The company is also plans to announce Friday that it’s hit a new milestone of 50 million photos shared every day, which is a staggering number when you consider that Instagram’s most recent figure is 5 million uploads per day.

A company exlained in a press release how video “Snaps,” as they’re called, will work:

“How this works: Instead of toggling back and forth between a photo and a video setting, we’ve combined them into one button.  If you want to take a photo, just tap the button.  If you want to capture video, hold the button down.  When you’re done recording, lift your finger. Video snaps are up to ten seconds long, and like photo snaps, can only be viewed once in the application.”

Spiegel said adding video makes perfect sense for the app that lets users be themselves without much fear of recordings or images showing up around the web:

“I don’t know if you’ve ever watched a video of yourself, but it’s so awkward,” he said. “Video for Snapchat is really going to double underline what we’re all about. You get to share these really raw, really engaging moments. It’s such a crazy, powerful medium. Because it’s totally okay to be yourself and hear how awkward you are.”

GigaOM’s Om Malik reported Wednesday that Snapchat is reportedly ”raising around $8 million at a pretty generous pre-money valuation. The rumored (but not confirmed valuation is close to $50 million),” from Matt Cohler, who backed Instagram for Benchmark Capital. Snapchat was founded by Evan Spiegel and Bobby Murphy, two recent graduates of Stanford, in 2011.

Not surprisingly, Snapchat has been incredibly popular so far with teenagers who can take silly self-pics and send to a friend without much worry of those photos being posted to Facebook (if the receiver tries to take a screenshot of the photo, it notifies the sender), but also not suprisingly Snapchat has become known as “the sexting app,” due to the built-in self-destruction capabilities. It’s hard to imagine that the new video function won’t be used for the same purpose.

In an interview earlier this month, Spiegel said he doesn’t think that Snapchat is really used for sexting because “80 percent of photos are sent during the day,” and he takes this to mean it would be hard to send naked pics during the day. However, he said he can’t promise what users will do with the app, which is why they don’t make guarantees:

“We don’t want to get into an arms race with really clever people. Which is why we’re not advocating ourselves as a secure platform. We’re not for like, CIA documents.”

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SnapChat is an application (both on iOS and Android) that allows the members of the community to snap a photo and share it for someone else and that they have access to that photo for a few seconds, before vanishing. You respond by sharing your own photo and the loop continues. The perception of privacy and lack of permanence is one of the reason why sexting (as the kids would say) is so popular on one of the reasons why this app is blowing up, though CEO Spiegel says otherwise. As of Oct. 28, the company said that a billion photos had been exchanged over its network.

Team Snapchat in Norway. Photo courtesy of SnapChat blog

The word is that SnapChat, which is seeing about 1,000 photos being swapped every second, is raising around $8 million at a pretty generous pre-money valuation. The rumored (but not confirmed valuation is close to $50 million).  Cohler declined to comment.

SnapChat’s audience is decidedly young and definitely different from Facebook and Twitter, two more broader social platforms. Why is this interesting? I would just look at Cohler’s track record of showing up first at social platforms. LinkedIn, Facebook, Instagram and now SnapChat — you see a pattern here. As far as Twitter is concerned — well, Cohler’s partner Peter Fenton has that one covered. That said, it is still unclear to me how SnapChat will evolve from a white-hot app to a red-hot business.

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“The Facebook Mafia isn’t waiting for an IPO to strike out on their own as company alumni have already raised $271 million of venture capital funding since 2006.  And the Facebook Mafia’s momentum appears to be accelerating with the group pulling in $130 million in just the first 5.5 months of 2012, a 137% increase over all of 2011, and the highest total in the last 6.5 years (graph below).  For those unfamiliar with the term, the Facebook Mafia refers to alumni of Facebook who’ve gone on to found new startup companies.

Interestingly, the group of Facebook Mafia financiers has been quite diverse as CB Insights data identified 67 different investors who’ve invested in at least one Facebook Mafia company.  Only the 6 venture capital firms who have invested in 2 or more Facebook alumni companies are given below.

Some of the more well-known companies include Asana, Quora, Path and Cove (which has since been acquired by Dropbox.) So far Greylock, which is an investor in Facebook has done three investments in companies started by Facebook Alumni. First Round has done two investments, much like Index Ventures, Redpoint Ventures and Ron Conway’s SV Angel.

Benchmark Capital, which snagged Matt Cohler as a partner has done two – Asana and Quora. Benchmark through Cohler is also an investor in Peixe Urbano, a company started by early Facebook employee, Julio Vasconcellos. He is also personally invested in Path, a company started by Dave Morin.

I am pretty sure, we will see many more investments and more diverse groups joining the ranks in the coming weeks. Hey, who doesn’t want some of the pixie dust of a hit IPO company!

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Quora co-founders Charlie Cheever & Adam D’Angelo @ Crunchies 2010

Quora, a Palo Alto-based knowledge (read: Q&A) community has raised a whopping $50 million in Series B funding from co-founder Adam D’Angelo along with Facebook early funder Peter Thiel, Northbridge Ventures and Matrix Ventures. D’Angelo, who was chief technology officer of Facebook, has put $20 million of his own money (big props for that) in Quora while others chipped in the rest.  D’Angelo co-founded the company with Charlie Cheever in 2009 and currently has about 30 employees.

The company’s valuation is said to be $400 million, which only adds to the hype around the company. About a year ago, I had heard the company was getting investment interest at valuations in excess of $300 million. The company has thus far raised $61 million in total. Surprisingly, in the most recent announcement, there was no mention of previous investor Matt Cohler of Benchmark Capital, another early Facebook employee. (Matt Cohler emailed and let me know that Benchmark did indeed participate in the round.)

And what is the company going to do with this much cash? Well, grow its team, build out its infrastructure and do stuff most normal companies do. On Quora, D’Angelo writes:

We intend to use some of this funding as a cushion in case of macroeconomic changes. More than half our series A funds from two years ago are actually still in our bank account today. We could have waited longer to raise this round, but we wanted to extend our runway. That lets us keep our focus on long-term growth and quality, and lets us avoid making short term tradeoffs like many other companies.

And then there is some laughable explanation that they will have huge Amazon Web Services bills so they need the money.

We project a large portion of this money to go to EC2 and other AWS bills. It might be replaced by whatever the most appropriate place for us to run our infrastructure is in the future but as of today it’s looking like EC2.

Appdata puts its usage through Facebook Connect at about 180,000 monthly-active users and about 20,000 daily active users. I am sure they get a lot of traffic from the Web, but it can’t be enough to justify the nosebleed valuation.

The question here is why does this service merit such a high valuation? I mean, its traffic at best can be described as middling. There is lot more fly-by traffic from search engines, but is that enough to justify their valuation? Its mobile applications is meh and more of an afterthought. The design of the service is forgettable. Some members of the team have left to work for other companies such as Pinterest and Facebook. The only thing that is actually good about the service is some of the content contributions and the discovery of content.

Now in comparison, Instagram was a startup that snagged $50 million on $500 million (rumored) valuation before being acquired by Facebook. It had great mobile expertise. It had more than 30 million members and it had a very engaged daily audience. It was content that appealed to many people and it was growing so quickly that Facebook had to buy it.

When you compare Quora’s lack of traction with another Q&A community, Stack Exchange, which liberally shares its usage data, you are left scratching your head, asking yourself, what am I missing? Of course, there is the timing. Facebook is going public soon and that essentially raises the value of anything related to Facebook, merited or not. The way I see it, it is a deal that is being done because it can be done. Or as The Wall Street Journal says, it is Facebook mafia at work.

Updated on May 16, at 8.22 am with  a statement from Matt Cohler, who intimated that Benchmark Capital did indeed participate in this round of funding.

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With this sale, Kevin Systrom and Mike Krieger, cofounders of Instagram are the newest mega-millionaires in Silicon Valley. The duo could see their net worth jump even higher depending on the Facebook’s public offering. The deal is also a big win for Benchmark Capital and Matt Cohler who lead the investment in the company. Cohler, previously worked for Facebook. The company has raised money from well-known entrepreneurs including Digg founder Kevin Rose, former Facebook CTO Adam D’Angelo and Twitter’s Jack Dorsey.

Facebook's Menlo Park HQ

From some, the deal is both worrisome in the sense that Facebook now owns yet another social network, but may also offer hints as to how the company plans to address worries about its mobile business ahead of its planned initial public offering. (My analysis is here.)

Here is the Facebook blog post.

The total consideration for San Francisco-based Instagram is approximately $1 billion in a combination of cash and shares of Facebook. The transaction, which is subject to customary closing conditions, is expected to close later this quarter.

Mark Zuckerberg, founder and CEO of Facebook, posted about the transaction on his Timeline:

I’m excited to share the news that we’ve agreed to acquire Instagram and that their talented team will be joining Facebook.

For years, we’ve focused on building the best experience for sharing photos with your friends and family. Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.

We believe these are different experiences that complement each other. But in order to do this well, we need to be mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook.

That’s why we’re committed to building and growing Instagram independently. Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people.

We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook.

These and many other features are important parts of the Instagram experience and we understand that. We will try to learn from Instagram’s experience to build similar features into our other products. At the same time, we will try to help Instagram continue to grow by using Facebook’s strong engineering team and infrastructure.

This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.

Here is Instagram CEO and co-founder Kevin Systrom on the deal

Every day that passes, we see more experiences being shared through Instagram in ways that we never thought possible. It’s because of our dedicated and talented team that we’ve gotten this far, and with the support and cross-pollination of ideas and talent at a place like Facebook, we hope to create an even more exciting future for Instagram and Facebook alike.

 It’s important to be clear that Instagram is not going away. We’ll be working with Facebook to evolve Instagram and build the network. We’ll continue to add new features to the product and find new ways to create a better mobile photos experience.

And here is Systrom and I chatting on stage at Mobilize 2011:

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“When I first met [board member and partner at Benchmark] Matt Cohler, he asked what I really wanted to do,” he says.” I explained that my goal is to win a Nobel Prize.”

And he’s not kidding. The Harvard-trained virologist and computer scientist put a fast track medical career on hold in order to concentrate on building a website that he hopes can change the face of science. The reason is simple.

“I was on my way to becoming a professor, I’d published a lot,” he tells me, speaking from the company’s headquarters in Berlin. “But I noticed that I wanted more. Sure, I could be changing one discipline, but I wanted to change more than that… and I think if you can make it easier to share research, then it can change the world.”

In the simplest terms, ResearchGate is referred to as “Facebook for scientists” — a social network where professional researchers can share their work, communicate with each other and ask questions. But because it focuses on sharing knowledge, rather than activity, it’s probably got more in common with the likes of Quora or Stack Overflow.

And it’s proven very popular, with 1.4 million users from around the planet, sharing ideas and talking to each other about their work in fields from biology to physics to social science. By asking questions of each other, scientists are able to identify the academics who can help them, and perhaps avoid constantly reinventing the wheel.

“People tend not to share information on experiments that didn’t work,” says Madisch. “It means we end up making mistakes that other people have made already.”

The ability to learn from each other is what has driven ResearchGate’s popularity — and that popularity is something that has convinced investors including Founders Fund, which has just formally announced its participation in a series B round. Although the amount of money is not being disclosed, it comes on top of previous funding from the likes of Benchmark and Accel.

They all see value in a service that can capture the collaborative trend in a huge industry that — by and large — remains stuck in silos.

Online collaboration in science may still be in its infancy, but it is a powerful, growing trend — driven by the same technologies that underpin social networking and business collaboration. In a story last year, I spoke to several people who were at the cutting edge of ‘open science’, a loose movement trying to break down some of the barriers and take advantage of the online tools now available.

The internet, now an indelible part of our lives, allows like-minded individuals to seek one another out and share vast amounts of raw data. Researchers can lay claim to an idea not by publishing first in a journal (a process that can take many months) but by sharing their work online in an instant.

And while the rapidly decreasing cost of previously expensive technical procedures has opened up new directions for research, there is also increasing pressure for researchers to cut costs and deliver results. The economic crisis left many budgets in tatters and governments around the world are cutting back on investment in science as they try to balance the books. Open science can, sometimes, make the process faster and cheaper, showing what one advocate, Cameron Neylon, calls “an obligation and responsibility to the public purse”.

And given the trillions of dollars pumped into scientific research each year, it is perhaps no surprise that investors think ResearchGate is on the threshold of a major opportunity. But still, there is a serious question about how the site makes the sort of money that venture funds require — a point made recently in a piece in The Economist which dubbed Madisch “Professor Facebook.”

At the moment, most of those users are in their 20s. Their favourite activity is to ask each other questions about practical research problems, from DNA-sequencing techniques to statistical tricks. They are also busy reading each other’s papers: more than 10m have been uploaded.

Scientists whose reputations are established may be more hesitant, though, and not just because they are set in their ways. Science is not only about collaboration but also about competition. This limits what people are willing to share.

So far the company has been paid to build out some private versions that can operate behind the firewall inside institutions, and it is also looking into the possibility of job listings, reputation management and contextual advertising as revenue streams.

Board member Simon Levene, who is a venture partner at Index but put independent angel money into the company in its previous funding round, says that he sees a great opportunity to shake things up.

“The reason I fell in love with ResearchGate is that, in my opinion, the market for academic research in science is broken and ripe for disruption,” he says. “The dream of the web for Tim Berners-Lee was to allow researchers to collaborate, but the irony is that it hasn’t worked out that way.”

Madisch accepts that not everybody is convinced — many scientists simply refuse to share their knowledge, since they need to boost their own careers in order to receive funding. But like any good researcher, the 31-year-old relies on data to back up his response. Yes, the user base is young, but it’s skewing older as time goes on.

And then he pulls out a piece of anecdotal evidence to show precisely what he means.

“When I started ResearchGate, I was in Germany and my professor — 62 years old and a distinguished academic who has published more than a thousand papers — wouldn’t let me divide my time between research and the company,” he says. “He didn’t believe that scientists would do this, that they would share their ideas and answer questions about their work.”

“Six weeks ago I noticed that he’d signed up for ResearchGate.”

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Sarah Lacy, an author and veteran journalist (most recently with TechCrunch) is launching PandoDaily, a daily technology news blog focused on startups and the startup ecosystem. The name for the site comes from a colony of trees in Utah called, Pando Trees. Though spread across 43 hectares and weighing 6000 tons, the colony’s interconnected root system is the inspiration for this new site and Lacy is focusing on the startup ecosystem.

Lacy has roped in former colleagues – Michael Arrington, M.G. Seigler and Paul Carr for the new site as guest columnists. Farhad Manjoo, a columnist for Slate and Fast Company joins the group of writers who will write what Lacy calls “exclusives, edgy opinion posts, stellar product analysis, insightful people and culture stories and *real* breaking news.” She has also hired a couple of other bloggers for the new company and is in the process of hiring folks to help her with sales and organizing events.

The company is being funded by a $2.5 million investment from some of the most well known investors in Silicon Valley and some of the top seed funds. Investors in PandoDaily are – Marc Andreessen, Peter Thiel, Tony Hseih (Zappos), Zach Nelson (NetSuite), Andrew Anker, Chris Dixon (FounderCollective), Saul Klein (IndexVentures), Josh Kopelman (First Round Capital) , Jeff Jordan (ex-CEO, Open Table) and Matt Cohler (ex-Facebook & Benchmark Capital) – who are all investing as individuals. The seed funds investing in the company include the CrunchFund, Greylock Discovery Fund, Accel’s Seed Fund, Menlo Ventures Talent Fund, Lerer Ventures, SV Angels and Ooga Labs.

Lacy left TechCrunch and believed that selling it to AOL was a mistake. She says she doesn’t plan to sell this company and if she does, then she will have failed. In a blog post on her new site, she writes:

I’ve never been one of those people who just wanted to start a company for the sake of starting a company. I was more than happy to spend life writing about them. I’d thought about starting a blog in the past, but ultimately decided it would be more fun to work with Mike and Heather to make TechCrunch even bigger. We didn’t agree on everything, but I always felt TechCrunch got the important things right — things like giving a crazy founderthe benefit of the doubt that his plan might work and things like flatly calling out bad actors in the ecosystem.

So this fall, when AOL violated the promises not to meddle in TechCrunch’s affairs kicking off an exodus of talent and a subsequent decline of page views, I got a lot of very kind job offers. But I knew I had two real options: Stay and help put the pieces back together or and leave and start something that I could decide not to sell to AOL.

To do the former, I would have to get over everything that had happened. And I knew I couldn’t do that. And the idea of starting something new — starting with a clean sheet of paper, surrounded by great advisors and knowing with everything we’d learned at TechCrunch– was so intoxicating that in the end, that was the biggest reason I quit.

And while we might compete with PandoDaily for stories, as a fellow entrepreneur I am excited for Sarah. I am glad she made this move into entrepreneurship. I have watched  Sarah go from being a reporter for a local business newspaper in Santa Clara to a writer for Business Week and then an author of multiple books before ultimately finding her true voice at TechCrunch.

Good luck with the journey, Sarah!

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For a while there the consensus seemed to be it was a better idea to make every online product social or build on existing platforms rather than create a separate vertical social network. However, niche networks are back, from Apple’s Ping to little startups like The Fridge.

The promise of ResearchGATE is that it’s a social network that could help real work get done well. Madisch estimates that nearly 80 percent of research is unpublished, so it’s not shared with the broader scientific community. If the scientific process could be more open and shared, researchers could collaborate with each other, reduce redundancy, and improve their work. The site today contains 500,000 scientist profiles, along with 2,600 collaborative groups and an aggregated index of 35 million scientific articles. It’s already making money through a jobs board. Madisch said he doesn’t aim to disrupt the traditional research journal model, but rather to help scientists out in the formulation phase before they publish a study. He added that down the line he’d love for ResearchGATE to publish its own “journal of negative results” (which could actually be pretty awesome).

Participants in the Series A round, led by Benchmark, were Accel Partners and angels including Simon Levene, Michael Birch, Joachim Schoss and Martin Sinner. In a phone interview, Cohler said that he felt ResearchGATE was well-positioned because it was developed out of the needs of its founders. He called scientists a “large and very important market and not well served online” and said he thought improving collaboration tools has the potential to change how research is done.

Another great science-related social web tool is Scitable, but that’s more aimed at connecting teachers and students.

Photo courtesy Flickr user NIOSH.