Where We’ve Been & What’s To Come

Venture capital appears to be defying reason. On one hand, early stage fund raising has declined 48% year-over-year. On the other, there’s a start-up boom. Everyone, it seems, is starting something. And in Silicon Valley valuations are astronomical. What’s really going on?

Venture capital isn’t as attractive an investment as it used to be. 10 year median cash-on-cash returns fell 36% in the 2000s (1). In response, LPs have retrenched. For the past 3 years, venture fund raising has fallen below the 20 year median of $17.2B (2). As a result, today there are 31% fewer funds and 26% fewer venture capitalists than at the peak in 2000 (3).

Startup gestation times have never been longer. The median times to IPO and M&A have more than doubled since 1998, jumping to nearly ten and seven years respectively (4). Additionally, the IPO market is constricted. Over the past 20 years, 97 venture backed companies have gone public annually. Since 2001 we have averaged an anemic 36.

We’re observing a correction in the venture market.  LPs have pared allocations to venture funds and pursued firms with established track records. Since 2005, the average dollars committed to the top 25 venture funds varied between 7% and 57%. In 2011, these 25 firms raised 72% of all new investments.

Faced with longer holding periods, fewer winners and concomitant higher exit values at IPO or acquisition, VCs have concentrated bets, moved up market and invested in select growth-stage companies planning an IPO in 12 to 24 months at heady valuations.

If recent performance benchmarks are any indication, this strategy is rewarding investors handsomely. 10 year venture returns have hovered at 2.6% while trailing 1 year returns have jumped 10x to 21% (1). At least on paper, investors are gaining momentum.

With returns growing, VCs will continue to put money to work. Innovation has rarely occurred in as many different sectors as today. Mobile phones are changing consumer. SaaS software is disrupting the enterprise market. Data center innovation is driven by virtualization of the stack. And new consumer companies, whether gaming, curation or ecommerce are fueled by the massive distribution power of social networks.

However, the looming risk of the European debt crisis will surely temper these investment trends. The correlation between venture backed IPOs and stock market performance has grown much stronger over the past 30 years (5).  As a result, raising capital will be a tale of haves and have nots. Rapidly growing companies will have many suitors, while late bloomers and slow-growers will face a challenging fund raising environment.

Nevertheless, the industry won’t change too much. After all, VCs are always game to find the next great entrepreneur building the next big thing.

(1) Cambridge Associates
(2) VentureSource
(3) NVCA
(4) NVCA
(5) Redpoint Research

 

 

The “Mad Men” Years Are Giving Way to the “Math Men” Era

This post is reprinted from All Things Digital

 

“Advertising is based on one thing: happiness. And you know what happiness is? Happiness is the smell of a new car. It’s freedom from fear. It’s a billboard on the side of the road that screams with reassurance that whatever you’re doing… it’s okay. You are okay.”

Don Draper, Mad Men, Season 1, Smoke Gets In Your Eyes

Advertising is based on one thing Happiness

I wonder what Don Draper would think today when the 23-year old digital media buying whiz quips back, “Maybe, but let’s load it up into the system, along with 5,000 other versions of copy, and measure how many Facebook ‘likes’ it drives within our target demo.”

I love the Mad Men version of the ad business. The storytelling. The simplicity. The glasses of scotch at 10am. But these days in digital, it feels like the Math Men media buyers (with their terabytes of data) are taking over for the Mad Men creatives. It may not make for great TV drama, but they’ve got the performance data to prove that it’s their turn in the driver’s seat.

For years, digital ads were bought and sold by young media buyers from ad agencies and smooth salesmen from online publishers and networks, sealed over the modern version of the “three-martini lunch.” But with the steady advancement in online advertising technology over the last ten years, the geeks — I mean the Math Men — have gained the upper hand in determining how to spend these digital marketing dollars. Today, ad buying and selling is automated across nearly every digital channel, driven by complex algorithms crunching terabytes of data, all employed to meet rigorous ROI objectives — typically measured by new customer acquisition, profit margin, or revenues.

It all started in search, where Overture introduced (and Google perfected) a keyword ad marketplace for search pages. We take that marketer proposition for granted now, but it was heretical at the time — only pay us when a user clicks on your ad (vs. every time we show your ad), and you decide how much to pay for that click (vs. the same price for every advertiser). And sophisticated marketers took full advantage by leveraging technology platforms from Math Men companies like Efficient Frontier to maximize the efficiency of their search ad spend across millions of keywords, bids, and text ad copy.

Since then, several major advances in advertising technology have further enabled the Math Men:

• Six years ago, Right Media introduced the first ad exchange for display ads, enabling the Math Men and their algorithms to buy and sell banner ads and skyscrapers across the Web. Google subsequently perfected the display exchange via their DoubleClick acquisition as well.
• Three years ago, Blue Kai introduced the first ad targeting-data marketplace, enabling the Math Men to leverage anonymous audience targeting data to further enhance marketers’ campaign performance.
• A year ago, Facebook launched its own ad platform API to enable Math Men and their algorithms to bid for Facebook ads based on user attributes. It seems likely that Facebook will eventually extend its monetization platform to third-party publishers, similar to what Google did with AdSense, as Facebook already has a strong distribution foothold via Facebook Connect.

It feels like we are witnessing the tipping point in digital media buying. Measured by dollars or by impressions, greater than 50 percent of online advertising is bought via APIs today (granted, most of this is still search). In a few years, I believe that 90 percent of all digital ad impressions, and more than 75 percent of digital ad dollars, will be bought and sold programmatically.

As we witnessed with search marketing, once a) marketers get a taste of the increased spend efficiency offered by these emerging platforms, and b) these platforms (and the associated marketer tools) become sufficiently easy to use, the dollars will flow, and quickly. The Math Men at Efficient Frontier are leveraging these display, data and social platforms to deliver superior ad spend performance for marketers across all digital channels today. It’s no longer just about search.

And the Mad Men are taking note. In the last few years, the ad agency holding companies have rolled out their own technology-driven digital ad “trading desks” to help their clients’ take advantage of these ad trading platforms. I wonder if they’ve replaced the scotch in the mini bars with the Math Men’s drink of choice, Red Bull.

Chris Moore is a partner with Redpoint Ventures and has been enabling the digital Math Men with investments in Efficient Frontier, Right Media, Blue Kai, Auditude, Inadco, Extole, Intent Media and eBureau. Follow him on Twitter @Redpointvc and @Moorski.

 

Social is the Platform

It goes without saying that social networks have forever changed the way people interact on the web. Facebook recently passed 750 million users, Twitter passed 190 million, and Linkedin has surpassed 100 million users. These platforms have changed the way people shop, play games, conduct business, and discover content and in doing so, have created many opportunities for startups.   

We are firm believers that social platforms will drastically alter the Internet landscape and are excited about our investments in this area, with companies like Kabam, which is developing some of the most engaging games on Facebook, and Branchout, which brings professional networking to the Facebook platform. Additionally, many of our most successful companies like Machinima, Scribd, and Thredup leverage Facebook to reach millions of users.

Social platforms offer several important advantages to early stage companies. With hundreds of millions of users, these platforms offer relatively easy access to an engaged user base through viral communication channels. Users are not only willing, but excited to share information and influence their friends and coworkers. Instead of sifting through a maze of anonymous reviews and interactions, users can now find powerful endorsements by trusted friends or thought leaders. These channels are powerful, as shown through the recent success of Branchout, which managed to grow from 30,000 to more than 800,000 users in a single week!

Despite these advantages, social platforms are not without their risks. First and foremost, there is the obvious threat that the platform may subsume a startup’s core business. Twitter has done this on several occasions, most notably in the client and photo sharing spaces. Additionally, there is the risk of changes to the underlying platform which can alter a startup’s business. Gaming companies like Zynga and Kabam are in the midst of a shift to Facebook credits, a virtual currency required for all Facebook transactions. While credits offer some lift to gaming companies from a simpler buying experience, these credits also shift 30% of revenue from gaming companies to Facebook.  

Despite the risks, we’re incredibly excited by the social transformation we’re observing and we believe social platforms like Facebook can be a great ecosystem for startups. Just as gaming was fundamentally altered by the addition of a social layer, we expect other consumer and business categories such as search, commerce, sales and customer support to undergo similar transitions.  A savvy entrepreneur will successfully navigate the risks these platforms expose to take advantage of their tremendous viral power in creating these new categories. If you know one of these exceptional entrepreneurs, we’d love an introduction!  

 

Weekly Tech News for April 4, 2011

Internet & Media

Google launches +1 a way to share high quality search results and ads. The first social initiative, +1 provides a social signal for use in search quality.

Amazon launches a cloud music service that allows users to upload their own music and stream it from Amazon’s servers, similar to Lala. Free for up to 5GB of storage, each additional GB costs $1. Rumor indicates music labels are dismayed with the offering.

The Fed plans to implement maximum fees for debit cards starting July 21 capping the fees at 0.12 per transaction which could decrease merchant processing costs significantly at the expense of processors. Debit cards accounted for 29% of consumer online spending in 2010 and credit cards 40%, estimates Javelin Strategy & Research.

Warner Bros., Sony, Universal and 20th Century Fox will unveil a premium VOD service called Home Premiere which will stream new feature films for $30. DirecTv is the first launch partner with cable companies to launch the service shortly thereafter.

Mobile

Android is providing early access to software updates to OEMs who do not modify Android base code in attempt to mitigate UI fragmentation. LG, Toshiba, Samsung and Motorola have all modified the core Android OS with interface changes.

Android gained 7% market share in 1 quarter at the expense of the rest of the market.

Facebook released a new richer mobile application after revealing the site services 250M mobile users.

Western Union announced M-PESA integration. M-PESA is a mobile wallet in use by 25% of Kenyans with an average monthly transaction volume of $37. Kenyans’ monthly per capita GDP is $133.

Financings and M&A

Bessemer Venture Partners has raised a $1.6 billion fund, with $1.2B for early stage investment and the remaining $400M for India.

Accel raises two China funds, one for early and one for growth investments, totaling $1.3B.

TidalTV, a video ad optimization company, raises $30M from NEA.

Wix, a web site builder for SMBs, raises $40M from Insight and DAG.Limos.com raises $10M from Austin Ventures.

Salesforce acquires Radian6, a social media presence SaaS solution, for $326M.

BubbleMotion, a mobile voice Twitter with presence in South East Asia, raises $10M from Singtel Capital.

Appia, an alternative mobile app store, raises $10M from Venrock.

GameStop acquires P2P video game streaming company Spawn Labs.

Qihoo, a maker of free antivirus tools, and a Redpoint company, doubles share price on IPO and reaches $3.5B market cap.

Venture Industry

Q1 2011 venture backed IPOs increased 55% from Q1 in 2010 in number, though the average amount raised fell. M&A fell about 10% in volume but M&A value increased 3.6%.

 

Weekly Tech News for March 28, 2011

Weekly Tech News for March 21, 2011

Internet

The NYTimes unveiled a three tier pricing structure for access to the nytimes.com website. Visitors can read up to 20 articles per month free. Afterwards, it costs $15 per month to access the site over PC and mobile, $20 per month for PC and tablet access and $35 for all devices. 

The MLB will stream pre-season baseball games in the Facebook news feed. 

Netflix pays a rumored $100M to acquire exclusive digital distribution rights to British TV show, House of Cards. Netflix represent 61% of paid digital video streams, according to NPD. Comcast commands 8%. Apple, DirecTv and TimeWarner serve 4% each.

The Commerce Department estimates 4.3% of all U.S. retail sales, excluding auto sales, fuel, travel, digital downloads and ticketing, took place online in 2010.

In the past five years, global IPTV subs have increased from 7M in 2006 to than 45M at the end of 2010. The US has 7.2M subs.

40M users' 2 factor authentication tokens built by RSA were compromised this weekend through a social media exploit of an RSA employee's computer.

Twitter users send 1B Tweets per week, up 180% y/y. 460,000 new accounts are added daily. Also, Twitter use is growing among SMBs, according to a study by eMarketer, reaching 20%. 

In a move away from affiliate revenue, Kayak enables customers to book hotel rooms directly through its website to compete with Priceline, Expedia and others. Hotels have much higher margin than airfare.

RIM and Microsoft a partnership that will enable RIM customers to host Microsoft's 365 Cloud Computing suite on RIM's cloud. RIM has 55M subscribers.

Qik launched Video Connect a live or delayed video streaming and video calling service that competes with Justin.tv and Tango.

Facebook hires Amin Zoufonoun, Google's 2nd most senior Corporate Development executive.

Visa announced a new peer-to-peer payment service today in partnership with FiServ and CashEdge. To send money, users enter in the 16 digit credit card number of the recipient.

In a bid to increase site activity, eBay will allow users to list up to 50 items per month for free starting April 19.

Google Ventures offers Google employees $10,000 referral bonus for sourcing investments.

Mobile

Google will test electronic payments using near field communication technology in New York and San Francisco in a partnership with Versign, Bloomberg reports.

Adobe will integrate Medialet’s mobile advertising SDK into Adobe’s Content Viewer software in the Enterprise Edition of Adobe Digital Publishing Suite

Facebook releases Places to all geographies, coinciding with the launch of Facebook Deals, a GroupOn competitor.

Amazon's Android App Store, a curated market place, will launch Tuesday with about 48 apps. Prices seem to be lower than the Google Android store. 

Investments, Filings and M&A

Spigit, a SaaS idea management platform, raises an additional $10M from Warburg Pincus.

2Tor, infrastructure to enable offline colleges to educate students on the web, and a Redpoint company, raises $32M Series C led by Bessemer Capital.

Just-Eat raises $48M for easy restaurant orders: The London-based website for online ordering and delivery has raised a new round of funding led by Greylock Partners and Redpoint Ventures with participation from Index Ventures.

Doximity, a new health IT company from the founders of Epocrates, secured a $10.8 million Series A venture capital investment from Emergence Capital Partners and InterWest Partners

Jawbone, the maker of smart wireless headsets, said today it has raised $49 million from venture capital firm Andreessen Horowitz.

GroupOn is said to pursue an IPO with a $25B market cap.

Tencent reported $2.97B (+58%) in revenue and $225.4 million (+55%) in earnings at 67%

Facebook acquires Snaptu, developers of mobile porting software for feature phones. 

AT&T Inc. has agreed to buy T-Mobile USA from Deutsche Telekom AG for $39 billion in cash and stock

Weekly Tech News for March 13, 2011

Internet

20M users log into XBox Live daily amassing 4B hours of play, about 500M hours per year.

AOL cut 20% of its workforce, slashing 900 jobs after the Huffington Post acquisition. Traffic on many core properties fell 50% y/y as the giant struggles to find growth.

Twitter revealed 90% of Twitter users use an official client in a statement advising developers to stop building Twitter clients. 

Microsoft set the record for fastest adoption of a consumer product selling 10 million Kinects since November.Facebook launched a new analytics platform which provides data on like button performance, commenting activity, demographic make-up and organic sharing data.

Skype reached 145M MAU with 8.8M (19% m/m) paid members with an average annual revenue per user of $97. Net revenues reached $860M (+20% y/y) and EBITDA grew to $264M (+43%) with a net loss of $7M. Skype acquired mobile video startup Qik in January for $121 million in cash with $29 million in additional payments.

Spotify reaches 1M subscribers, up from 650,000 in November. The company offers a £9.99 and £4.99 option.

Mobile

Google revealed 40% of Google Maps usage is mobile across a user base of 150M mobile users, up from 100M last August, presumably fueled by Android growth. In addition, Google launches local offers available when checking in on Latitude - a direct competitor to offers on FourSquare. 

Apple has added an additional password request when purchasing virtual items, after uproar of children charging large amounts of games and virtual goods to parents' accounts. This will likely decrease in app revenues.

Microsoft will pay Nokia $1B to build Windows Phone 7 handsets. 

OpenFeint and The9 launched a $100M Android developer fund to spur Android game development using OpenFeint's SDK. The program will offer assistance in porting games from iOS to Android. ScoreLoop announced a similar program, without comparable funding.

Walgreen's revealed that more than 50% of all refilled subscriptions are scanned and ordered by Refill By Scan, a mobile application that scans the barcode on drug bottles. The app refills the order automatically. 

WSJ announced 200,000 iPad subscribers at with an annual subscription rate of $208. 

Macquarie Group reports Google receives 97% of mobile paid search spend, based on Efficient Frontier data.

Some Instagram figures were made public. 130,000 new users join each week. The 2.2M users add 3.6M photos weekly. 

IPOs and Exits

Homeaway files for $230M IPO on $168M (+40%) in 2010 revenue and net revenue of $17M (+118%).

Google acquired price comparison website BeatThatQuote.com for £37.7 million.

YouTube acquired online video production company Next New Networks.

Financings

Rovio, makers of AngryBirds, raised $42M from Accel and Atomico.

Kik, a BlackBerry Messenger lookalike on iOS and Android, raised $8M from RRE, Spark and Union Square.

SpareFoot, an online listing of self-storage units, raised a $1.5 million inside round. 

 RelayRides, a P2P car sharing service, announced a $5.1 million investment from August Capital and Google Ventures.

Breezy, a mobile printing company, raised $750k from Accel, Felicis and Softech.

HubSpot, provider of online marketing tools for SMBs, raised $32M from Salesforce, Sequoia Capital and Google Ventures.

OneFineStay, a full service apartment rental company, raised $3.7M from Index Ventures.

StumbleUpon raised $17 million from Accel Partners and First Round Capital.

GrubHub, a local food delivery site, raised $20 million in Series D funding led by DAG Ventures with Benchmark Capital participating in the round.

Credit Sesame, a Mint for credit raised $6.2M from Menlo Ventures.

RadiumOne, a social ad network, raised $21 million at  $200M valuation from Crosslink Capital.

VigLink, an automatic affliliate ad network, raised $5.4 million from Emergence Capital

Omar Hamoui started Churn Labs along with AdMob’s first engineer, Mike Rowehl. And he’s partnered with Sequoia Capital, one of AdMob’s first venture investors, on the new project.

SnagAJob.com, an online community of hourly workers, raised $27 million from August Capital.

Weekly Tech News for March 6, 2011

Internet

Skype announced an enterprise grade video conferencing product with document sharing to be release in late Q3 2011.

Kayak will provide travel search results for Bing in a new partnership between the two companies. The DealMap will provide aggregated daily deals for Bing.

Sony announced 70M PSN users, 70% of whom connect to the service weekly. This is more than twice the size of paid service XBox Live, at 30M users.

33% of U.S. consumers, 75% of Brazilians, 65% of Chinese and 52% of Indian polled say they are likely or very likely to purchase a vehicle online, according to a survey by Capgemini.

Groupon launched GaoPeng.com, a Chinese joint venture with Tencent.

33% of QVC sales are now ecommerce.

MeFeedia released data indicating 63% of the 30 million videos in its index are now HTML5-compatible, up from 10% a year ago, 26% last May, and 54% in October.

Mobile

Android has now reached 29% US installed based market share, compared with RIM's 27% and Apple's 27% according to Nielsen. Android has disproportionate share of 18-24 year olds, likely due to the lower cost of devices.

 

 

Apple released the iPad2, a minor update that adds a front and rear, low resolution camera. The new iPad case may be the biggest innovation. In addition the company reported  200M Apple IDs (reportedly the largest collection in the world of credit cards), 100 million iPhones sold, 100 million ebooks downloaded on iBooks, and $2B in developer royalties. Apple launched the iPad2.

Random House, the world's largest publishing house acceded to Apple's eBook revenue share and began distributing eBooks on the iTunes store last week. Random House is the last of the top 5 houses to distribute books on iOS.

Angry Birds reaches 30M downloads on Android.

Google is going to initiate a “remote kill” function that lets it zap applications on any infected phones from afar. Google also released new SDKs for combating platform fragmemtation. Today, 57.6% of devices run Android 2.2 and 31.4% run 2.1.

The wireless data market grew to $55B in 2010(+23% Y/Y) representing 40% of carrier revenue up from 5% in 2004, according to Chetan Sharma Consulting. US mobile penetration reached 100%. Connected devices comprise 7% of the installed base, up 55%.

Jambool, acquired by Google, announced the team is building the in app payments functionality for Android, slated for May release.

Square processes $1M in GMV daily. The company is adding 50,000 SMBs each month.

China Unicom, the second largest Chinese carrier with 15.5M 3G subs, revealed a new mobile phone OS based on Linux. ZTE, Huawei, Motorola and HTC have committed to producing handsets running the OS.

Unity Technologies released the first 3D graphics engine for Android devices. The company also announced 400,000 developers are using the toolkit.

40% of Angry Birds gamers buy assistance in the game through in app purchases. 

Financings

MyLikes, an advertising platform based on spreading personal product endorsements through social networks, announced today that it raised a $5.55 million in Series A led by Khosla Ventures.

Egnyte, a white label cloud storage provider, raised $10 million from KPCB.

WeatherBill Inc. raised $42 million in Series B funding from Google Ventures and Khosla Ventures.

Boxee raises $16.5M from Pitango and Softbank

CrowdGather, a roll up of forums, raised $7.85M in Series A. 

ContextLogic, maker of NLP analysis technology, raises $1.7M from SVAngel and a large group of angels.

CBS acquires Clicker, a TV guide on the web, for an undislosed amount.

Facebook acquires Beluga a group messaging company founded by a team of NYC Xooglers.

AOL acquires Outside.in, a local news aggregator, for an undisclosed amount.

Google acquires Zynamics which builds reverse engineering tools to prevent security vulnerabilities.

MyBuys, a provider of product recommendations technology, raises $20M from Rho, Lightspeed and Palomar.

Andreessen Horowitz has named former IronPort Systems Inc. co-founder and chief executive Scott Weiss as its fourth general partner–a move that is in keeping with the firm’s entrepreneur-friendly philosophy.

Greylock Partners raised its newest fund, $1 billion up from $575 million with $200M allocated to growth investments.  In the last fund, growth stage companies represented 40% of invested capital .

 

Weekly Tech News for February 27, 2011

Internet & Media 

Microsoft releases Facebook chat to all Hotmail users, becoming the first email platform to do so.

Google changes core algorithm to demote content farms. The shift will impact 12% of search results and is intended to reduce the rankings of content farms and sites with duplicated content. 

Skype releases Skype to Go, a low cost international dialing service for all phones. Skype converts an existing landline to a new Skype number to enable low cost calling. Skype announces 30M peak concurrent users.

eMarketer releases data comparing Facebook and Twitter penetration in the US. Twitter grew twice as fast in 2009, but its growth rate has fallen behind Facebook in 2010. 

AOL restructures media to be run by Ariana Huffington. President David Eun resigns.

PlaySpan released forecasts projecting 110M (58%) internet users in Brazil and $517M in annual virtual good sales by 2012, growing at 50% y/y. 

Netflix has signed a video streaming deal with CBS. Netflix is the only streaming provider with content from the Big 4 networks.

Amazon launched Amazon Prime video, a movie and TV show streaming service free for Prime member and $79 for non-Prime. 

AirBnB announces 1M nights booked with 65% m/m revenue growth from Dec 2010.

Mobile

8.5% of paid search impressions are on mobile devices according to a study of 175 Performics customers.

The Android market has a books section that competes directly with iBooks and Amazon's Kindle. 

The Federal Trade Commission is reviewing Apple’s in-app purchase system because of concerns about children buying virtual goods and currency without realizing the actual cost.

FourSquare is approaching 7M users.

SCVGR announced 1M users and is adding about 10,000 users per day. 

Square eliminated its 15 cent transaction fee, relying instead on a 2.75% GMV charge for revenue. The company is acquiring 30 to 50,000 merchants per month.

Investments, Liquidity and M&A

Goldman Sachs invests $70M in AppSense, a user information virtualization company.

Gilt Groupe is said to be raising a $100M round at $1B.

Intel Capital invests $12M in Digital Chocolate. Digital Chocolate announced the company had reached 29M MAU and 4.2M DAU.

Box.net raises $48M from Meritech and Andreessen Horowitz.

JP Morgan has raised a $1.2B high growth private equity fund.

OpenMile, an online freight brokerage, raises $6M from GlobeSpan.

Gogii, a free text messaging application sending 32M messages per day and 7.7M MAU, raises $15M from GRP partners.

TinyCo, fka Brooklyn Packet, raises $18M from Andreessen Horowitz.

Paydiant, a stealth mobile payments company raises $7.6M from GC and North Bridge.

ContextIn, a stealth DSP, raises Series A from Spark and Pitango.

Disney acquires Togetherville for an undisclosed amount.

BookRenter raises a $40M inside round.

Peter Wagner leaves Accel after 15 years.

Weekly Tech News for Feb 13, 2010

Internet & Media

In effort to decrease the number of new developers using the Twitter feed directly from Twitter, the company will no longer accept new unlimited API requests, likely sending newcomers to data reseller Gnip.

Web email usage declined 59% among teens, 1% in 18 to 24 year olds and 18% in 25 to 34 year olds in 2010 according to Comscore.

The average Facebook user spends 25 minutes per day on the site up from 23 minutes last year and visits the site 2.8 times per day. Users spend 13% of their time on the web on Facebook, according to Comscore.

Bing increased search market share from 10.4% to 12.0% in 2010, at the expense of Yahoo and Ask. Google increased share from 66.0% to 66.6%, according to Comscore.

Spotify sent letters to subscribers indicating the service will launch in the US in the next few months.

StumbleUpon reached 500M monthly page views and 28M daily stumbles.

Mobile

Nokia partnered with Microsoft announcing the handset maker would shift over the next year to producing phones nearly exclusively running Windows Phone 7. Nokia shares sank 14% on the news. Nokia's maps and billing relationships will be incorporated into the OS.

RIM is rumored to be integrating Android into the OS of their new tablet, the Playbook. 

Mary Meeker released data indicating SmartPhone and Tablet sales exceeded PC sales for the first time in Q4 2010. 3G subscribers increased to 726M, with the US leading the world at 141M subs, 47% penetration.

ComScore released the state of the mobile world report:

U.S. smartphone adoption reached 27 percent of mobile subscribers in December 2010, an increase of 10 percentage points from the previous year, while European adoption reached 31 percent, also up nearly 10 points versus year ago.

36 percent of mobile Americans and 29 percent of Europeans browsed the mobile web in December 2010, with access through an application reaching 34 percent of Americans and 28 percent of Europeans.

Over the past year the number of mobile users that accessed a social networking site at least once a month via their mobile device increased by 56 percent to nearly 58 million users in the U.S.

HP revealed 2 new phones and a tablet running Palm's WebOS. The Pre2, a business phone with a slideout keyboard and the Veer, a credit card sized consumer phone.

Sony demonstrated the Xperia Play, also known as the Playstation Portable or PSP phone. The phone has a game controller under the slide-out screen and runs Android. Sony has signed 20 publishers including EA, Gameloft and Glu to develop titles in addition to ports of Sony Playstation games.

Samsung unveiled the Galaxy II, the successor to the first Android phone to sell 10M units. The Galaxy II will run Game Hub, a Samsung software that will compete for gamers with Sony.

AT&T and OpenFeint announced a partnership that will bring OpenFeint's gaming platform to Android developers on AT&T phones. 

BlackHawk released a mobile applications to enable users to create personalized gift cards on their mobile devices which are delivered through Facebook or email.

Opera claimed 100M users of Opera Mini, a mobile browser. The company recorded 90M users in late 2010. Opera's market share remained steady at 21

A survey completed by the world's largest provider of hosted Exchange, InterMedia, revealed that 49% of US SMB users access work email using iPhones, 25% using Blackberries and 13% use Android.

Earnings

Akamai announces $1B (+18.6%) in revenue and $171.2M (+17.3%) in net income.

eBay announced PayPal would comprise 50% of total revenues in 2011 up from 33% in 2010.

Financings, Liquidity & M&A

Pandora files for IPO with $90M in trailing nine month revenue, 87% from ads and 13% from subscriptions, on a net loss of $328k. Pandora's userbase is 80M. The company paid $45.4M in licensing fees.

HTC invests $40M in streaming video game provider, OnLive and acquired mobile video company Saffron Digital for $40M.

Visa acquires virtual goods monetization platform PlaySpan for $190M.

TenCent acquires a majority stake in Riot Games for $400M.

Motorola acquires 3LM, an Android security company.

HP acquires database provider Vertica for an undisclosed amount.

Zynga is raising $250M at a $9B valuation.

JPMorgan announced a $500 to $750M media fund.

eBay revealed it owns 49% of Magento and invested $22.5M in the marketplace in March 2010.

Andreessen Horowitz announced they had invested $80M in Twitter via secondary share acquisition.

Raptr, a cross platform gaming communication system, raises $15M form DAG, Accel and Tenaya.

Glassdoor, a job review site, raises $12M from Battery Ventures.

Meraki, a wireless networking company, raises $15M in follow on financing from Sequoia.

Abe's Market, a market place for natural goods, raises $3.4M from Accel.