Earthcomber sells apps that allow users to discover nearby bars and events based on their physical location. Such apps rely on the GPS technology in smart phones and are offered by a wide variety of companies.

On Wednesday, Earthcomber filed patent infringement suits in Chicago federal court naming popular real estate sites such as Zillow, RealPage and LoopNet.

The patent in question was issued in 2006 and appears to describe a method of using GPS information to match a user with nearby places of interest:

A location-based and preference-based system and method for matching the profiles of the attributes and/or characteristics of persons, places and/or things with the expressed preferences of mobile users such as travelers, to alert and direct such users to any places having attributes matching the user’s express preferences.

This is not the first time, Earthcomber has tried to enforce this patent. In 2008, it also used US Patent 7071842 to sue mobile social network Loopt and the corporate parent of technology blog TechCrunch. The case was dismissed in 2009.

This time around, Earthcomber has a new law firm and appears to be widening its net of potential defendants. The company’s aspirations may be driven in part by a 2010 licensing deal it reached with restaurant review site, Zagat. It’s unclear if the deal resulted in cash payments or if Earthcomber intends to use the deal as leverage in future litigation. The company did not immediately return a request for comment.

[Update: Earthcomber President Jim Brady said by telephone that Tech Crunch founder Michael Arrington's report (see link above) misrepresents the earlier litigation, and that the parties reached a "business deal" that resulted in the dismissal of the 2008 lawsuit. Brady said he could not elaborate on whether the deal with Tech Crunch, Zagat or Loopt resulted in cash payments.

Brady also said he is not a patent troll and that his company had an early vision of combining Palm (NYSE: HPQ) and Bluetooth technology into one device. He says the patent was the only way to protect himself. "Big money bowls over small app makers like us."]

In the past decade, the technology industry has been beset by an explosion of patent lawsuits, many of them based on “methods” used in the ordinary course of business.

Last year, the federal government passed new legislation that makes it easier for parties to challenge dubious patents. Many of the rules, though, apply only to newly issued patents.

The other new defendants are: Dominion Enterprises, National Association of Realtors, Network Communications, Redfin, Primedia (NYSE: PRM) and Ziprealty.

Earthcomber patent suit
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Sean Aggarwal, Trulia's new CFO

Trulia has hired Sean Aggarwal to serve as its first CFO and Scott Darling to serve as its first full-time general counsel. Previously, Aggarwal was VP of finance at PayPal, the payment processing arm of eBay, the publicly traded e-commerce giant. His resume also includes senior finance roles at Amazon and PepsiCo. Darling was previously general counsel at Imperva, the publicly traded data security company.

Hiring a CFO with public company experience is often one of the things a company does in the run-up to its own IPO, and Trulia has made no secret of its hope to eventually go public. Recent reports have pegged Trulia’s IPO as on track for 2012, and these new executive appointments would be in line with that timeline.

In an interview Thursday, Trulia CEO Pete Flint talked up the company’s recent growth but demurred from talking directly about IPO plans. “The growth of the company is really awesome; we’re growing super fast,” Flint said. “We certainly see the market opportunity as enormous. Whether that translates into staying private or going public, we’ll continue on our path.”

It bears mentioning that Trulia’s competitor Zillow went public this past summer, but at the moment, its stock market performance isn’t the brightest: On Thursday, its share price hit a new all-time low of $21.56, dipping close to its IPO price of $20 per share. But there are some notable differences between the two companies: Trulia hit profitable operations a year ago, while Zillow only hit profitability after its July IPO; and in the past, Flint has noted that Trulia prioritizes its engineering operations more strongly than its competitors.

When asked about the competitive landscape this week, however, Flint kept his comments general: “It’s an enormous industry and a very meaningful industry, and there will be multiple players in the marketplace. That’s a good thing for us and a good thing for the ecosystem.” And it seems that ecosystem will certainly be a space to watch in the months ahead.

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The new feature, which is slated for launch in June, is a valuable exercise in large scale data processing. The crime maps are based on data collected from more than 1,000 different sources, aggregated into more than 5 million data points on the maps. Block-by-block crime density from the past 12 months is presented in heatmap form, with the top 5 percent of blocks with the most crime colored dark red, the next 5 to 10 percent in light red, and so on. The maps’ update rate varies from hourly to monthly, based on when each locations’ data is available from the various third-party agencies that work directly with law enforcement.

The crime map feature is made possible largely by Trulia’s December 2010 acquisition of geo-data aggregation startup Movity. Movity was part of Y-Combinator’s Winter 2010 class with the stated goal of giving home buyers information on what the location is “really like” by mapping data on noise and crime. Terms of the Movity buy were undisclosed.

The crime maps launch is evidence of Trulia’s rigorous engineering culture, CEO Pete Flint told reporters during a recent meeting at the company’s San Francisco headquarters. Trulia’s technologies are all developed by the company’s in-house U.S.-based engineering team, he said, while some of the Trulia’s competitors are said to occasionally outsource programming projects to third-party contractors. “Real estate listings are a commodity,” said Flint. “It’s the user experience and the information that accompanies [the listings] that makes it consumable.” That’s why Trulia, which is profitable, has made a concerted effort to reinvest a good portion of its revenues in keeping its technology as up-to-date as possible, he said.

Trulia’s feature may not seem groundbreaking to citizens of hyper-connected cities such as San Francisco, which is already served by Everyblock, a website which posts crime data and other local news overlaid on maps. But Everyblock is currently only available in 16 metro areas; Trulia’s crime maps will launch in 50 metro areas. In many places, Trulia’s crime maps could quickly become a unique and hugely valuable offering.

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If you ask me, Zillow is using its IPO dream declaration as a stalking horse for what is a more likely outcome: an acquisition, preferably from someone like Google. Zillow raised $30 million in 2007 at a whopping valuation of $400 million, and bringing the total amount raised in venture funds to $87 million.

Zillow, along with fellow online real estate listings provider Trulia, are prime acquisition candidates. Google, which was rumored to have made an attempt to buy local search and reviews provider Yelp, seems to be in the market for such vertical search services, especially in light of reports that it was kicking the tires at Trulia as well. Expect one of them to end up in the arms of Google.

Zillow, Trulia and many other post-2007 startups are in an awkward place: They’re not small enough for a quick merger but aren’t beefy enough to justify their massive valuations. The good news is that Zillow has a full grip on reality, as Rascoff indicated in his chat with Bloomberg.

Zillow’s newfound optimism stems from a strong showing in 2009. Despite the woes of the real estate industry, the company saw its traffic grow 37 percent (in terms of page views), launched a rentals listings service, and partnered with many U.S. newspapers to provide them with its real estate search. Zillow, with some 5.2 million monthly visitors, is the second-largest real estate listings service behind Move.com, which has close to 6.4 million monthly visitors, according to comScore.

That said, whether it harbors dreams of an IPO or a sale, Zillow needs to not just repeat but exceed its 2009 performance, when sales rose 65 percent even while online real estate advertising declined $100 million to $7.5 billion. The company is looking to sell more lead-generation advertising, most of it targeting the mortgage lending industry. And Zillow should benefit from any rebound in the housing market, but that might not be enough.

Image courtesy of Flickr user, The Truth About

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If you’re a startup that’s building its business using Google’s services, be warned, because the Mountain View, Calif.-based search giant is a fair-weather friend. Take real estate listings companies like Trulia and RedFin, which both use Google Maps as part of their offerings. They got a rude awakening today, thanks to moves being made by Google’s Sydney office. Google’s Australian arm is looking to get into the classified real estate business via a new tool that uses Google Maps and connects buyers and renters to available properties.

The service is launching with listings provided by the Real Estate Institute of Western Australia and homehound.com.au, the free property listing service owned by Michael Hannan’s Independent Print Media Group.

Google is planning to roll out has had a similar service in the U.S. as well. And when that happens, the company will be competing with Craigslist, RedFin and countless other real estate listings providers, including those provided by newspapers for over a year, the UI of which is being updated today. Search Engine Land’s Matt McGee correctly points out that Google’s service is pretty rudimentary compared to the in-depth information provided by pure-play real estate services.

What remains to be seen is how the real estate industry will react. One of Australia’s leading real estate advertising publishers has decided against giving its listings to Google. Closer to home, the National Association of Realtors recently made its feelings clear when it called Google a “scraper” site and supported a local board’s decision to stop allowing some MLS listings to be crawled by search engines.

Whatever the outcome, it makes perfect sense that Google is taking this route; numerous real estate listings services already use Google’s mapping service and the company needs to find new ways to make money in order to keep its revenue stream growing. If it doesn’t, the company faces the prospect of its stock going south. And Google can’t afford to have its stock sink because it needs that currency to keep its offices stocked with smart engineers.

And if that means competing with its friends, its attitude is — just ask Mozilla — so be it. Big companies often encroach on the territory of their partners and today’s news shows Google is no different.

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We’ve already showcased two startups — Skygrid and Placebase — that have impressed us with their ability to offer pointers that can be translated into actions on the real-world stock and real estate markets. Trulia and Zillow fall in that category as well, though I think they’re both eons away from where they should be. And today we’re adding New York-based Sense Networks to the interesting and growing list of intelligent mashup companies.

By combining historical and real-time location data acquired through either GPS and Wi-Fi, along with other real-world information, the company has come up with a “social navigation and nightlife discovery application” called Citysense. The mobile app, which runs on Blackberry and the iPhone and is currently limited to San Francisco, shows nightlife hot spots on a map in real time. You can then drill down to find information on, say, local bars and restaurants. But Citysense itself is actually a small part of a bigger story.

It runs on Sense Networks’ platform, called Macrosense, which has the ability to take geo-location data sent out by phones and vehicles, such as taxis, and map it to historical data, such as old traffic patterns, local restaurants and other geographical information. I would describe Macrosense as a machine-to-machine platform that can mash up many inputs to create real-time “heat maps.”

This is where it gets interesting: The company doesn’t want to take any advertising or charge people for the application. Instead, it wants to take the trend information it’s gathering and sell it to investors who want to trade based on that information — which is understandable, given that the company has been seed-funded by money from a hedge fund. And I like this idea, even though I have some concerns about privacy. The company says their system is based on “anonymous, aggregate location data.”

“Citysense demonstrates the power of combining anonymous, aggregate location data for social navigation,” said Sandy Pentland, chief privacy officer, co-founder of Sense Networks, and director of human dynamics research at MIT. “The idea is similar to automobile GPS systems sharing and pooling current road speed conditions so that everyone can avoid congestion.”

I’m still not entirely convinced. But if we put privacy concerns aside for a minute, the possibilities of this are mind-boggling. Imagine mapping foot traffic to, say, Gap or Apple stores. While it would never tell you if people were shopping or not, it would be a great indication of how hot (or not) the store was, enabling you to trade on the information. Take it one step further and mash it with web-based data or Twitter feeds: You could build a highly complex and near real-time view into what’s happening on the innerwebs.

Which reminds me: It’s time to call my buddies Paul Kedrosky and Tim O’Reilly so I can pick their brains about these trading mashups.

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As luck would have it, Found|READ has been talking about this very thing – how to accelerate your startup’s success — with serial entrepreneur Ashfaq (“Ash”) Munshi, currently the founder of TeraBitz, which he launched in 2006 with his son, Kamran Munshi. (Talk about speed: Kamran is 18!)

Cassidy’s presentation focuses on how to accelerate startup processes like fundraising, product rollout — even a company sale. Munshi has advice on how to accelerate the one step in launching your startup that is primary to these others: How to identify a market that is “ripe for speed” in the first place.

Management gurus all say that inefficient markets are a good place to start. Inefficiencies mean opportunities for innovation. Munshi believes entrepreneurs hunting for “speedy” success can do even better by identifying inefficient markets that may also be affected by an external catalyst in the very near future — regulatory reform, for example, or an inflation rate cut by the Fed.

This is how Munshi went about identifying the market for TeraBitz. In his case the “catalyst” was a federal lawsuit. We’ll summarize Munshi’s “Four Steps to Speed” first, then illustrate them through the case of TeraBtiz.

Ash Munshi’s Four Steps to identifying a market primed for speed:

1. Identify an inefficient market.

2. Identify a market in which VC money is already being spent. “This means others believe there is a transformation about to a happen,” he says. “What transformation are they betting on?”

3. Identify the part of that market that has not been “staked out.” And be a friend to the constituency that isn’t being served.

4. Look for an external catalyst that could act as a change accelerant. “The question is, if something breaks (like regulation, a rate hike), can you capitalize on [the change] in a way no one else can?”

TeraBitz serves real estate brokers by aggregating the property listings they need from various geographic markets into a single data feed to their firms’ web sites. Real estate is a notoriously inefficient market. To maximize the homes they can show to (or for) clients, real estate brokers have to use the Multiple Listing Service system, which indexes available properties in a given location. But MLS listings are controlled by regional estate associations that impose lots of rules to access them. To list a home for a client in Houston, for example, a California-based broker must open an office in Texas.

Fragmentation means inefficiencies (Step 1: check!), which is why startups have piled into the market with web-based models aimed at streamlining the business, among them Zillow.com, Trulia.com and RealEstateABC. Each one puts listing data directly in the hands of buyers and sellers, cutting out brokers altogether. (Step 2: check!)

Between being disenfranchised by the web and the mortgage crises, brokers have become the orphans of the industry — sitting in their bricks-and-mortar offices, they have fewer properties to sell, and fewer people to sell them to.

So with so many consumer-focused startups already established in the space, Munshi went for the ground that had not yet been “staked out.” Building a business to help the brokers made sense, he says, not just because they were the one constituency that wasn’t yet being served, but because he believed brokers would remain valuable.

“Consumers will never get comfortable exclusively buying and selling property virtually,” he says. “Their home is still the largest asset most people have. We think they’ll want an intermediary, because it is such an emotional decision.” (Step 3: check!)

And here’s the speedy part:

The same brokers’ associations that made access to property data difficult for out-of-state brokers completely excluded Internet brokers from their prized listings. Even as margins were getting crushed, the practice thwarted the one innovation that might aid brokers most — going online — because they feared losing access to the MLS data.

The Justice Department filed an antitrust claim against the National Association of Realtors (NAR) in 2005 — one year before Munshi founded TeraBitz. Munshi learned about the lawsuit through his own property dealings, and it influenced TeraBitz’s business model. (He was later subpoenaed to testify.) “I knew [the case] would have an impact, but it happened even sooner than I thought it would.”

The parties settled the case on May 27. The NAR may no longer withhold data from online brokers.

In an industry slow to change, the settlement will speed up business like a performance-enhancing steroid. “The last disincentive for brokers to adopt new technology is gone,” Munshi says. (Step 4: check!)

Then he chuckles. The settlement offers little benefit to competitors like Zillow and Trulia because they don’t serve its prime beneficiaries, the brokers. In other words, TeraBitz is not only in a position to “capitalize” on the catalyst, but “in a way no one else can.”

(Step 4: check! check!)

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