This was probably inevitable: Google today announced that it is replacing video chats in Gmail with Google+ Hangouts. The company first brought video chat to Gmail in 2008, but ever since the launch of Google+, it was only a matter of time before the company decided to replace its old video chat feature with Google+’s marquee group video chat tool. Hangouts, Google says, “utilize the power of Google's network to deliver higher reliability and enhanced quality” and will allow Gmail users to also reach people not only when they are using Gmail, but also “if they are on Google+ in the browser or on their Android or iOS devices.”

With Hangouts, Gmail users obviously also get a number of new features that weren’t previously available in Gmail video chats. Besides the fact that users can chat with up to 9 users simultaneously, Hangouts will now also allow users to collaborate on Google documents and share their screens. As Google notes, there are also a “bunch of fun effects” that users can try. Just like with Gmail’s video chat feature, Hangouts also requires users to install a plugin.

Ever since the launch of Google+, Hangouts has been considered the social network’s “killer feature,” but it remains to be seen how Gmail users will react to seeing even more Google+ features in their email client.

Google says that it is rolling this new feature out starting today, but the complete rollout could take a few weeks.

 Netflix has open sourced ”Chaos Monkey,” its tool designed to purposely cause failure in order to increase the resiliency of an application in Amazon Web Services (AWS.)

It’s a timely move. AWS has had its fair share of outages. With tools like Chaos Monkey, companies can be better prepared when a cloud infrastructure has a failure.

In a blog post, Netflx says that this is the first of several tools that it will open source to help companies better manage the services they run in cloud infrastructures.  Next up is likely to be Janitor Monkey which helps keep an environment tidy and costs down.

Chaos Monkey has achieved its own fame for its innovative approach. According to Netflix, the tool “randomly disables  production instances to make sure it can survive common types of failure without any customer impact.  The name comes from the idea of unleashing a wild monkey with a weapon in your data center (or cloud region) to randomly shoot down instances and chew through cables — all the while we continue serving our customers without interruption.”

Netflix unleashes Chaos Monkey in the middle of a business day and monitors with engineers standing by to address any problems. It gives them an understanding of the problems in the system and lessons for improving its weaknesses.  With that knowledge, Netflix builds automatic recovery mechanisms to deal with the vulnerabilities.

The goal is to have the system so resilient that a failure at 3 am on a Sunday will not even be noticed.

Instance failure is common in the cloud.  Even if you are confident your architecture is solid there is no fool-proof protection against any host of issues. Problems may strike next week or next month. A simple fix can be disastrous at times, causing problems you would never expect.

From the next Netflix blog:

Do your traffic load balancers correctly detect and route requests around instances that go offline? Can you reliably rebuild your instances? Perhaps an engineer “quick patched” an instance last week and forgot to commit the changes to your source repository?

After its new owners decided to go back to the drawing board and figure out what to do with the former Web 2.0 darling, Digg is relaunching on Wednesday. Today, a week after its new owner Betaworks explained why it bought the site and announced the August 1 relaunch, the company has published the first mockups and screenshots of the new Digg v1 and explained what the user experience on the site will look like. According to this announcement, the new Digg will be a “beautiful, image-friendly, and ad-free experience.”

The new Digg looks to be a major departure from the current design. Not only will the homepage get a complete overhaul, but Digg v1 will also do away with the old Digg’s “Newsrooms” feature, as well as the “Diggbar.” The new version of the site will also bring back Digg’s old “upcoming” page where users can see which stories are about to hit the frontpage. The new site, says the new Digg team, “pivots around three views: Top Stories, Popular and Upcoming.”

For now, though, the site won’t feature a commenting system. The team apparently decided that getting this feature right would take more than the six weeks it gave itself to relaunch the site. Digg promises to experiment with comments in the coming week.

As for the voting system that was always at the heart of Digg, the new owners say that users will continue to be able to vote on stories but that the algorithm will also take Facebook shares and tweets into accounts (that’s actually a feature Digg planned for its v4 release before it scrapped it before the launch). Votes on the site, the new team says, will get priority but it sees shares on other social media sites as “important signals” that will be “closely monitored” by a team of moderators.

Besides the web version of the new Digg, the team will also launch a new mobile-optimized version of the site and a new Digg for iPhone.

At first glance, this looks like a sensible redesign for Digg, but let us know what you think in the comments.

A milestone for Twitter today, according to the Paris-based analyst group Semiocast. The social network has now passed the half-billion account mark — specifically 517 million accounts as of July 1, 2012, with 141.8 million of those users in the U.S., still about half as many users as Facebook has but positioning it as the second-biggest social networking site.

And just as most of Twitter’s users are coming from outside the U.S., so are the tweets: the top three cities in terms of tweets, it says, are Jakarta, Tokyo and London.

The firm says it based these figures on a sample selection of 1.058 billion public tweets in the month of June.

It also notes that while Tokyo is one of the most active tweeting countries, growth there is maturing and slowing down, as it is in Korea.

One thing Semiocast doesn’t break out in its report are mobile numbers and usage on different Twitter clients, which would be interesting to see just as a point of comparison and in the context of Twitter trying to encourage users to adopt its own platform (for its advertising and other monetization potential) rather than those using its APIs for effectively similar services.

Some other notable findings:

Geolocation is only used 0.77% of the time. The feature has been around for 2.5 years, but it appears that even as users from around the world love to express themselves, they’re not that keen on expressing where they are.

The proportion of U.S. users is on the decline. It’s now at 27.4% of users, compared to 28.1% in January 2012. That still makes it the biggest single Twitter nation, however. Breaking out specific cities, the highest-ranking U.S.  city for tweeting is New York, at number-five and 0.4% of all tweets. Twitter’s home market of San Francisco accounts for only 0.2% of all tweets.

As with social networking site Facebook, it’s all about the developing world for growth right now. Brazil was the fastest-growing country, and it now has 41.2 million users, up from 33.3 million in January. That’s only 8% of all users, however, and 6.6% of tweets (meaning they are less active than their numbers would suggest).

Brazil usurped Japan as the second-largest country after the U.S. in terms of profiles but it is the most engaged. It represents 10.6% of all tweets but only 6.7% of users. Japanese after English is the second-most popular language.

Other trending nations include Indonesia, which has 29.4 million profiles and the most active Twitter city, Jakarta. Semiocast implies that Indonesia may soon overtake the UK for fourth position in its rankings: the UK currently has 32.2 million user profiles but is growing more slowly than the Southeast Asian country.

Another global sign: Semiocast says Arabic is going strong on Twitter and is now the 6th most popular language on the site, accounting for 2.8% of all tweets. Saudi Arabia’s user numbers were up by 93% in six months to 2.9 million.

There’s no question about it — as fun as mobile gaming can be, sometimes furiously pecking at a touchscreen just doesn’t cut it. For those of you who long for the halcyon days of gripping hard, uncomfortable controllers while a conceptually-simple game runs on your television, the GameDock may be just what the doctor ordered.

This nifty hardware project comes courtesy of the Oregon-based team at Cascadia Games, who not long ago put their pet project on Kickstarter for retro-minded gamers to ogle. The GameDock has a delightfully Nintendo-y vibe going — users dock their favored iDevice (no blowing required), while a pair of NES-esque controllers run into a pair of USB ports up front and an HDMI cable provides the all-important television connection.

Of course, hardware is only ever part of the equation with projects like this — one of the major issues for a product like this is tracking down games that are actually compatible with it. Creators Chris Jorgensen and Andi Greise; noted on their Kickstarter page that iCade apps with no more than two action and menu buttons should work nicely, but the pair have also been working on a dashboard app that they plan to fill with curated apps that are known to fully compatible. Sadly, not every game that would benefit from some physical buttons (I’m looking at you, Mega Man X) will play nice with the GameDock, but that’s an iCade-related rant for another time.

Thankfully, the project just recently tiptoed over its funding $50,000 funding goal, so (barring any unfortunate missteps) this thing should be hitting backers’ doorsteps by December. Speaking of which, you’ve still got until August 16 to throw your hard-earned money at this thing — a bare-bones GameDock can be yours for $100, while an additional $25 will nab you a pair of USB controllers and an HDMI adapter for your troubles.

The recent results of Zygna, Groupon, and even the mighty Facebook on the public markets in the U.S. have served to highlight a couple of major issues for European startups. One is a little jealously: there remain few viable IPO markets in Europe for tech stocks, hence why you see so many moving to the US – usually NASDAQ – when they get big, as happened with Yandex and Qlik Technologies. The second is annoyance: many solid European tech companies are now at a point where they have solid, revenue generating businesses, built on a lot more than hype and user numbers alone. And in the last year we’ve seen these companies start to look for ways to break-out.

For example, there are rumours that both the incredibly successful Wonga and King.com are considering floating on New York's NASDAQ exchange, while Mind Candy is also alleged to be considering a float for its Moshi Monsters game.

And the latest symptom of this is another rallying cry by entrepreneurs and VCs for a tech IPO market in London, the natural home for European startups to float in a global setting. Over the weekend the Index Ventures VC lit the touch-paper on a debate many in the ecosystem have been champing at the bit to have and one we’ll be tracking over the next few months and years no doubt. For we are acutely aware that a healthy tech sector requires funding at ALL stages, and with no European IPO market, startups in Europe will remain starved of capital in the long run.

Written by the highly respected and veteran investor and Index Ventures partner Robin Klein, the post points out both the “centrality of the Tech sector to economic growth” during the downturn, while at the same time the huge growth in its size over the last few years.

Index notes the “steady transformation” of real estate tenants in London’s business districts towards technology companies such as Bloomberg, Skype, Amazon, Expedia, and newer ones such as Moo.com, Moshi Monsters, Huddle and others. Some companies in the tech sector are seeing revenue growth of at least 30% per annum, and up to 100%.

However, says Index’s Klein, there “remains a disconnect between the economic vigor in the tech world and the dynamism of the City.” And there is the continuing problem that the “door to London's IPO market is shut tight for tech companies” despite London's place as a global financial centre

Further more, its just plain stupid. The UK's Internet economy now accounts of over 8% of the country’s GDP, a higher figures than South Korea (7.3%), China (5.5%), Japan (4.7%) or the US (4.7%) according to the Economist Intelligence Unit and OECD.

And according to a recent BCG report online retail accounts for 13.5% of total UK retail sales, a higher percentage than in any other G20 country, while online advertising accounts for 28.9% of total advertising spend. By contrast, in Japan, only 21.6% of the advertising market is digital.

In other words, UK and European investors in public markets are missing out on all this for want of a place to participate even though it’s happening outside their front door.

As a result, Index has suggested a “three-pronged attack from policy-makers, entrepreneurs, and the City alike to make this happen.”

Their proposals are quoting at length:

For the companies capable of listing:

An approach to an IPO needs to be one which recognises that the listing is a fund raising and liquidity event on the way to building a large and great company. It is NOT an exit.

It is important to be IPO ready. This means having the right governance structure in place: an appropriate board with an independent head of audit committee, and well-established remuneration and nomination committees. A well-drilled quarterly rhythm to re-forecasting and a good history of hitting the numbers is also essential.

It is important to communicate a company's story to the market with clarity and precision.

Ideally VCs will help their company get ready, and be willing and able to hold the stock post float for at least one year. It is the price one year from the float that is most relevant to inside shareholders, so the pricing of the floatation shouldn't be optimized to the nth degree.

For the policymakers:

The minimum public float requirement of 25% is too high to create a healthy IPO market.

Entrepreneurs don't want to give away so much of their company, particularly when equity is given to the bankers hired to help list the company as well. It would behoove both Europe's tech companies as well as the public markets if the minimum threshold either dropped to 10%, or a minimum valuation was assigned to companies interesting in listing. The public float is likely to grow over time as early investors (VCs and others) sell their shares.

The stamp duty on shares should be revoked, given that the UK has the joint highest rate of stamp duty in the world. This puts London at a competitive disadvantage when it is competing with New York.

For the Institutional Shareholders and Fund Managers:

It is important to understand the fundamental difference between PE-backed companies and VC-backed companies. PE houses are generally seeking to exit their investments through an IPO or replace debt in the company. VCs generally fund their portfolio without debt and a listing is often seen as a way of raising the company's profile and providing access to further capital.

Strategic investments by city firms are needed to build up specialist analysis and the research required to properly evaluate hyper-growth tech companies and become familiar with the diverse business models and KPIs.

There is a big difference between 2000's tech stocks and 2010's growth stocks. Whilst many of the tech companies will not offer sufficient market liquidity and be sub scale at this stage, it is not hard to see that this situation will not pertain for too long.

This whole issue was thrown into sharp relief only today.

Dow Jones VentureSource released figures about European venture capital which show that consumer Internet companies are now leading the charge here. But the trends also show that European tech companies are suffering from too few exit and IPO opportunities.

In the the second quarter of this year only three companies went public, which was half the number of initial public offerings (IPOs) recorded in the second quarter of 2011.

The lack of deal activity combined with investment growth is down to a “lacklustre exit environment” which is thus keeping companies private for longer.

I was reminded of this debate when talking to a Private Equity manager recently.

We were both at an event for tech startups, and he was, frankly, blown away by the innovation going on.

At his particular fund, they had realised there was an increasing amount of capital for early stage investors, so they had decided to create a large fund for later stage tech companies. “It’s worked out well” he told me, especially because they had seen the cycle time for tech companies shorten dramatically. It used to take 4/5/6 years – it’s now happening in a year or two years.

But it is his observation that the lack of public markets is holding Europe back from creating the next big wave of companies, as the U.S. did.

The usual big funds and the analysts have a big community in the US. But in Europe there are not a lot of IPOs, and when they do IPO the companies don’t trade well and that downward effect trickles down. They either sell too early or they don’t raise enough cash on the IPO.

So the question is, how can we bring public markets investors into these forums of entrepreneurs?

What can be done from here on to make this happen?

Because it’s clearly going to take more than a few networking events among city traders and startups to get this going.

Indeed, Klein tells me that there is no appetite for VCs to “build these elusive billion dollar companies until we have a solid IPO market. When I look over the pond and see what is being listed (and the valuations) – I go green.”

And as another VC told me today, “we have 4 companies making more than £10m in EBITDA – I don’t want to see these companies sold to some U.S. (or other) giant.”

The whole infrastructure of the companies, the policymakers and the institutional shareholders and fund managers to be put in a room and have their beds knocked together until they come up with some answers.

Let us know your views in the comments below. We’ll be tracking this story as it emerges.

Mike Daisey, noted fabulist, is back at his original theatre in DC, The Woolly Mammoth where he is holding encore presentations of his debunked – and now slightly rewritten – show about working conditions at Foxconn. Gone are the guards with guns, the fake crippled man who touched the totemic iPad, and the real/fake translator named Cathy. Daisey replaced those stock characters with a bit of self deprecating humor and, as far as I can tell, a few, clearer facts.

Here’s a brief review in the NYT. We’ve tried to invite Daisey back a few times to talk but near his spin-out he refused.

My problem with Daisey’s rise and fall and (slight) rise is that he told exactly the wrong story at exactly the right time. We are in a post “magic” era, when we are beginning to understand two things: first, that the business of making hardware is difficult, dirty, and boring and second that we have outsourced so much of our manufacturing might and we are trying to understand the implications of walking it back. Daisey built a fantasy that revolved around the idea of the Dickensian workhouse as written by Huxley. Realizing the banality of what manufacturing really was – long, boring hours spent doing the same thing over and over – he had to add dramatic spark. Sadly, he added too much.

Daisey’s play runs until August 5 and it’s my sincere hope that he’s done with it after that date. It’s no longer topical – when ABC takes cameras into Foxconn, you’re pretty much past the mainstream and into irrelevancy – and it’s definitely not true. While I agree that all workers everywhere should get a living wage, building a moral iPhone or Nexus 7 may cost us more than we can pay. Hardware manufacturers are strapped to a machine whose engine is commerce and whose fuel is neophilia. The machine has to move, no matter what any playwright has to say. How humanely it moves, however, is up to us.

Jury selection is starting today for the patent trial between Apple and Samsung that has already resulted in the release of tons of early Apple iPhone and iPad prototypes designs. But one design holds particular interest: an iPhone concept called “Purple.” The phone isn’t actually purple (it’s white), but the big news is not the color – it’s the date of the creation. To counter Samsung’s charge that Apple copied Sony’s smartphone and Walkman designs when it created the iPhone, Apple filed a motion with the U.S. District Court for the Northern District of California which shows the Purple concept was from 2005 – before Sony’s Nishibori Design, developed in March 2006.

Samsung had pulled Sony’s designs into the case, as an effort to discredit Apple and show that it copied designs from elsewhere in the creation of the iPhone.

News of the Purple concept was first reported by The Verge, which referred to documents from Apple which called the Sony-style touches “an ‘enjoyable’ side project,’” but one that was done on top of original concept designs. Apple then asked the court to exclude Samsung’s evidence, showing that Apple’s designs were Sony-inspired.

Apple requests that the Court enforce Judge Grewal’s Order by excluding evidence that Apple’s designs were derived from Sony’s design language, from Mr. Nishibori’s exercise in applying Sony-style design details to the iPhone, or from Sony handsets of the time. Because this evidence is not admissible to prove the invalidity of Apple’s patents, it should not come in for any purpose.”

Although Apple is not enjoying having to release so many of its prototype designs in such a public forum, revealing the “Purple” concept worked. According The Verge’s updated report, Judge Lucy Koh says now that Samsung will not be allowed to show evidence during the trial regarding the Sony-inspired designs for the iPhone.

The Weather Channel has been working hard to improve its mobile experience, with a new iPad app, a revamped iPhone app, and now a brand new Windows Phone app for Lumia devices. The WP app for Lumia will have features exclusive to Lumia owners for the next three to six months, at which point the same features will be ported over to the old Windows Phone app, available to all.

Along with support for seven languages, the app will offer improved alert functionality and a new augmented reality feature. The Augmented reality feature allows you to check out the weather through your camera using photos submitted by users in your area. So, for example, if you pointed your phone’s camera at the Empire State Building, and someone had just posted a photo of it in the rain, your screen would show that user’s photo and the accompanying weather in your display.

The app also provides channels for you to chat with friends about weather in your or their area. But perhaps the most important social feature is Weather Alerts for your friends, alerting you if any of your friends or family are under a sever weather threat.

Lumia users will also get a bit better at planning out their lives thanks to the “My Amazing Day” feature on the new app. Users will be able to specify weather conditions for certain activities (between 70 and 80 degrees, low pollen for a picnic in the park, or rainy and cold for a day spent reading indoors). The TWC app will then notify you ten days out that Tuesday looks like the perfect day for your picnic, or that Saturday’s conditions will be perfect for your planned reading day.

In a few months, all Windows Phone users will have access to the new language support, along with the ability to add live tiles with weather-triggered backgrounds to the phone’s homescreen. Users will also be able to track their favorite weather moments by checking out TWC’s gallery of user-generated photos, or upload their own photos.

But for now, loyal Nokia users will be the only lucky cool kids with access to TWC’s new WP app.

Have we reached a state of “peak Android” in the same way that the energy industry can reach “peak oil”? This is an idea being floated today by Strategy Analytics. Last week the firm noted that Android partner Samsung was the world’s leading smartphone seller last quarter, taking just over 50% of the market. Today, it’s broken out what’s happening in the key U.S. market: Android sales actually declined by 5% over last year — and SA says Android may be “approaching a peak” in its market share.

The analysts noted that in Q2, which ended June 30, U.S. smartphone sales trends reflected the slowdown that it has been seeing globally. Total shipments in the U.S. stood at 23.8 million units, which was (like Android itself) a drop of 5% on the same period a year ago. Android, at 56% of all sales, remains the most dominant in the U.S. but Apple, the analysts noted, gained at Google’s expense and was the only OS to have grown over last year.

Apple’s shipments totalled 7.9 million units in the U.S., giving it a 33% share of the market, up by 10 percentage points over the same quarter a year ago.

RIM’s BlackBerry, meanwhile, is once again a testament to how quickly a decline can happen. The Canadian company saw its unit shipments and market share nearly halved; they are now at 1.6 million units and 6.5% of the market, as Apple continues to eat into its enterprise business and RIM faithfuls continue to hold out for devices built on BlackBerry 10 later this year. This is RIM’s lowest point in recent history, SA notes.

And in a mark of ongoing consolidation around two dominant players, “others” (including Windows Phone from Microsoft/Nokia and other OEMs,) declined sales of just 1 million units for the quarter for a 4% share of the market.

“This was one of the slowest growth rates ever experienced by the important U.S. smartphone market,” said Alex Spektor, associate director at Strategy Analytics, in the report. The reasons are the same as they are for the global market: economic issues; higher penetration of smartphones; and tighter upgrade policies to improve their own margins.

Neil Mawston, executive director at the firm, meanwhile describes Android as “approaching its peak” while Apple’s iOS has been gaining ground. This is an interesting turn of events, considering that last week, Apple spent some time explaining why its own numbers were not actually very strong, citing in part users holding off purchasing until the next iPhone comes out, as well economic slowdown and the other issues. “Apple is rumored to be launching a new iPhone in the coming weeks, and that event, if it takes place, is going to heap even more pressure on Android in its home market,” he notes. One report earlier today even pinned a date on that event which is expected to have not only an iPhone 5 but also an iPad “mini” device. They will be revealed on September 12, notes iMore.

In April, news broke that Aileen Lee, partner at Kleiner Perkins Caufield & Byers, was starting a venture fund that would be focused on smaller, “seed-stage” investments. The fund is separate from KPCB, however, KPCB will be the anchored investor, Lee said. At the time of the original report, many of the details beyond the “why” were still being worked out, including the fund’s size and name. Today we know a little more: it’s a $40 million fund and it’s being called “Cowboy Ventures.”

$40 million is a good size – most seed funds are anywhere from $10 million to $70 million. 32 investors have contributed to the fund so far, but no other members of the fund were listed in the SEC filing.

According to filing, the issuer behind Cowboy Ventures is “Cowboy Capital Fund I, LLC,” and it has closed on $36,000,000 the $40,000,000 being offered.

Although Lee plans to be full-time with Cowboy Ventures, she will also continue to hold her title as KPCB partner and will work with her portfolio companies there, which include Rent the Runway, One King’s Lane, Plum District, Dollar Shave Club, Offermatic, and others.

The name of the fund itself is interesting. On the one hand, “Cowboy” does invoke that spirit of the Wild West – a spirit that reflects many of the challenges of entrepreneurship: surviving, persisting, creating something new, hard-fought conquests to win space, establishing communities, etc. This even goes back to something Lee said in an interview with TechCrunch’s Colleen Taylor, when discussing the seed funding space. “Super early-stage companies have a village that form around them for support," Lee noted at the time.

Still, you have to admit, “Cowboy” also sort of an odd choice for a woman who’s also passionate about gender diversity, saying she’s a “huge believer in power of women on the web” and that she understands “the role and importance of females in companies can make a big difference.”

But maybe we shouldn’t read too much in the name. It’s fun, and it’s certainly going to be memorable. Cowboy up, startups.

Note: We reached out to Lee before publishing, but she is traveling, so additional comment may be delayed. 

Last year, we wrote about an app called Videolicious designed to quickly let users create videos without having any editing expertise. The startup has been refining its app since then, and just released a new version to improve automatic video creation.

In addition to the release of the new app, Videolicious has secured $1.4 million in seed funding from investors such as Howard Lindzon, Joanne Wilson, Amazon.com, Venture51, Ludlow Ventures, Trestle Ventures, Scott Ingraham, and Quotidian Ventures.

Videolicious specializes in the creation of sales and marketing-type videos, enabling pretty much anyone to quickly create promotional and educational materials for their audiences. That includes event videos, blog videos, how-to videos, conference videos, sales videos, and video tours.

The new version of Videolicious makes it easy for users to create of professional-grade videos without having significant editing expertise. It works by letting them choose from videos and photos stored on their phones, placing them in order and then stitching together that media. It enables them to use transitions, visual effects, and logos. Once users have picked the media they want to use, all they have to do is tap the videos while narrating over them, and they can later add soundtracks.

Videolicious is available through a freemium business model, in which users can use the app and platform for free to start. Users can make free videos of up to one minute in length, with 10 shots per video and 20 videos stored. For $5 a month, they can make videos up to 10 minutes in length, with up to 100 shots per video and 100 videos of storage. Those users can also add their company’s logo to the videos, have unbranded, embeddable video players, and the ability to select from a wide range of licensed music. And for $10 a month, users get unlimited-length video, unlimited shots, and unlimited videos stored… As well as priority support and the ability to share videos to your own server.

A bit of a setback today for mobile payments and specifically iZettle — the startup modelled as a kind of “European Square” for merchants to take card payments on their phones. The company today had to shut off accepting Visa cards in three of the markets where it has been running pilots — Denmark, Finland and Norway — over what appears to be a problem with how it authenticated users on its platform, using an electronic signature instead of a PIN. The problem came to light when users started to receive emails from iZettle with the news (we have one from a reader below) and comes at a time when competition is heating up among point-of-sale mobile payments players, with mPowa, who you might better know as Square’s hand nemesis, now extending its payment services to Android; and Square reportedly getting a $200 million investment on a $3.2 billion valuation.

iZettle’s CEO Jakob de Geer describes the need to shut down Visa acceptance as “disappointing”,  ”annoying,” and “puzzling,” but also notes that he thinks it’s just a short-term problem: “I'm pretty confident that we'll find a way forward,” he told TechCrunch. “You have to regroup and adapt; that's part of the game part of being in a disruptive space.” For its part, a Visa Europe spokesperson tells TechCrunch that the problem arose over Visa’s “standard acceptance device requirements:”:

“Visa Europe supports the development of new types of acceptance devices to be used by small merchants not previously accepting cards. However, Visa Europe has not yet agreed for Visa cards to be accepted on the iZettle platform, as it does not currently meet our standard acceptance device requirements.”

Some 15,000 active merchants across the three countries have been affected, says De Geer, with the dispute between Visa Europe and iZettle has been “in the works for a while now.”

Visa Inc. in the U.S. is an investor in Square, and MasterCard recently became an investor in iZettle, so it is easy to think that this story may be a case of muscle flexing between the two larger companies: perhaps a sign of Square setting the stage for a European launch?

De Geer says that’s very unlikely because Visa Europe is an association owned by its members in different markets, while Visa Inc is a publicly-traded U.S. company. “Two completely different creatures that work differently,” says De Geer. “I think people are linking these together but it doesn't have anything to do with the Square investment.”

Worth noting, however, that on Visa’s corporate site the relationship between Visa Inc. and Visa Europe is described as “…mutually invested in each other's success. The two organizations are united by a common global brand and work together to ensure Visa's brand integrity, interoperability reliability and security of Visa products and systems.” So there could be more to this tightening of policy than meets the eye. (Thanks, Patrik Svensson, for the tip on that detail.)

What this definitely highlights, however, is that the business of linking up with requirements from existing players can be a messy and confusing business. De Geer says that iZettle has been approved by Master Card, American Express, Diners Club and EMV, the global standard for chip cards.

(This potentially also points another issue about these different payment services: they are all too reliant on existing, large players. This is where a PayPal or Dwolla can stand out and potentially be more disruptive and successful, notes Yann Ranchere, a financial services specialist out of Switzerland.)

Visa Europe’s spokesperson would not tell TechCrunch exactly which requirements are not being met by iZettle, TechCrunch understands that it may have something to do with how payments are authenticated on iZettle’s platform: a consumer pays using the chip on the card — different from the magnetic swipe strip most common on U.S. cards —  but does not enter a PIN to authenticate; rather he signs on the screen of the device. This is an acceptable form of payment in the Nordics and PIN on mobiles is less secure, claims De Geer, but he admits that it may be that Visa wants the PIN element worked into the platform anyway (iZettle also notes that its method is approved by EMV).

What’s confusing is that De Geer tells us that Sweden, where iZettle has a commercial service in operation, does not have to shut down its Visa payment option. The UK, where iZettle is running a trial, never had Visa as part of its service — possibly because of this ongoing issue.

Visa Europe would not say if it was issuing similar orders to other mobile payment providers, but mPowa, which offers a similar kind of product to iZettle’s and Square’s, confirms it is in the clear.

“We don't have a problem because we're not chip and sign,” Dan Wagner, CEO of mPowa, told TechCrunch. In fact, the company has yet to launch and chip-and-pin services at all. These, he says, are coming in two month’s time. The company recently extended its dongle service to cover Android devices as well as iOS. It plans Windows upgrades “in due course” too. He says the company is currently under NDA with “major banks and telcos” to launch white-label versions of mPowa’s payment service in different markets.

Aleksander Soender passed to us the email iZettle sent out to users:

Dear iZettler,

We are sorry to report that based on a policy decision by Visa Europe, we have no choice but to stop processing Visa card payments in Denmark, Finland and Norway on August 1.

Please know that we will continue to accept MasterCard and Diners Club cards, so for now those are the cards you'll need to ask your customers to pay with. We hope we can bring Visa card acceptance back to Denmark, Finland and Norway shortly and will of course keep you posted on the development.

Thank you for your ongoing support and use of the iZettle mobile payments service. We very much appreciate your business and hope iZettle will still prove a valuable service for you.

We wish you a pleasant summer and hope to be back to you soon with news that we've resolved this disappointing situation.

Best wishes, Jacob de Geer, CEO

iZettle also posted about the news on its blog.

Update: iZettle has wanted to make a further clarification on how it differs from mPowa. “We are a ‘one stop shop’ whereas with mPowa you need to sign up separately to get a merchant account with the bank to even be able to take the first payment (and getting a merchant account is often is a lengthy procedure),” notes a spokesperson. “We also offer personal accounts with iZettle for individuals, but mPowa’s service is only for merchants.”

It’s expected that the next-gen iPhone will launch in September, which means that Apple has approximately two more months to keep the specs, design, and availability a mystery. But that seems to be proving difficult, as a brand new video has just hit the web courtesy of Macotakara.

It shows a longer iPhone housing with the same two-tone finish that we saw on 9to5Mac’s leaked images.

There is also an obviously smaller mini-port not unlike the 19-pin mini connector we’ve confirmed here at TechCrunch, and a new speaker grill down at the bottom.

Along with the video came a full gallery of photos from iLab, which seems to reaffirm that centered Facetime camera up front that we’d heard about. Interestingly enough, Macotakara also seems to have additional pieces of the phone that they show off in the video.

Check out the video and images after the break.

The Kuratas Mecha robot is an art/aspirational nerd project by Suidobashi Heavy Industry. This full-sized Mech robot features a ride-in cockpit, “rocket” launchers, and a “smile controlled” BB Gatling gun. That’s right: when you smile, this thing unleashes thousands of tiny plastic BBs.

Unveiled at Wonder Fest 2012 in Tokyo, you can control the robot with either a set of master-slave joysticks or using a more fluid Kinect interface. It runs something called the V-SIDO (Bushido) OS and includes touchscreen support inside the cockpit as well as 3G wireless connectivity so you can control it via phone.

You can “price out” your own Mech here but rest-assured you won’t be able to drive one of these off the lot any time soon. It’s a one-off project and, as cool as it is, it only moves at about 10KM per hour.

There are some who are suggesting this is CG but considering the AFP/Getty picked up some photos of it, it looks about as real as you can get.

via plasticpals

Every few months or so, somebody will declare the death of RSS, and with it the death of old-school feed readers like Google Reader. Don’t tell that to Samuel Clay, though, the founder of NewsBlur, a web-based feed reader that’s in Y Combinator’s current batch of startups. NewsBlur has many interesting features besides the pure feed reading experience, but at first glance, the web app feels like a throwback to the heady early days of feed readers a few years ago. In addition to the basic feed-reading experience, however, the service also lets you curate your favorite stories on Tumblr-like “Blur Blogs,” which bring a strong social aspect to the service.

For the most part, the web version of Newsblur (there are also basic iPhone and Android apps), looks very much like you would expect a feed reader to look like if you are familiar with Google Reader, FeedDemon or NetNewsWire. Feeds and folders are on the left and the headlines and text are on the right.

Unlike standard RSS readers, NewsBlur also features a mode that shows you see a post on the original site and its frontpage. The app detects where a certain story is on a site’s frontpage and automatically scrolls to the next headline as you browse your feeds. Typically, as Clay pointed our when I talked to him last week, feeds take a story out of its context and make every story look the same. With its “original” and “story” views, however, NewsBlur aims to restore some of this context for its users. There is also, of course, a standard text-centric feed view and you can customize the app’s layout according to your preferences.

Another nifty feature is that you can train the application to highlight and hide stories from specific writers on a certain blog, for example, or just see posts with specific tags or keywords. The service then lets switch between different views that let you see every post, your unread posts or just posts that you trained it to focus on. It’s important to note that this filter mechanism is not based on Zite-like machine learning. Instead, the filters just apply to one blog at a time, so when you ask NewsBlur to highlight posts with a certain tag on one site, that filter won’t apply to any other feed you subscribe to.

From Side Project To Y Combinator

Clay first started working on NewsBlur as a side project three years ago. In March, he quit his job at Tasty Labs and has been working on NewsBlur full time ever since. Talking to Clay, it quickly becomes apparent how focused he is on making NewsBlur as fast as possible. There is even a small widget on NewsBlur’s homepage that tell users what the site’s average load time is. The NewsBlur team is also clearly focused on getting the small details right. Clay even developed a crawler that just focuses on making sure the site has favicons for every feed.

Still, the site’s design could use the helping hand of an experienced designer, but as Clay told me, the team is working on a better design and is especially focused on its upcoming iPhone and iPad apps.

Newsblur is a freemium product. Free users can read up to 64 feeds and the service pings those feeds about once pre hour. Paying subscribers can add as many feeds to the service as they want to and NewsBlur will update PubSubHubbub-enabled feeds in real time and e few times per hour depending on their popularity.

For developers, NewsBlur offers an API and the application’s source code is also available on Github (under the very permissive MIT license).

Despite early hiccups Apple’s latest OS X release was downloaded more than 3 million times during its first 4 days of availability. The $20 upgrade brings a host of new features to compatible Macs including Airplay Mirroring, Game Center, system-wide sharing, and beefed-up iCloud integration, which now syncs iWork documents, notes, and reminders.

While Apple doesn’t speculate the reason for the huge download numbers, several factors likely led to the quick adoption rate. First, Apple priced OS X 10.8 to move. At only $20 the new operating system is a rather good bargain even if it doesn’t boast a lot of new features. Apple also made upgrading to Mountain Lion rather easy, which also likely led to more users jumping onto the system.

Thanks to the Mac App Store, upgrading to OS X 10.8 is downright easy. Users simply buy the new OS as if it was another application. From there, the update downloads in the background and prompts users to restart the system when its ready to install. It’s as painless as a system update.

"Just a year after the incredibly successful introduction of Lion, customers have downloaded Mountain Lion over three million times in just four days, making it our most successful release ever," said Philip Schiller, Apple's senior vice president of Worldwide Marketing said in a released statement today.

Mountain Lion was released last Wednesday on the Mac App Store for just $19.99. Read our review here.

Another day, another new incubator coming out of Germany (in fact, it feels like the whole of Europe has gone a little incubator crazy of late): German Startups Group is a new fund set up by Christoph Gerlinger and Alexander Kölpin, both of whom look well-placed to tap the local ‘digital’ startup scene in Berlin with investments of between €50k and €250k, although it isn’t ruling out applications from further afield.

Christoph Gerlinger was founder and CEO of games publisher Frogster before it was acquired by Gamesforge, while Kölpin is a co-founder of BerlinWebWeek and has worked with local startups in a marketing capacity as divisional director of location-markeing agency BerlinPartner.

As early-stage investors look to portray their appetite for deal-flow akin to the enthusiasm with which a puppy chases its own tail, just like every other incubator, German Startups Group is talking up its entrepreneur-friendliness (“We love startups”). Along with an injection of cash for a minority shareholding, the fund will offer initial office space, practical advice and support to companies throughout the startup phase.

Perhaps refreshingly (or not), it’s also placing emphasis on the need to have fun. “Particularly important for a working relationship of several years is that we have fun working together. Therefore the chemistry on both sides has to match”, says Gerlinger.

In terms of investment criteria, German Startups Group is on the lookout for “disruptive innovations for products or business models, high scalability and entrepreneurial talent”, and for those who apply, it also promises “straightforward and standardized investment contracts”, whatever that means. (This is where entrepreneurs really need to do their homework.)

Although German Startups Group says that it has already raised “several million euros”, it’s also inviting other investors to come onboard.

It joins an array of incubators active in Berlin including the likes of Startupbootcamp, makeastartup.com, youisnow.de, Founderslink, Wayra Berlin, Team Europe/Point Nine Capital, FoundFair, Betahaus, and V-Check.

And of course we would be remiss not to mention the formidable Rocket Internet.

Would you get off the couch and into the gym if you could watch Desperate Housewives on the treadmill? If so, you’re not alone: Netpulse, makers of an interactive entertainment kiosk for gym equipment, has just scored a $15 million C round from August Capital and co-founder, David Marquardt, has joined the board. Netpulse is betting that gym-goers, especially those who need some motivation, will be happier with gyms that allow them to have a custom set of on-demand TV, music, and data tracking to make their 20 minutes of cardio less painful.

For city-dwellers who don’t have the time or inclination for real-life nature, Netpulse offers a virtual trek through pristine landscapes, complete with treadmills that adjust the incline in real-time (video below)

If gyms could somehow combine TV with the new trend in “binge” viewership (watching whole seasons at a time), that could be a recipe for some seriously entertaining weight loss. But, don’t get too thin, or you might get booted from gyms that are banning overly-fit patrons who make their heftier clients feel inadequate.

Dow Jones VentureSource has released some figures about European venture capital which we should all take a look at and chew over. The headline news is something that you might not have predicted a few years ago. Given that bigger European tech companies have been largely drawn from the Enterpise/B2B space, it’s significant that consumer Internet companies are now leading the charge. But the trends also show that European tech companies are suffering from too few exit opportunities which is leading to later-stage financing rounds and less deal activity.

According to VentureSource, venture-backed companies based in Europe raised €1.3 billion through 273 venture capital deals during the second quarter of 2012. This represents a 14% increase in capital raised. But at the same time there has been a 20% decline in deals from the same period last year.

Consumer technology services saw the greatest gains of any industry in the second quarter, raising €493 million through 72 deals. This was more than double the €239 million raised during the same period last year “despite only one more deal being completed”. Almost two-thirds of the capital went to the “consumer information services” sector, which includes social media, online entertainment and search companies.

In addition, 62% of deals in the second quarter went to early-stage companies, up from 58% in the same period last year. Early-stage companies also accounted for 32% of capital invested, on par with the second quarter of 2011. Second-round deals accounted for 19% of deal flow and 18% of capital invested, down from 25% and 28%, respectively, in the year-ago period. Later-stage deals accounted for 19% of deals, up from 17% a year earlier, and 49% of capital invested, a significant increase from the year-ago period when 39% of capital went to later-stage companies.

Also in the report:

• During the second quarter, 38 European venture-backed companies were acquired, a 34% drop in deals from the same period last year, and three companies went public, which was half the number of initial public offerings (IPOs) recorded in the second quarter of 2011.

• Through the first six months of this year, venture capital investment totaled €2.2 billion for 550 deals, a 7% decline in capital and 10% decline in deals from the year-ago period.

• The industry trends in the second quarter largely reflect the recently released U.S. investment figures, with Internet and software companies faring well but significant declines recorded in the healthcare and energy industries.

The “data” market is also buoyant. Business and financial services companies raised €144 million for 35 deals during the second quarter, a 58% increase in investment despite a 27% decline in deals. The business support services sector, driven by interest in marketing, advertising and data management companies, raised €108 million through 26 deals during the second quarter, double the amount invested in the same period last year despite a 28% drop in deal flow.

The “IT” industry – or traditional software – raised €215 million for 73 deals during the second quarter, an 18% decline in investment and a 17% drop in deal activity compared with the same period last year. The software sector – traditionally the most popular investment area in IT – fared well, raising €136 million through 54 deals, a 24% increase in investment despite an 8% drop in deals. This shows that traditional enterprise software is not quite dead in the age of the Cloud, although the drop in deal activity is telling.

Significantly, Anne Malterre, European research manager, Dow Jones VentureSource puts the lack of deal activity combined with investment growth down to a “lacklustre exit environment” keeping companies private for longer. The larger financing rounds come from companies need to grow, thus boosting the amount invested.

However, the data shows what we’ve been observing on the ground: VCs increased the percentage of deals done for early-stage companies and their “interest in online start-ups remained strong.”

So something has to give, somehow, at some point in terms of deal flow. Quite what that is remains to seen, but the likelihood is that this year marks the end of the recent cycle and the beginning of a new one where companies wait things out until the next round of exit opportunities present themselves. Just two examples of the end of the cycle are the recent exits of Playfire and Moonfruit. There will be others.

The full Dow Jones information is here.