American Express, the company well known for overpriced charge cards, is buying Ted Leonsis and Steve Case’s Revolution Money for $300 million. Leonsis shared this information on his blog. Amex wants to use Revolution Money to build a next-generation offering. Revolution Money has some kind of a next-generation payments technology that brings together offline and online worlds; it’s part of the Revolution group of companies floated by Steve Case. No one I know has either seen it or actually uses it. If there is one company that is going to do offline-online payments, that will be PayPal.

Intel today said it’s invested an undisclosed amount in Joyent, the 6-year-old Sausalito, Calif.-based startup that started out as a web hosting company but eventually evolved into a cloud service provider. Neither Intel nor Joyent disclosed the amount of money invested, but Intel’s investment in the company is a strategic bet for the chipmaker, as it faces a smaller end user base for its silicon thanks to enterprises turning to computing delivered as a service to help limit the number of servers they buy. First the deal specifics.

Intel Capital has invested $8.5 million into the company, as per a filing with the Securities & Exchange Commission.  Sources tell me that Dell has also invested an undisclosed amount of money in the company. Dell has not returned my request for comment, but the company has been supplying gear to Joyent for a long time. Joyent shifted vendors from Sun to Dell over two years ago, a move I wrote about. Previous investors in the company include Peter Thiel, former PayPal-executive-turned-hedge-fund-investor whose investments include Facebook.

Jason Hoffman, CTO Joyent @ Structure 09 Conference

I emailed Joyent CTO Jason Hoffman, who declined to comment on either the total funding raised or the other co-investor. He added that the company engaged with Intel Capital after meeting them at our Structure 09 conference, held in June in San Francisco. One thing led to another and eventually, the funding took place. Hoffman said that the company plans to use the money to make an aggressive push into China and other Asian economies where demand for IT infrastructure is growing at a rapid clip. (Related research note from GigaOM Pro, sub. req’d.: Why Bringing Cloud Computing to China Is Joyent’s Golden Opportunity.)

So why the Dell and Intel interest in Joyent? I’ve been talking to a lot of folks involved with the cloud computing industry, and there has been a growing concern with the Cisco-EMC-VMware joint venture company.

Joyent isn’t a mere service provider, but has actually built a software competency, which makes it one of the strong contenders in the cloud computing market, especially as large enterprises look to build private clouds. Joyent has been aggressively helping companies build private clouds based on its software delivered on Dell machines. There are several significant companies that are using Joyent’s offering. For Dell (or any server maker), that is the kind of push that is necessary as the bulk of enterprise customers beginning to buy their compute hardware as a service.

In an email to his partners, Joyent CEO David Young wrote:

Joyent plans to take cloud computing to a place where our  competitors, built on virtualization foundations such as VMware ESX, Microsoft HyperV, Xen, KVM, won’t be able to go. That made the decision to raise money a clear choice and one that translates into greater benefits for Joyent, its customers and the market-at-large. We see a clear opportunity, and we intend to race towards it.

Intel Capital agrees with our vision for the market, as said best by Lisa Lambert, Managing Director of Intel Capital:

“Cloud computing technologies play a crucial role in allowing companies to scale their data center infrastructure to meet performance and TCO requirements. Joyent’s approach to flexible and cost-effective cloud control and cloud development sets it apart and provides measureable performance advantages versus the competition in this fast growing sector.”

It’s no wonder that Dell and Intel want to get in on a piece of this market while they still can.

Norwest Venture Partners (NVP), one of the most respected funds in Silicon Valley, says that it’s closed NVP XI, a $1.2 billion fund that will invest in diverse sectors and geographies. NVP, which recently recorded a major hit with the $405 million sale of video conferencing equipment maker LifeSize, is one of the few venture funds to close a mega-fund. Khosla Ventures ($1 billion) and Greylock Partners ($575 million) are two other partnerships that have been able to raise mega-funds. At the same time, there have been numerous reports of many partnerships struggling to whip up interest in their second or third funds. “Track record is what that matters,” said Promod Haque, general partner with NVP, in a conversation earlier today.

Haque’s track record is a mile long. In the last bubble, he rose to prominence with the mega-billion-dollar sales of Cerent (to Cisco), Siara (to Redback) and several other telecom and chip companies. Norwest, which has been investing for about 48 years, has raised a total of $3.7 billion. Haque explained that NVP would continue to invest in companies of all shapes and sizes in the U.S., India, China and Israel. In addition, NVP is also going to focus on health care IT and medtech.

“Health care and medtech (and genomics) are increasingly becoming software-centric and we have expertise in software investments,” Haque said, explaining his rationale behind the investments. Norwest, which also was the largest investor in Rackspace is bullish about the prospects of cloud computing and broadband-focused startups, such as Cyan Optics. (Read my post about Cyan.)

I asked Haque how he reconciles investing in early-stage companies and his late-stage investments — after all, they do need completely different mindsets. He doesn’t think so, saying the only difference is in the number of checks he writes as an investor. “In growth-stage companies, we write one big check, but in early-stage companies you write multiple checks,” he said. “Startups that are on the right track and growing fast need a lot of cash.”

Photo source: Flickr user aresauburn.

This morning news broke that MySpace, the second-largest social network that’s currently reinventing itself as a music destination, was buying imeem, a free online music service that has been remixed (and remade) more times that ’90s dance anthem “Keep on Moving.” TechCrunch, which reported on the news, didn’t reveal what the deal terms were. I have been dialing sources for information, and have found an interesting backstory behind this sale.

First, it was essentially a fire sale. Imeem, which in the past has been threatened into submission by large music labels, was feeling the heat from second-tier music labels wanting to get their pieces of flesh. On Oct. 21, The Orchard Enterprises, one of the largest independent record labels, sued imeem in U.S. District Court, Southern District of New York. According to the suit, imeem had to pay $150,000 per infringement. On those terms, for multiple infringements, the total could have run into billions of dollars.

Remember the billion-dollar lawsuit filed by Viacom against YouTube? Imeem, I’m pretty sure, knows how painful it is to fight the record labels in the courts. The company fought Warner Brothers, but had to eventually settle by giving up equity in the company. A long, bruising battle is something imeem couldn’t quite afford since it was running low on cash. And it couldn’t pay these guys off. By selling to MySpace, which already has arrangements with The Orchard Enterprises, some of these legal threats might go away. Interestingly, with this deal, record labels that owned a nice chunk of imeem could see their equity in MySpace Music go up as well.

At the same time, founder & CEO Dalton Caldwell hadn’t been able to rustle up more cash. I bet the investors who have pumped in more than $35 million (including $10 million in debt) got tired of putting more cash into what seems like a bottomless pit. Back in September, news emerged that Sequoia Capital, one of the long-time backers of imeem, opted out of funding the company. Back in May, Warner Brothers wrote off a $16 million charge, but gave imeem new money and forgave future royalty payments in exchange for more equity. Fat lot of good that did them.

I have been fairly skeptical if imeem and their ilk, mostly because I felt that they cut bad deals and had painted themselves into a corner. Frankly, I am not that hot on MySpace Music, either. MySpace earlier bought iLike, another free music service, for $10 million — a firesale price – mostly to get hold of the talent. The bargain basement sales of iLike and imeem once again shows that the online music industry remains as risky as walking through a minefield punch-drunk.

Well, I guess when the company had a choice between locking the doors or teaming up with MySpace, it wasn’t a hard decision to make.

Motorola and Verizon, thanks to their $100 million marketing efforts, are going to sell some 600,000 Droids during the fourth quarter of 2009, according to Mark McKechnie of Broadpoint AmTech, a boutique research firm. He had initially expected about 200,000 device sales following the launch, but he has upped his forecast: Motorola should sell another 200,000 Droids by Black Friday and 150,000-200,000 during the remainder of the holiday season. This would bring the total to some 600,000 Droids for 2009.

We recently reported the findings of a study from Flurry that indicated Motorola might have sold close to 250,000 Droids in the first week of its availability. McKechnie’s forecast adds credence to Flurry’s findings. McKechnie expects that Motorola will sell about a million Android-based phones during the quarter. That works out to 400,000 CLIQ (also known as Dexter) sales on T-Mobile, Orange, Telefonica and America Movil.

According to Broadpoint AmTech estimates, Motorola should sell about 10 million Android units in 2010 with an average selling price of $286. The company is planning to have about 20 different smartphone models in 2010 and will be selling on most major carriers in the U.S. Each Android unit contributes four times the gross profit of a feature phone unit; those 10 million Android units will contribute nearly half of the gross profits in Motorola’s handset division.

Wow…I had completely forgotten about RockYou, a Redwood City, Calif.-based startup that started out as a widget maker but then turned social app developer and now is trying out hawking virtual goods. Sort of like the company it loves to imitate: Slide. RockYou made a splash today by raising a whopping $50 million in new funding from existing investor Softbank. That brings the total funding raised by the 4-year-old company to $119 million. My view is that if the first $69 million didn’t make RockYou into a real, profitable business, what are the odds that the new $50 million will? Not very high!

Evernote, a Mountain View, Calif.-based company that makes one of my favorite cross-platform apps, called (what else) Evernote, has raised $10 million in new funding. The new round was led by Morgenthaler Ventures, a respected Sand Hill Road firm with a deep history. Evernote had previously raised $6.5 million in VC funding. Phil Libin, Evernote’s CEO, tells The New York Times that he is going to be using the money to expand to new geographic markets and add new platforms. At present the app works on Android, iPhone, BlackBerry, Mac, PC and Palm’s WebOS. As you all know, I am a big fan of the application and its freemium business model. It probably is the single most useful app on my computer and my phones. (Related articles from WebWorkerDaily: Evernote Wants to Be Your Long-term Memory and How to Use Evernote for Collaboration.)

If you read the reviews, it becomes obvious that I am part of a small minority of folks who haven’t been blown away by the new Droid, a Google Android OS-based smartphone made by Motorola that Verizon Wireless launched Nov. 5 in the U.S. All the accolades are actually turning into smashing sales for the Droid, according to data collected by Flurry, a San Francisco-based mobile analytics company. How big are the sales? (Find out below the fold.)

We have been following the Droid pretty closely, and once we learned that the device had a solid (if not blockbuster) weekend, we decided to get a better grasp of the Droid-fever that seems to be spreading across the nation. Flurry, which tracks the usage of mobile applications across various platforms, ran a query at our behest to get us a clearer (if not totally accurate) picture of the Droid launch and its market penetration.

Flurry has come up with a stunning number: 250,000 Droids sold in the first week vs. 1.6 million iPhone 3GS devices sold in the first weekend. Apple said it sold over a million devices in the first weekend of the launch of iPhone 3GS, so 1.6 million is pretty close to the mark. There has been talk that nearly 200,000 units of Droid were on the shelves at the time its debut, so it is not far-fetched to peg the total sales for the week at 250,000. (Related post: “iPhone 3GS vs. Droid: How Do They Really Stack Up?”)

Flurry monitors about 10,000 apps across iPhone and Android and claims that it tracks apps on approximately two out of three unique iPhone and Android handsets. To estimate first week sales totals for the myTouch 3G, Droid and iPhone 3GS, Flurry detected new handsets within its system, and then made adjustments to account for varying levels of Flurry application penetration by handset. Flurry additionally cross-checked its estimates against Apple actual sales, released for the iPhone 3GS, which totaled 1 million units sold over the three days of sales, June 19-21. [Flurry statement]

If Flurry results are accurate, then Motorola and Verizon have a winner on their hands. This is the fastest-selling Android device to date. It also helps that Motorola and Verizon have budgeted $100 million to promote it. As the gadget makes it way across the world, one can expect sales of Droid to go higher. Motorola predicts it will sell a million units by the end of 2009. That works to about $100 per customer in acquisition costs for Motorola and Verizon. (Related posts: “What You Need to Know About the Droid” and “What Are the Downsides to Droid?”)

The average Android app session length is about four minutes vs. two minutes for iPhone apps, Flurry found. I believe that is because the Android apps are not as intuitive to use as the iPhone apps, but hey, that’s just me. What do I know — I don’t think Droid is that hot, and it sold a quarter million units in week one.

PS: Check out this great comment from one of our readers, Nicholas. “Currently, we are witnessing the evolution of mobile technologies past the computing paradigm of laptops, desktops and workstations, and Motorola needs a more cohesive idea of what can and will be accomplished in the mobile space,” he writes. Agreed — and that is why I find MotoBlur, the company’s communications-based interface, more interesting than its hardware. It could, with some work, become the new way of consuming large amounts of data.

Hulu, the online video joint venture of NBC, Fox and Disney that’s funded by Providence Equity Partners, seems to be having familial issues. No, it’s not YouTube or TV Everywhere giving the second-most popular online video service in the U.S. headaches. Instead, internal bickering is causing problems, MediaWeek reports. This is not the first time Hulu’s parents have undermined the service. But it comes as a surprise — traditional media companies have a long history of snatching defeat from the jaws of victory. Continue reading on NewTeeVee.

If you’re a baseball fan like I am, then you know that it in order to win, teams need more than just marquee stars. The role players, pinch hitters and relievers — all have to contribute in order for a team to win. A weak link can blow a game. Same goes for companies — every member of the team has a role to play. Why do I bring this up? Apple’s iTunes App Store and its murky and muddled policies.

Apple’s designers and engineers have done a good job putting together what is an iconic product, the iPhone. Its software gurus have helped foster the app revolution. But it when it come to the App Store approval process, Apple is blowing it.

Let me put it in terms Apple and its management can understand: The foggy and opaque App Store approval process is as big a disaster as Dell’s DJ MP3 Player.

For months now, I have watched the twists and turns of the Apple App Store drama with a degree of bemusement. After all, the rejection (or approval) of quirky and pointless apps aimed at hormone-challenged post-pubescent boys weren’t of concern to me. I couldn’t get upset over Google Voice fiasco, but that was understandable (not acceptable) because it was coming in the way of the carrier voice service.  But lately, things have gotten a bit out of control.

The irrational approval process and reasons behind it given by the apparatchiks of Cupertino are driving developers to extreme frustration — especially those who have been Apple loyalists for years. Earlier this week, Joe Hewitt, a well-known programmer and a Facebook employee, threw up his hands in frustration over Apple’s App Store approval process and said he wants to work on a different project. (Check out my video interview with Joe Hewitt.)

No, Facebook isn’t killing its iPhone app — it is a corporation, after all, and will bend over backwards to appease Apple — but Hewitt is someone who’s made many vital contributions toward turning the iPhone into a major platform. He was carrying Apple’s water long before the rest of the 100,000 apps showed up, which is just one of the reasons why he was nominated to GigaOM’s Top 15 Mobile Influencers List earlier this year. When he speaks, I listen — plain and simple. And he expressed his anger in 140 characters.

Today, Rogue Amoeba, a company that is well-known within the Apple community for its audio-focused products, is publicly beating its head against the Great Wall of Cupertino.

Rogue Amoeba wanted to ship a bug fix for their app, Airfoil Speakers, but it took the better part of four months to get it approved. It was an arduous process, one that made the inner workings of the government bureaucracies look like a model of efficiency. The net-net, as described by company CEO Paul Kafasis in a blog post, is this:

First, be aware that Apple is acting as a gatekeeper, and preventing you from getting the software that developers such as ourselves are trying to provide you. We wanted to ship a simple bug fix, and it took almost four months of slow replies, delays, and dithering by Apple. All the while, our buggy, and supposedly infringing version, was still available. There’s no other word for that but “broken.” Right now, however, the platform is a mess. The chorus of disenchanted developers is growing and we’re adding our voices as well. Rogue Amoeba no longer has any plans for additional iPhone applications, and updates to our existing iPhone applications will likely be rare.

Others, such as programmer Jeff LaMarche, disagree with the disenchanted developers and have come to the defense of Apple. But I’m more inclined to side with Kafasis, as this is a problem that flares up more often than California wildfires.

John Gruber, who pens the Daring Fireball blog and is one of the most respected Mac-related writers out there, offers a very balanced view of the situation — and finds Apple at fault. “At a certain point good developers are just going to say, ‘I don’t need this,’” Gruber writes.

Gruber, as we’ve seen in the past, has the ear of the senior management at Apple. So perhaps his fair and balanced assessment is going to help Apple wake up from its stupor.

Apple has a very serious problem on its hands, one that can derail its grand plan. It needs to fix this as quickly as possible. Otherwise the company is going to blow the game in the bottom of the ninth — much like the Phillies in Game 4 of the 2009 World Series.

Google’s Android OS-based phones and Apple’s iPhone maybe get all the media love, but one analyst firm believes that it will be RIM’s BlackBerry that will be the smartphone king of the U.S. market in five years. Pyramid Research expects the device to be the biggest beneficiary of the move to smartphones.

According to their research, smartphones represented 31 percent of the new handsets sold in the U.S. in 2009, more than double from 15 percent in 2007. They expect 60 percent of the new handsets to be sold in 2014 to be smartphones. The BlackBerry, which currently has 50 percent of the total U.S. smartphone market, will see that share decline to 37 percent, but the increase in terms of total smartphone sales is going to keep it ahead.

Kevin Lynch, CTO of Adobe Systems one of our speakers. Photo by James Duncan Davidson

Unlike the spritely young team members of NewTeeVee, I am dragging my feet after what was an intense day yesterday. Well actually I was having too much fun at our third consecutive sold-out NewTeeVee Live conference in San Francisco. Great speakers, great attendees and great curators — that is our magic formula for our events. I wanted to take a moment and thank everyone who attended the event for making it a success.

I enjoyed meeting many of you in person, and those of you I missed, well I’m only an email away. Thank you to our sponsors and our media partners for helping us with the event. A big shout-out to Lindsay Campbell, former host of “WallStrip,” for being the gracious MC. I also want to thank our friends at LiveStream for making the video available over the web and on the iPhone. I’ve never regretted partnering with such a great streaming service — they are the gold standard for live event video. We served up nearly 30,000 unique streams yesterday and today. Total time spent watch the stream: 671,000 minutes. Thank you Engadget, Comcast and Hacking Netflix for embedding our video stream.

Liz & Chris have published a CliffNotes version of the day’s events and links to extensive media coverage generated by NewTeeVee Live, which has now become the must-attend gathering for the online video industry.

Qualcomm has just released a new chip family focused on smartphones, including one that breaks the gigahertz barrier. The chips’ capabilities make clear that the line between phones and low-end notebooks are blurring. They’re based on the Scorpion CPU that is at the heart of Snapdragon chipsets and uses an 800 MHz to 1 GHz custom ARM-based CPU.

This new chip family, the horribly named MSM7×30, can do 720p HD video (encode/decode), 2-D and 3-D graphics, and has surround sound, integrated GPS and a 12-Megapixel camera as well as all the usual trimmings like Bluetooth and Wi-fi and FM Radio 3G (both flavors). On the multimedia front, Qualcomm is playing catch-up Texas Instruments and Nvidia. The new chips work with all smartphone operating systems except Apple’s iPhone OS. They will be launched sometime next year and are optimized for the web experience.

First Cisco Systems decided to buy Norwegian video conferencing equipment maker Tandberg for about $3 billion. This week, Logitech, a Swiss computer peripherals maker, acquired LifeSize, an Austin, Texas-based private company, for about $405 million in cash. The two deals have brought the fast-growing but often-overlooked video conferencing market into sharp focus. And that is good news for Polycom, a Pleasanton, Calif.-based conferencing equipment maker, CEO Bob Hagerty boasts. Here is why:

Hagerty said he thinks his company’s independent status will make it a preferred partner for giants such as Microsoft, IBM, Avaya and Hewlett-Packard, as they duke it out with Cisco and Logitech. The stock market seems to agree with him: Polycom stock is up 9 percent this month and up 77 percent for the year to date. When I asked Hagerty if this makes him takeover bait, he predictably dodged my question.

The simultaneous growth of pervasive broadband, improved compression codecs, distributed work forces, and shrinking travel budgets are brewing a perfect storm for the video conferencing market. “Bandwidth today is adequate, and we will soon be able to make HD video calls on a 500kbps connection,” he said. Hagerty believes that is going to help the use of video conferencing explode.

For a company like Polycom, the future might involve offering cloud-based services that could handle video originating from multiple locations using a central service. From low-cost end points to high-end telepresence systems, video-based collaboration is going to be a standard, he argued. And this is good news, not just for him but also for his rivals.

Hagerty didn’t pull any punches in his comments about Cisco. “Cisco [uses] a lot of words, but [there] is not much clarity on what products they will focus on,” he said in an interview. While Tandberg’s offerings are more standards-based, Cisco’s flagship telepresence products are proprietary in nature, Hagerty said.

“In the collaboration space, we are a great brand,” he said. “Frankly, it is great to be us…We are the last standing independent company of scale.” He is betting his close relationships with Avaya, Microsoft and others such as IBM — all enemies of Cisco — are going to help his company. In addition, Polycom thinks working with service providers, including phone companies, is a good way to make video conferencing available as a service.

Despite his bravado, Hagerty needs to worry about both Cisco and Logitech. These are two companies with deep pockets and deeper sales forces. They are desperate to make a splash in this market and are going to aggressively compete with Polycom. As I am one of those folks who always expects the worst — it must be my age — I believe that when there are multiple parties competing for domination of the same market, someone is left bleeding. Polycom is betting that the company’s friends will prevent it from being laid out on the mat.

This article also appeared on BusinessWeek.com.

Much of Facebook’s success on the iPhone has come courtesy of Joe Hewitt, an ace programmer who joined the world’s largest social networking site when it acquired Parakey, a company he co-founded with Firefox kid Blake Ross. Hewitt has now decided to shift his focus away from the iPhone. In a tweet sent out earlier today he said, “Time for me to try something new. I’ve handed the Facebook iPhone app off to another engineer, and I’m onto a new project.”

Joe was named to GigaOM’s Top 15 Mobile Influencers list earlier this year for his contributions to the iPhone app ecosystem — in particular, for single-handedly turning Facebook into a major force on the iconic Apple device. I recently gave him a hard time over the delays in launching Facebook 3.0, which prompted Joe to stop by our office and take part in an impromptu video chat. Here are the excerpts from that conversation.

The Crunchies, after two successful years, are back to celebrate the entrepreneurs and startups that make technology such an exciting industry. As always, we will be co-hosting the awards — for which nominations are now being accepted — with VentureBeat and TechCrunch. (Check out the photos from last year.)

Details of the event can be found here. The awards ceremony will be held Friday, Jan. 8 at 7:30 pm at the Herbst Theater in San Francisco and will be followed by an after-party across the street in City Hall’s Grand Rotunda. The nominations for the third annual awards ceremony honoring the best technology achievements of 2009 will remain open through midnight PST on Friday, Dec. 4th. The Crunchies Committee will select five finalists for each of the 18 award categories; final votes will be cast between Dec. 12th and midnight PST on Jan. 6th.