messenger of news like this. It’s never fun to say goodbye to a beloved and valuable player like Tim, but I’m grateful to have had the opportunity to work with Tim, and to continue to advance the work that Tim started and led for us for such a big part of our company’s history.

So please join me in thanking Tim Kendall for everything he has done for Facebook as a company, and for many of us personally. We will all be watching closely to see what Tim does next and what innovations he brings to light after a well deserved break. All the best to Tim in his next adventure.

Cheers,
David

What’s next for Tim? We’re guessing Pirate or Gentleman Hacker, but no word back from him yet. Maybe he’ll just buy a small central american country with his Facebook stock proceeds and settle down. We do hear that both Zynga and Twitter may be recruiting him aggressively…

Our friends at Wishpond are offering $500 to the winner of this week’s super contest that you can win just by surfing the Internet. That’s right! Five hundred clams just for doing what you do every day anyway.

First, the Wishpond spiel:

Wishpond is a platform that powers a local product search engine and iPhone app.

As a consumer you can find what you want at both big-box retailers and small boutique stores in your neighborhood (Wishpond is in more than 100,000 locations in North America). If you can't find it, you can just "wish" for it. Like Priceline for travel, Wishpond brings you the power to negotiate—make a "wish" to your local merchants and let them make you a deal. Also, consumers can get green and support their local communities and merchants this season. Local shopping makes a big difference to the air we breath and the communities in which we live.

Now, for the real meat of the deal. For the next five days we’re celebrating the five official parts of Festivus. You must participate each day to win, so no slacking off.

Read more…

As Skype prepares for an IPO in the next year, the VoIP company has been looking for new ways to expand its business both in terms of revenue and product development. One avenue the company is exploring to bring in more revenue is through enterprise offerings, via B2C and B2B offerings. However, it looks like Skype will be moving its VoIP offerings to the cloud.

We spotted these job postings on Skype’s website, indicating that the company is looking to build a team of cloud and web technology engineers. According to the postings, these staff members will “build an infrastructure capable of supporting hundreds of millions of users.” The products, will deliver “voice, video, chat and presence” to the web and “enable radically new Skype applications.”

A source with knowledge of the matter has confirmed that Skype is indeed building a team to work on cloud products and will be launching a number of web-based applications in the near future.

It’s not surprising that Skype wants to go after the the web-based voice-calling market. As Google gets into the web-based calling market with Google Voice’s integration with Gmail, the search giant is tapping into a big market. Google recently added an integration with Google Voice to Google Apps, signifying an enterprise play.

While a web-based version of Skype would surely draw in plenty of consumers (Skype is averaging 124 million users a month, a small fraction of which are paying for the service), the cloud play could also mean enterprise dollars as well.

If Skype was able to integrate its web-based voice-calling functionality into let’s say Microsoft’s cloud offerings, this could be a huge revenue and partnership win for the company. This is all hypothetical, of course, but it seems obvious that the VoIP company would want to look to existing enterprise companies to form these potentially lucrative deals. On the consumer side, Skype could further its existing partnership with Facebook to integrate a web app into the social network.

A representative for Skype tells us that the company will be hiring 350 new heads with majority in engineering and approx 80 percent in Silicon Valley. Clearly the company is boosting its developers so it can create new products. We know that Skype is eying other ways to create revenue, including advertising, gaming and virtual gifts.

But developing a reliable cloud-based calling service makes the most sense. One thing is for sure—Skype definitely has something cloud-related up its sleeve.

Photo Credit/Flickr/Jesse Kruger

SkyGrid, a startup that offers a powerful business news aggregator, is bringing its popular application to Android devices today.

SkyGrid's app allows you to add filters to news streams, with the aim of giving you the most important news right as it's happening. Using the startup’s patented algorithm, Information Velocity; SkyGrid measures what news is spreading the fastest across the world, and brings that content directly to its apps.

So users will know what news is relevant based on the people, topics, and events, that are spreading the fastest around the whole world. The app itself will streamsinformation from mainstream news, social sites, and blogs and allows you to share news articles and streams on the app via email, Twitter and Facebook.

SkyGrid For Android also allows you to filter news by type, with news centralized around politics, tech, sports, entertainment, healthcare and more. And you can create custom streams that combine different types of news, follow streams, and access SkyGrid’s featured news that are trending globally.

The Android apps also takes advantage of the devices search capabilities by offering one-tap search, a faster UI, and easier sharing (to Facebook, Twitter and email) directly from articles.

Considering the app’s popularity on the iPad and iPhone, the Android app should see decent traction.

Ask a child if there is a shortage of ice cream in the world, and no doubt, the response will be an emphatic yes—there certainly is. And ask a tech CEO if there is a shortage of engineers, and you will get the exact same answer.

That's the story I used to tell, based on my research on engineering graduation rates and outsourcing trends.  In 2005, my team shattered the myths about India and China graduating 12 times the numbers of engineers as the U.S. (we found that the U.S. graduated more than India did in 2004, and the quality of Indian and Chinese graduates was not comparable to that of American schools). And our survey of 78 executives from companies that Lou Dobbs (remember him?) harangued for "Exporting America" revealed that they weren't going offshore because of shortages of U.S. talent or deficiencies in the skills of Americans, but because it was cheaper and these companies needed to be closer to growth markets.

The argument that I made, and that the opponents of skilled immigration also make, is that if there was, indeed, a labor shortage, then engineering salaries would be rising and companies would be paying huge bonuses to attract and retain talent. This wasn't the case a few years ago. But with Google giving 10% pay hikes to all of its employees and offering hundreds of thousands of dollars in retention bonuses, this appears to be happening today. In Silicon Valley, there seems to be a talent crunch: most startups, venture capitalists, and big company executives say it is very hard it is to hire the right talent; they claim that wages are rising.

But national unemployment rates are hovering around 10%, and tens-of-thousands of highly experienced computer programmers and technical specialists can't find work. How can this be?

I believe I know the answer. But to be sure, I asked several experts and even my Twitter followers to share their opinion on my website. I received many insightful responses.

Sanjay Subhedar, a VC at Storm Ventures, says that in Silicon Valley, there is a shortage of Objective C developers, analog engineers who understand low power design, and good user-interface designers. There are also shortages of radio-frequency engineers in New York City and in Indiana.

Edward Alden, Senior Fellow at Council on Foreign Relations, explains that before the current downturn, computer programmers and software engineers were two occupations that had "something pretty close to full employment". There was very strong wage growth during the tech boom (1999-2001), and then a leveling off—but not a decline—in wages from 2001-2007. Complaints of shortages continued post-recession, however, even when the overall unemployment rate of engineers was much higher. Alden postulates that employers are looking for very precise skill sets that are not readily available either because of inadequacies in U.S. education and training, or because of insufficient mobility in the labor force.

There is clearly a mismatch between need and skill availability. There are other problems also:

• Many engineering graduates aren't becoming engineers or joining startups, as UC-Berkeley engineering masters student Rahul Barwani noted. Most of Rahul's classmates became management consultants or took other non-engineering jobs. That's because they received higher salaries than what engineering firms or startups offer.
• Startups don't hire students fresh out of college because they can't afford to train them.  As Robert Shedd, CTO of Three Screen Games, explains, startups need people who can hit the ground running. And that is why college graduates in places like Tampa, Florida can't get jobs, as IT consultant Roy Lawson observes.
• American companies don't invest in training their workforce any more like they used to. They expect workers to have all the right skills.
• Nearly 60% of U.S. engineering post-graduate degrees and 40% of graduate degrees are awarded to foreign nationals. In the past, most of these students would remain in the U.S. after graduation and eventually become U.S. citizens. Now, because of flawed U.S. immigration policies, most buy one-way tickets home.
• The world's best and brightest aren't beating a path to the U.S. any more. In previous years, H-1B visas for foreign nationals were in such high demand that they had to be awarded by lottery. This year, the annual quota of 65,000 hasn't even been used yet. Instead, these workers are staying home and entrepreneurship is booming in countries like India and China.

So there are many issues here. But the national debates about competitiveness, immigration, and education, typically focus on the issue of supply and demand of engineers and scientists. They paint this issue in black or white when it is shades of gray.

On December 7, The Information Technology and Innovation Foundation is releasing a detailed report which analyzes Science, Technology, Engineering and Mathematics (STEM) education and worker shortages from a historical perspective. It finds that the standard indicators of salary growth and unemployment rates are not the best metrics for assessing shortages. The authors of the report say it is better to measure the length of time it takes for companies to hire STEM workers; analyze global job growth in a given sector; and compare the U.S. position in the global job market to other countries. They prescribe more skilled immigration and greater investments in the education and skills of American-born workers.

All of this is very important, because many countries in the world are moving faster than the U.S. They are learning to innovate and will provide stiff competition in the future. Just when the U.S. should be opening its doors wider to skilled foreign workers and be focusing on nurturing startups, it is turning protectionist and xenophobic. We need to give Silicon Valley every advantage it can have rather than handicapping it with uninformed and misguided policies.

Editor's note: Guest writer Vivek Wadhwa is an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University. You can follow him on Twitter at @vwadhwa and find his research at www.wadhwa.com.

Ok, I flat out love these auctions that SecondMarket are holding for privately held Facebook shares. Last week the first one closed, and $40 million of stock changed hands at $20.76 per share, valuing the company at roughly $50 billion.

This week’s auction has now closed. Only 475,000 shares moved, compared to 1.9 million last week. The auction closing price edged up 1.2% to $21.01, about $10 million worth of stock total.

Stay tuned for next week’s auction. What do you think the closing price will be? Closest guess gets a TechCrunch tshirt.

Here’s the email to SecondMarket participants:

Thank you to those who participated in this week's Facebook auction. The auction was again successful and fully cleared at a per share price of $21.01. Next week, the reserve price will be $21.50, and we will continue to require a minimum sale and minimum purchase of 25,000 shares.

If you own shares that you are eligible to sell and wish to participate as a seller, please complete the attached Seller Information Sheet and submit it to SecondMarket at fb@secondmarket.com by Monday, December 6 at 11:59 PM EST.

If you would like to participate as a buyer, please complete the attached Buyer Information Sheet and submit it to SecondMarket at fb@secondmarket.com by Wednesday, December 8 at 12:00 PM EST.

Please see below for detailed results on previous auctions and for this week's auction calendar:

Previous Auction Results:

Total Shares Cleared to Date: 2,371,265

November 22, 2010:

Total Number of Shares Offered for Sale: 1,896,265

Number of Shares Cleared in Auction: 1,896,265

Reserve Price: $20.60

Clearing Price: $20.76

November 29, 2010:

Total Number of Shares Offered for Sale: 475,000

Number of Shares Cleared in Auction: 475,000

Reserve Price: $20.60

Clearing Price: $21.01

Next Week's Auction Timeline:

· Monday, December 6 at 10:00 AM EST – Auction process commences

· Monday, December 6 at 11:59 PM EST – Seller order forms due

· Tuesday, December 7 at 9:00 AM EST – Buyers informed of share quantity available

· Wednesday, December 8 at 12:00 PM EST – Buyer order forms due

· Wednesday, December 8 at 5:00 PM EST – Participants informed of auction results

· Wednesday, December 8 at 8:00 PM EST – Transaction documentation distributed to buyers and sellers

· Friday, December 10 at 4:00 PM EST – Completed transaction documentation due from buyers and sellers

· Friday, December 10 at 7:00 PM EST – Notice to be sent to Facebook, Inc.

Please contact fb@secondmarket.com or 212-668-5183 if you have any questions.

TechCrunch Disrupt finalist CheckPoints is a mobile shopping rewards app that lets consumers choose their own rewards. Despite not being available for OS3 users until recently, CheckPoints is currently the fastest growing mobile shopping application (in the same space as Shopkick and Barcode Hero) on the iPhone, amassing its first 100K users in one month and its last 100K users in the past two weeks.

The app is free to download and use, and lets shoppers earn CheckPoints by checking into over a million participating locations and scanning the barcodes of a number of featured products including Belkin, Tyson, Energizer, Kmart and more. You can redeem CheckPoints for prizes like cash, gift cards, airline miles and gadgets.

The app aims for a notably different demographic than Foursquare and Checkpoints users, who check in on average about 3 times a day, are predominantly female and 64% of them are between the ages of 25 and 44.

The decision to go Android wasn’t very hard,“From the moment we debuted in the Apple App Store, we've had requests to expand to the Android Market – in fact, we've got a waiting list of over 10,000 people," said co-founder Todd DiPaola.

Venice-based CheckPoints currently has 1 million in funding. You can find the app in the Android Marketplace here.

Why don’t more big Web companies come out of Europe? According to European investor Klaus Hommels, it’s not the usual excuses we hear like un-start-up-friendly labor laws or a culture against taking business risk. It’s that the European Union is just too fragmented of a market no matter what continent boosters would have us believe. Hommels explains in the video below– realizing full-well he’s another German likely getting some hate mail from our readers.

While I had Hommels on Skype, which he invested in, I had to ask him about his other notorious Swedish investment, Spotify. Rumors are swirling for the countless time in last two years that the company has finally gotten the labels on board and a US launch is imminent. I’ll believe it when I see it, but kudos to them if they’ve finally pulled it.

Hommels describes what I’ve called Spotify’s arrogance as founder Daniel Ek’s admirable refusal to take a deal that would allow his company to be bled dry by labels like so many music startups that came before. Should a deal be announced, the detail to watch is whether Spotify is allowed to offer a free trial service in the US without requiring users put down a credit card first. That’s reportedly been one of the big sticking points. If they’ve won that one, I’ll admire Ek too.

Go here for the first part of our interview with Hommels where he talks about his unconventional take on the Gilt/Groupon Clone Wars.

Google’s much-rumored acquisition of Groupon is off, we’ve confirmed with a source with knowledge of the deal. The news was reported earlier by Chicago Breaking Business, and we’ve verified that the deal is indeed off.

The two companies have been in serious negotiations for at least the last week, with reports stating that Google was bidding as much as $6 billion for the red-hot local deals company.

Our source has also verified that Groupon’s annual revenues are now at a $2 billion run rate, which is much higher than the figures that had previously been circulating (this number was reported by AllThingsD a few minutes ago). The $2B figure is the total value of Groupons sold — half of the cost of the Groupon goes back to the merchant, but all the revenue passes through Groupon in much the same way that Google collects all AdSense dollars and counts them as revenues before passing along a portion to publishers.

The CBB report says that Groupon may be eying a possible IPO, though it won’t be making a decision about going public until next year.

We’ll update as we hear more.

photo © 2008 David Goehring | more info (via: Wylio)Chicago Breaking Business News is reporting that Groupon has walked away from $5-$6 billion offered by Google in widely covered deals talks. Citing two sources, the report says that the deal did not go through and that the company might still elect to IPO in 2011.

If these reports are true, than this will be the second time Google will have failed to go into local, with Yelp talks also falling through. And walking away from that amount of money is pretty incredible. However the situation could very well still be fluid and the companies could continue to flirt until Groupon either goes public or take perhaps even more money from investors.

This has been a very leaky negotiation, basically negotiating through the press, so this could just be Groupon’s way of playing hard ball through a strategic leak. Your move Google.

Update: We’ve heard from a third source that the deal is in fact off and that Groupon’s revenue run rate is now at $2 billion instead of the oft-quoted $500 million.

Remember a few months back when I warned John Biggs that spycam Barbie was child abuse waiting to happen? Well guess what, America? I freaking CALLED IT.

The FBI – avid TechCrunch TV readers to a man - just made the plastic doll the subject of an official FBI memo, with agents warned that she might be implicated in sex crimes. Like a plastic Julian Assange.

Says the Huffington Post…

‘Beware of Barbie. That seems to be the message from the FBI after an internal memo reportedly leaked from the agency’s Sacramento field office this week. The memo (PDF) warns that Barbie Video Girl, a doll with a built-in video camera capable of recording for about 30 minutes, is a “possible child pornography production method…

The FBI memo, dated November 30, seems to be a few months behind TechCrunch, where reviewer Paul Carr called the product “child abuse waiting to happen” during a review at the time of the product’s release. He described it as “creepy,” then read from a press release from the PR firm that sent Tech Crunch the toy: “Unsuspecting subjects won’t know that Barbie is watching their every move.”

Amusingly, though, Jezabel’s coverage of the story slightly over-exaggerates my involvement…

“According to HuffPo, the FBI warning stems from a TechCrunch review in which Paul Carr goes off on the doll, calling it “child abuse waiting to happen” — because “pedophiles” could use the doll to record child porn and upload it to the Internet via Video Girl’s built-in USB port.”

…which is not quite what HuffPo said. But, yunno, I’ll take the credit. You’re welcome, America.

I’m hearing rumors that Ask a VC is getting big in pockets of Harvard Business School, which explains an increasingly sophisticated caliber of email questions over the last few weeks. Appropriately, we had the only suited VC in Silicon Valley on this week to answer them. (Ok, not in that picture. That was taken before his “MadMen” phase.)

Jeremy Liew of Lightspeed Venture Partners joined me this week, and we talked about how important engineering is to a startup, what you should do after you get your MBA, and whether the social games game is over and Zynga is the default winner. At the end, we dive into Liew’s portfolio a bit: He talks up ShoeDazzle, and I grill him about the future of RockYou.

Not enough Liew? You can catch his annual list of tech predictions here today too.

We all know that the early success and insta-revenues of companies like Gilt Group and Groupon have inspired more clones than Jango Fett. But while profitable and growing, my impression was that most of them are one-off rounding errors compared to Groupon’s swelling revenue estimates – numbers that seem to go up in the press by $100 million every time they don’t have any real news on this story.

So imagine my surprise when I learned that Klaus Hommels was running a network of nine Gilt Group-style and seven Groupon-style companies that together makes up the third largest player in the market. The Gilt Group-esque network, called Globalsquare AG, started in less than two years ago and has a $400 million revenue run rate; the Groupon-ish network, called Group Buying Global AG, was layered on top of it and already has a $200 million revenue run rate– in less than six months.

Hommels says that his group buying companies are the largest players in terms of revenue in Australia, Brazil, Turkey, Switzerland, and top two or three in the other geographies. Collectively, they have over five million members with fifty active cities. New cities are coming online each week.

The Gilt-like sites include Beyond the Rack in Canada, Brandsclub in Brazil, Brandsclub in Mexico, Markafoni in Turkey, FashionFriends in Switzerland, Sukar in the Middle East and North Africa, KupiVIP in Russia, Fashion-and-You in India and BrandsExclusive in Australia. The group buying sites include ClickOn in Brazil, Spreets in Australia, Deals-and-You in India, Grupfoni in Turkey, Clickonero in Mexico and Argentina, Cobone in Middle East and North Africa and DeinDeal in Switzerland.

Hommels is one of the best known angel investors in Europe having invested in Facebook, Skype, Spotify, Stardoll and many other companies. But the growth of these sites’ revenues is something even he hasn’t seen before, as we discuss in the video below.

The structure is a lot different than Gilt or Groupon. Hommels has a Swiss holding company that handles the technology backend and other administrative duties, for the 18 on-the-ground sites. Those sites in turn are each run as independent companies run by meticulously recruited local entrepreneurs. Hommels argues it’s the best of both worlds: They get the professionalism, resources and scale benefits of being a big global company, not to mention shared best practices on types of promotions that work. But each entrepreneur is still incentivized to grow their business, because it’s still their business. Keeping that fire lit is a bigger challenge when a company like Groupon buys you outright, and may be even greater if those global clone sites become a tiny part of gigantic Google.

Video is below.

Today, jewelry flash-sale site BaubleBar officially launched. Previously known as Eight1six, BaubleBar offers fashion jewelry at deep discounts for limited periods of time. The company was founded by Daniella Yacobovsky and Amy Jain, two recent Harvard Business School grads who previously worked in investment banking. The New York City startup also raised $1.1 million in a series A financing led by Accel Partners. Founder Collective, Lerer Ventures, and hedge fund “fashion maven” Julie Macklowe.

It competes with other flash-sale sites like Gilt, ideeli, and HauteLook, which sell a broader array of apparel and accessories, including jewelry. But by focusing only on jewelry, BaubleBar hopes to distinguish itself. (Last year, Ideeli raised $20 million and HauteLook raised $31 million earlier this year).

BaubelBar won’t sell diamonds or precious jewelry, only generally items below $1,000—usually baubles which go for around $50 to $80. These are more impulse buys driven by the season’s fashions, but they still bring in incredible margins. Mark-ups on this type of jewelry in retail stores are typically 300 percent or more, so there is a lot of room for discounting while still operating at a healthy margin.

Turning inventory over and offerin great deals is the key to getting repeat customers. When Jain and Yacobovsky were testing this concept over the past few months with Eight1six.com, they found that 40 percent of women who bought something once last June came back to buy another item.

Apparently on acquiring tear today, Google just bought video delivery company Widevine, it has announced on its corporate blog:

“So we're pleased to announce that we've agreed to acquire Widevine. The Widevine team has worked to provide a better video delivery experience for businesses of all kinds: from the studios that create your favorite shows and movies, to the cable systems and channels that broadcast them online and on TV, to the hardware manufacturers that let you watch that content on a variety of devices. By forging partnerships across the entire ecosystem, Widevine has made on demand services more efficient and secure for media companies, and ultimately more available and convenient for users.”

This acquisition is interesting in light of the fact that Google has been struggling with its own Google TV efforts since it launched the product about a month ago. My guess is this is directly related to improving the search engine’s expanded foray into video content as the Seattle-based Widevine’s technology allows content owners to stream video across multiple devices including mobile phones and televisions.

In addition, Widevine deals with DRM and optimization for a ton of known clients, relationships that might ultimately prove valuable to Google.

From Widevine CEO Brian Baker:

“For many years, Widevine has enabled consumers to access digital entertainment content. Through a combination of content protection and video optimization technologies, we’ve provided consumers with the highest quality Internet video experience while giving them freedom to watch on a variety of devices. With the recent growth of Internet video and network connected devices, it is increasingly important for technology to provide consumers with the capability to watch what they want, when they want, where they want.”

No word yet on the price of the acquisition but it’s probably hefty as the company currently has over $50 million in funding, led by Cisco and Samsung Ventures.

AdaptiveBlue, the developer of social recommendations app GetGlue, has just raised $6 million in new funding, according to an SEC filing. From the looks of the filing, it appears that Time Warner, RRE and Union Square Ventures all participated in the round.

GetGlue allows users to check-in to their favorite shows, music, movies and books, and see what their friends are enjoying in real-time. With each check-in, users earn points and stickers from GetGlue and other major brands. The app also allows users to rate their favorite shows, movies, music and books and receive personalized suggestions.

You can also share check-ins with your Twitter and Facebook friends, rate lists of popular shows, movies, music and books, receive weekly new releases and customized recommendations, and access existing reviews, clips and ratings for 20 million movies, books and albums.

A Time Warner investment is a big vote of confidence for GetGlue, which seems to have made a growing business out of TV and movie check-ins. The startup has struck a number of high profile deals with media companies for branded partnerships including HBO, Fox, Showtime, PBS, TwiT, and Universal Pictures.

And via these partnerships and new mobile offerings, GetGlue has been steadily growing. The startup officially hit 10 million monthly check-ins and ratings in September, up from an average monthly rate of 5 million ratings and check-ins in previous months.

The Nook Color is starting to make minor waves (in spite of my prejudice) as it’s really quite a lot of machine for $250. And now the SDK has been opened up, which should allow the usual suspects to adapt their existing Android apps to the Nook’s hardware.

It’s not like the Nook Color is some undiscovered country, though, filled with exotic future tech. It’s just a mid-range tablet with a nice shell and some custom stacks. And it’s already been hacked to pieces.

An “unofficial SDK” has been available for weeks, of course, in the form of many leisure hackers interested in the hardware (the latest developments are helpfully summarized here and of course on NookDevs). Once you sift the unique Barnes & Noble files and functionality from the basic Android 2.1 stuff, there’s only so much prodding that needs to be done before you can accurately document every file, hook, button, and custom action.

The specs include a mention of hardware scaling from 848×480 to 1024×600, a minor and non-aspect-matched stretch that can’t be good for readability; this was likely planned as a shortcut for developers who didn’t want to actually redo their pixel counts, menu images, and so on. It also suggests that limited access to “normal” apps is in the works, or that a few already populate the B&N store. You’d probably be able to tell because of a less-clear look to some of the text and images.

I don’t really expect too many consumers (though B&N is hoping to sell a million of these guys, according to manufacturing reports) to want to “jailbreak” this device, though, since it’s really being promoted and bought primarily as an e-reader, which was really my objection to it in the first place. I’m more interested in whether hackers will get it to run 2.3 or 3.0, which supposedly have better resolution support; a $250 Android 2.3 tablet with the option of special e-reading capability would be a solid buy.

Call me cynical, but after experiencing a YouTube shutdown firsthand, I’ve come to realize that it is near impossible to build a stable brand or presence on YouTube. The gatekeepers are far too antsy with the big red ban button and, after facing this problem once when CrunchGear’s entire video archive was shut down I’m loathe to recommend the service to those trying to post anything other than the occasional video of baby ducklings being blown over.

WatchReport, a watch website I used to frequent, started posting watch reviews on YouTube in 2005. Over the past five years they racked up two million views and 2000 subscribers on 50 reviews. Then all of the videos were gone.

On November 23 the account was locked “due to multiple or severe violations of our Community Guidelines,” which would presumably include “no sex, nudity, hate speech, shock videos, illegal acts, threats, impersonation, or copyright violation.” These were watch videos and the former owner of WatchReport, Christian, definitely didn’t impersonate anyone in the nude. I mean if anyone is guilty of infringing on YouTube’s community guidelines it’s Minxy or that Russian woman who used to give English lessons. This is a bunch of dudes with watches.

Two things could have happened here. WatchReport’s videos could have been considered commercial speech or some competing watch site could have poisoned the well but no one can tell. What we do know is that the current owners of WatchReport have no recourse, their video is lost, and YouTube continues to host bootleg music and, when 4chan gets their back into it, lots of porn.

The lesson? Depend on someone like Vimeo for hosting important stuff. Otherwise it could be taken away at a moment’s notice.

Earlier today, we were tipped about this thread in the Chromium Google Groups area. Gregor Hochmuth, the Product Manager for the Chrome Web Store, responded to a question wondering if Google would be giving developers advanced notice before the store goes live. Hochmuth said that yes, there would be reminders sent out before the launch to let developers get edits and updates in before it rolls live. Well, the first such message was sent out today.

Specifically, Google is starting to notify current Chrome extension developers about the upcoming Chrome Web Store launch. The reason is that extensions (and themes) will be wrapped into the Web Store alongside apps. In the email, Google will only say that the store is launching “later this year”, but this email seems to be the first indications that it’s coming sooner rather than later.

Another good indicator? Google traditionally had done code lock-downs for the holidays. This essentially means no new launches once everyone breaks in the next few weeks. And all indications are that this will happen again. Google appears to be gearing up for the launch of quite a few things before this break. And one of them will almost for sure be the Chrome Web Store.

Below, find the email that Google has sent out to developers to notify them about an impending change. (Note the sloppy numbering of the steps too.)

Hello!

Thank you for developing for Google Chrome. These last few months, our team has been hard at work, preparing for the Chrome Web Store launch later this year. Extensions and themes for Google Chrome will be part of this new store. With this email we wanted to inform you of some upcoming developments and changes in the extensions gallery and how you can best prepare the items you have listed in the gallery for the upcoming launch.

1. We have updated our guidelines for extension and theme creative assets: We recommend you to produce all the creative materials described in our docs. These are currently available only to apps developers but the same guidelines will apply to all items listed in the store once we launch. So, if you get these prepared now, you are going to be ready when the store launches. For those of you with complex extensions, we also highly recommend investing some time in preparing videos and slideshows, describing how your extensions work.
2. Double-check our branding policies: If you are using Google trademarks and brand names to describe your items, please take a moment to re-read our branding policies to help you avoid common mistakes.

1. Verify your listed items using Google's Webmaster Tools: This new feature allows you to associate your website with the items you have posted in the store. This will make users more comfortable trying them out. Access this feature at the developer dashboard.

1. Set up your Google Checkout merchant account and associate it with your developer account: If you arelocated in the US and want to sell apps and eventually extensions or themes through the store, you'll need to register for a Google Checkout merchant account. You can find more information on this new help article.

1. Make your extensions more discoverable: We will be launching a robust system of extensions categories in the gallery. You now have the option to classify your extension in up to three of these categories through the developer dashboard. This will help your extension be discovered by users who will be browsing the pages for each category.

Thank you again for making Google Chrome a better browser.

The Google Chrome Extensions team

Note the part where the Chrome Web Store will feature “a robust system of extensions categories”.

Update: MediaMemo has sources reiterating the a December 7th Chrome Web Store unveiling, as we indicated in the post a few days ago.

[thanks Adam and Jonah]

One of the most successful mobile games right now is Angry Birds, which has been downloaded more than 30 million times across different mobile platforms, with 12 million of those being paid downloads on iPhones, iPads, and iPod Touches. But on Android, the game is free, and is supported by advertising. Angry Birds has been downloaded more than 5 million times on Android since that version launched in October. “By end of year, we project earnings of over $1 million per month with the ad-supported version of Angry Birds,” says Peter Vesterbacka, the “Mighty Eagle” behind the game at Rovio Mobile.

He appears in the video above taken by Google’s AdMob team, which kicks off a mobile developer series. In the video, he doesn’t mention the $1 million a month figure, but he does reveals some other stats, such as the fact that the apps have an 80 percent retention rate, measured by the number of people who download updates. And on the iPhone alone, people spend a collective 65 million minutes a day playing the game.

He also talks about different ways to make money from mobile games—whether that is paid downloads, advertising, or toys. (Expect to see ads for the Angry Birds plush toys in the game itself).

Last time we checked in Former Alaskan Governor Sarah Palin was using Twitter to contest Gawker over the leak of her book America By Heart, bypassing the “lamestream” media. And she’s managed to catapult herself into the Internet spotlight yet again by using 140 characters to glom off the attention heaped onto the Wikileaks story, see below.

@SarahPalinUSA
Sarah Palin

Inexplicable: I recently won in court to stop my book "America by Heart" from being leaked,but US Govt can't stop Wikileaks' treasonous act?

November 29, 2010 6:25 am via Twitter for BlackBerry®RetweetReply

The Daily Show’s John Stewart calls her out on this, her tweeting and the media’s extensive coverage of her tweeting in general in the video above, “Like a teenage boy with a crush on the stuck up girl who hates him, the media is fascinated by everything Sarah Palin tweets.”

“I tweet that’s the way I roll,” Palin responded to critics of her over-reliance on social media, not doing herself any favors actually. Watch the video until the end for Stewart’s brilliant reference to Lincoln’s “Twittersburg Address.”

h/t Danny Sullivan

If you want to feel lazy, spend about ten minutes with Travis Kiefer.

He’ll start out by telling you how he spent every waking moment of his teenage years in low-income South Dakota, studying and scheming over how he could be the first one in his family to go to college, and the first kid in his highschool’s history to go to an Ivy League school. His dream school: Stanford. As a kid from a low-income family, he knew the biggest way to change his family’s economic reality was a Silicon Valley startup.

Ok, so he’s an impressive kid. But that sounds like a lot of Silicon Valley rags-to-riches stories, right?

Then, he’ll tell you about how he spent much of his first year building a non-profit called Gumball Capital. It aims to spread entrepreneurship and philanthropy to college kids by challenging them to take $27, 27 gumballs and one week, and turn it into a project that raises money. Schemes range from midnight Pizza sales to tiny carnival games substituting the gumballs for regular balls. (You can see videos of what they’ve done here. Most people, he admits, just eat the gumballs.) Last year 12 schools had 47 teams competing and raised just under $2,000, which was donated to micro-lending organizations like Kiva with the goal of eradicating hunger in the world.

Ok, so he’s spending what should be his most selfish years trying to help others. He’s just young and idealistic.

Then, he’ll tell you that he took a year off at Stanford to run the organization fulltime, taking no salary, sleeping on his friend’s dorm floor and borrowing other student’s guest-meal passes to eat.

Wait. This kid killed himself to get into Stanford, find a way to afford it…and then he just took a year off for this cause? Ok, that’s a little impressive.

He wants to expand Gumball Capital to fifty schools this year all over the world. Next week, one in India has organized 100 teams of three-to-five students to raise money for the poor.

Well, that’s ambitious…

But the organization needs money for the materials, shipping and the administrative stuff entailed with organizing all of these teams. So he’s trying to raise $125,000 this year that will fund the program for a while, given the $27 given to each team is always paid back out of the proceeds. He’s already raised $75,000 and has pulled in some well-known Valley people like venture capitalist David Hornik as advisors and mentors.

Wow. This kid is actually building a pretty impressive little company…

How’d he raise all that money? By pledging to run a marathon on every continent. He’s done one in Ireland, Argentina, San Francisco, Zimbabwe, Australia and Japan. In a few days, he’s headed to Antarctica. He’s been jogging for three hours at a time in the cafeteria meat locker at Stanford to train. Oh, and he just started running last March. ”My biggest fear was getting injured before this marathon, because I didn’t have a contingency plan. So now I can relax a little,” he says, grinning and looking as wholesome and idealistic as Kenneth from 30Rock. “I mean, even if i get injured during it, I can at least walk the rest of it.”

I just look at him.

“Yeah, I’m a little crazy,” he says with his Kenneth-like-toothy grin.

So, I’ve met a lot of impressive people in fifteen years in the Valley, but talking to this kid for an hour yesterday just blew me away. He is everything the best entrepreneurs are: He’s smart. Hardworking. Has insanely huge visions and goals that only get more outsized the more he achieves. He’s a tenacious networker and pitchman– by the time he left my office, I’d committed to writing this and doing a follow-up video once he gets back and, of course, donate to the cause myself. I even sent him home with a few Diet Cokes since he was planning to stay up all night building this site. And yes, he’s a little bit crazy. This won’t be last we’ve heard of Travis Kiefer.

But back to the cause: Kiefer is hoping this final marathon will put them over the top for their fundraising goals and support the organization through the spring semester. He has a ten day trip to get $27 out of 2,000 people. So, if you go here (NOW!) and donate $27, in exchange Kiefer will do something for you in Antarctica. He’s open to suggestion, but you only have two days to do it. He’ll claim a plot of land in your name with a little flag. He’ll sing a song for your girlfriend via YouTube. He’ll call and wish your mom happy birthday. He’d probably even take your garden gnome and take a picture of it in Antarctica.

His dream is to be on the Colbert Report– so he’s starting a Twitter campaign to get Colbert’s attention. If you are too stingy to give $27 to Gumball Capital, at least RT this. He’s running seven marathons to help end poverty when he should be doing keg stands. The least you could do is hit the RT button, right?

 

Yesterday brought the news that eBay acquired in-store product inventory search startup Milo for $75 million. eBay said that it plans to integrate Milo into both its online marketplace and its mobile applications, including barcode scanning app RedLaser. But tucked away in the press release eBay issued about the acquisition were a few surprising stats about the number of product searches eBay and its competitors are handling.

According to comScore, eBay handled more than 2 billion U.S. product searches in the third quarter. For the same time period, Amazon saw 847 million searches, while Google handled only 226 million product searches.

Really? The data seems a bit surprising considering Amazon’s dominance in the e-commerce market. In fact, comScore reported in its 2010 Q3 State of the U.S. Online Retail Economy report, that Amazon had the largest audience in the quarter, averaging 78 million monthly unique visits, surpassing Apple, Walmart and Target. eBay, which comScore said was the top auction site for the quarter, had 68.9 million unique monthly visits, which was down 3 percent from last year. But apparently, there is a lot more product searching going on there than on Amazon.

Google’s low product searches are less surprising considering that its product search isn’t nearly as expansive as Amazon’s. And Google doesn’t actually sell products. That being said, Google just launched major improvements to its product search (including more local inventory listings), which should help draw more traffic and searches.

For eBay, the wealth of data from product searches is certainly something that could be mined and used for recommendations, and other products.

We asked Google for comment on eBay’s stats, and received this response:

“We typically don’t share performance metrics for individual search properties.”

We’ve also contacted Amazon for comment, we’ll update when we hear back (though the company has notoriously had an aversion to providing specific numbers (i.e. Kindle sales).