Silicon Valley Wire

MRV Communications to Acquire Santa Clara-Based Fiberxon for $131 Million

Santa Clara, Calif. -- In a deal creating one of the largest manufacturers of optical transceivers for telecommunications networks, MRV Communications, a Chatsworth-based provider of network equipment and services, said on Friday that it has struck a deal to acquire Santa Clara-based Fiberxon, a supplier of transceivers, for $131 million in cash and stock. Following the completion of the deal, MRV said that it will combine Fiberxon with Luminent subsidiary, which also makes transceivers. MRV also announced plans on Friday to take Luminent public through an IPO. Fiberxon has more than 700 employees, including over 170 engineers, and is expected to post 2006 revenue of $45-$48 million. The combined company, with headquarters in Chatsworth, will have over 1,300 employees based in facilities in the U.S., mainland China and Taiwan.
http://www.mrv.com/newsroom/pr/pr-view.php/225

Menlo Park-Based Mayfield Launches $200 Million Fund Targeting China

Menlo Park, Calif. -- Mayfield Fund, a Menlo Park-based venture capital firm focused on technology, said on Friday that it has raised a new $200 million fund dedicated to investing in China. The fund, known as GSR Ventures II, was formed in partnership with GSR Ventures, which has made 11 investments in China with Mayfield over the past two years. Kevin Fong, a long-time managing director at Mayfield, will serve as a managing director of the new fund, with James Beck serving as CFO. The fund will target investments in the semiconductor, wireless and Internet media sectors, with representative offices in Menlo Park and Beijing.
http://www.mayfield.com/index.php/news.html?sid=
http://www.mayfield.com/newsarticles/2007-01-26-chinafundrelease.pdf (PDF)

France, Germany Join Scandinavian Groups in Effort Against iTunes

Cupertino, Calif. -- French and German consumer groups have joined an effort by the Scandinavian countries to pressure Cupertino-based Apple into allowing customers to purchase, download and play tracks from iTunes on devices other than iPods. Consumer groups in Denmark, Norway, and Sweden launched the effort in June, charging that Apple was violating contract and copyright laws in those countries. Now, French consumer lobby UFC-Que Choisir and its German counterpart, Verbraucher, have joined the movement, according to the Associated Press, with other European countries considering a similar move. "Apple is aware of the concerns we've heard from several agencies in Europe and we're looking forward to resolving these issues as quickly as possible," said an Apple spokesman.
http://www.technologyreview.com/read_article.aspx?id=18098&ch=biztech
http://forbrukerportalen.no/Artikler/2006/1149587055.44
http://news.yahoo.com/s/zd/20070124/tc_zd/199429

Fox Subpoenas Google's YouTube for Identity of TV Show Uploader

Mountain View, Calif. -- Fox has served Mountain View-based Google's YouTube video-sharing service a subpoena demanding the identity of a user who uploaded episodes of the network's "24" and "The Simpsons." First reported by Google Watch, the subpoena was granted by a U.S. District Court judge for the Northern District of California. The YouTube user in question, "ECOtotal," uploaded episodes of "24" before their actual broadcast premieres. The person's account has been suspended by YouTube. Fox also served a similar subpoena to LiveDigital, another video-sharing site.
http://googlewatch.eweek.com/index.html
http://www.youtube.com/profile?user=ECOtotal   

Alliance Semiconductor Completes Sale of Venture Portfolio

Santa Clara, Calif. -- Alliance Semiconductor, a former Santa Clara-based maker of chip and memory products, said on Friday that it has completed the sale of a portfolio of venture securities held by five Alliance investment partnerships to Saratoga-based QTV Capital for $123.6 million in cash. Alliance, which sold off its operating businesses last year, first announced plans for the deal in December.
http://biz.yahoo.com/bw/070126/20070126005138.html?.v=1

Mountain View-Based Google Says YouTube to Remain Separate

Mountain View, Calif. -- Two months after closing its blockbuster acquisition of San Mateo-based YouTube, Mountain View-based Google said on Thursday that it plans to continue operating the popular video sharing site as a separate business, while also integrating it somewhat with its Google Video site. Beginning Thursday, users of Google Video will find search results that include YouTube videos, and will be taken directly to the videos by pressing a thumbnail. Over time, Google Video said that it expects to evolve into a service that lets users search for all videos, irrespective of where they are hosted. "YouTube… will continue to operate separately," Google wrote in its official blog. "Google will support YouTube by providing access to search and monetization platforms and, when/where YouTube launches internationally, to international resources."
http://googleblog.blogspot.com/2007/01/look-ahead-at-google-video-and-youtube.html 

Petaluma-Based Oculus Raises $24 Million in Initial Public Offering

Petaluma, Calif. -- Oculus Innovative Sciences, a Petaluma-based medical technology firm, on Thursday raised about $24 million in its initial public offering (IPO). The company sold just over 3 million shares for $8 each, the low end of its expected range. It had initially expected to price between $12-$14, but later lowered that range to $8-$10. Shares of the company, trading on the Nasdaq Global Market under the symbol "OCLS," fell 2.5% on their first day of trading. Oculus makes a family of products designed to help prevent and treat wound infections.
http://www.oculusis.com/us/news/pressreleases/pricing012407.html

Redwood City-Based Gynesonics Raises $16.5 Million in Second Round

Redwood City, Calif. -- Gynesonics, a Redwood City-based developer of a minimally invasive device to treat uterine fibroid tumors, said that it has raised $16.5 million in its second round of funding, led by Advanced Technology Ventures. InterWest Partners and Abingworth Management also participated. "These funds will allow us to complete our product development and begin our U.S. FDA clinical trial later this year," said Jessica Grossman, the president and founder of Gynesonics. The company's disposable, hand-held device combines ultrasound imaging with radiofrequency energy, allowing gynecologists to identify fibroids and destroy tumors.
http://www.gynesonics.com
http://biz.yahoo.com/bw/070124/20070124005256.html?.v=1   

ND Systems Changes Name, Moves from Morgan Hill to San Jose

San Jose, Calif. -- ND Systems (NDS), a maker of surgical and medical visualization equipment, said on Thursday that it has changed its name to NDS Surgical Imaging. The company also said that it has moved from Morgan Hill to a 73,000-square-foot facility in San Jose, tripling its space. The company's product portfolio helps address the healthcare industry's growing imaging needs in the surgical, interventional and radiology markets.
http://www.ndssi.com/about/press-releases/2007/01/nds-name-change.html

Report: Movie File-Sharing on the Rise Among Americans

Toronto -- Twenty million Americans downloaded a movie off the Internet in the past month, according to new figures from market research firm Solutions Research Group. The firm said that  80% of those downloading say that they only use file-sharing sites -- a figure that doubled between 2005 and 2006. Overall, 32 million Americans, or 18% of the U.S. online population, have ever downloaded a movie, "The current crop of 'download to own' movie services and the new ones coming into the market will need to offer greater flexibility of use, selection and low prices to convert the current users to their services," said Kaan Yigit of Solutions Research Group. "Otherwise file-sharing will continue to thrive."
http://biz.yahoo.com/prnews/070124/nyw060.html?.v=82
http://www.srgnet.com

Sunnyvale-Based Yahoo to Debut New Ad System in February

Sunnyvale, Calif. -- Shares of Sunnyvale-based Yahoo rose more than 7% on Wednesday after the Internet giant announced plans to launch new ad search technology that the company hopes will help it close its revenue gap with rival Google. The new system, code named Panama, will debut on Feb. 5. It will rank all of Yahoo's search marketing ads in the U.S. by quality, in addition to keyword bid price. To date, search ads on Yahoo and its distribution partner sites have been ranked solely by bid price -- the higher the bid, the higher an ad appears within the search results. When the new ranking model goes into effect, both bid and the ad's quality -- determined by its historical performance -- will determine where an ad appears in the search results. "By encouraging advertisers to focus on the quality of their ads, we can deliver a better search experience for all of our customers," said Tim Cadogan, Yahoo's vice president of search marketing. Yahoo expects to generate more revenue per Internet search as a result of the system.
http://biz.yahoo.com/bw/070123/20070123006260.html?.v=1

S.F.-Based LookSmart Sells Net Nanny Software Line to ContentWatch

San Francisco -- LookSmart, the San Francisco-based online media and technology company, said that it has sold its Net Nanny parental control and filtering software to ContentWatch, a Utah-based developer of parental control tools for the Internet. Financial terms of the deal were not disclosed. ContentWatch said that it plans to increase Net Nanny's functionality and consumer market presence. John Simonelli, the CFO of LookSmart said that the "parental control market is no longer relevant to LookSmart's long term strategy." Net Nanny was developed in 1994 to help parents keep their children from viewing inappropriate material on the web. 
http://www.contentwatch.com/company/press/netnanny

San Jose-Based GNi Acquires Online Game Services Inc.

San Jose, Calif. -- Global Netoptex Inc. (GNi), a San Jose-based provider of managed hosting services, said on Wednesday that it has acquired long-time partner Online Game Services Inc. (OGSi) in a deal valued in excess of $3 million. GNi said that the acquisition will strengthen its ability to provide game hosting services to the online games industry. Launched in 2004, San Jose-based OGSi provides dedicated hosting environments and network services to such clients as Ping0 and GoPets.
http://www.gni.com/
http://biz.yahoo.com/bw/070124/20070124005287.html?.v=1

U.S. Appeals Court Rejects Challenge to Copyright Term Lengths

San Francisco -- The U.S. Court of Appeals for the Ninth Circuit has rejected an appeal from Internet activists, including Internet Archive founder Brewster Kahle, that would have reexamined the extensions to copyright term lengths enacted during the 1990s. The activists had argued that the copyright extensions violate First Amendment free speech rights by preventing the "orphan works" from entering the public domain sooner, where they may be freely distributed and used in new works. Before 1976, copyrights lasted 28 years, but the Sonny Bono Copyright Term Extension Act of 1992 and an amendment to that law in 1998 extended copyright terms to the life of the author plus 70 years. The extension was affirmed in 2003 by the Supreme Court. "They [the plaintiffs] make essentially the same argument, in different form, that the Supreme Court rejected," the Ninth Circuit wrote in its ruling. "It fails here as well."
http://www.archive.org/iathreads/post-view.php?id=96846
http://www.ca9.uscourts.gov/ca9/newopinions.nsf/1FABEA163F4C714A8825726B005A12F0/$file/0417434.pdf?openelement (PDF)

Per-Se Technologies Approve Acquisition by S.F.-Based McKesson Corp.

San Francisco -- Per-Se Technologies, a Georgia -based developer of IT products for healthcare providers, saidon Wednesday that its shareholders have approved the company's planned acquisition by McKesson Corp., a San Francisco-based healthcare services and information technology company. The all-cash deal is worth about $1.23 billion. It is now expected to close on Friday.
http://investor.per-se.com/phoenix.zhtml?c=66863&p=irol-newsArticle&ID=953844

Mountain View-Based Intuit Promotes Kris Halvorsen to CTO

Mountain View, Calif. -- Intuit, the Mountain View-based maker of business and financial management software such as Quicken and TurboTax, said on Wednesday that it has promoted Kris Halvorsen to the roles of senior vice president and CTO. Halvorsen, who has more than 25 years of experience in the information technology industry, has served as the company's acting-CTO since September. He previously spent several years leading research at Xerox PARC and HP Labs.
http://www.intuit.com/
http://biz.yahoo.com/bw/070124/20070124005309.html?.v=1

Santa Clara-Based Sun Microsystems Lands $700 Million Investment from KKR

Santa Clara, Calif. -- Sun Microsystems, the Santa Clara-based maker of server and storage products, said on Tuesday that it has landed a $700 million investment from KKR Private Equity Investors, the publicly traded fund of private equity firm Kohlberg Kravis Roberts & Co. The investment, which will help the company fund future growth, will consist of $350 million of convertible senior notes due in 2012 and $350 million of convertible senior notes due in 2014. The deal is expected to close on Friday. The news came on a day when Sun also announced that it returned to profitability last quarter, earning net income of $126 million, compared with a loss of $223 million a year ago.
http://www.sun.com/aboutsun/pr/2007-01/sunflash.20070123.2.xml

EMA Acquires Division of San Jose-Based Forte Design Systems

San Jose, Calif. -- EMA Design Automation, a New York-based provider of Electronic Design Automation (EDA) technology, said that it has acquired the Chronology Division of San Jose-based Forte Design Systems, which includes the TimingDesigner product line. TimingDesigner is an interactive timing analysis tool used for to model and analyze signal relationships between devices on a board or between embedded functions on an integrated circuit. Financial terms of the deal were not disclosed. "By owning the technology, we now have better control over its future direction and integration with our core product offerings," said Manny Marcano, the CEO of EMA Design Automation.
http://www.ema-eda.com/
http://biz.yahoo.com/bw/070123/20070123005692.html?.v=1

Santa Clara-Based Hyperion to Acquire Decisioneering

Santa Clara, Calif. -- Hyperion, a Santa Clara-based maker of software designed to help companies manage the performance of their business, said on Tuesday that it has signed a deal to acquire Denver-based Decisioneering, a developer of decision analysis software. Financial terms of the deal, which is expected to close in the next month, were not disclosed. Hyperion said that it will operate Decisioneering as a stand-alone business unit. Decisioneering's core software, called Crystal Ball, is a predictive analytics, simulation and modeling tool built for business users. It is currently in use by 4,600 customers.
http://www.hyperion.com/company/news/news_releases/press_release_3_2006_0000248.cfm

San Jose-Based Achronix Semiconductor Raises $25.4 Million in First Round

San Jose, Calif. -- Achronix Semiconductor, a San Jose-based developer of field programmable gate arrays, said on Tuesday that it has raised $25.4 million in its first round of funding, co-led by New York-based New Science Ventures and Massachusetts-based Battery Ventures. Entrepia Ventures and Easton Capital Investment Group also participated. The company had been self-funded during its first two years in existence. Achronix makes field programmable gate arrays, reconfigurable semiconductor devices used in such field as communications, networking and digital signal processing.
http://www.achronix.com/news.html?newsID=78&PHPSESSID=c957f5b9a0604e3091b46d90931a5511

Fremont-Based Actelis Networks Secures $22 Million in New Funding

Fremont, Calif. -- Actelis Networks, a Fremont-based maker of telecommunications products that allow service providers to extend the reach of their carrier Ethernet network through existing  copper infrastructure, said that it has raised $22 million in a new round of funding led by by Adams Street Partners. All of the company's previous investors also participated. Tuvia Barlev the CEO of Actelis, said that the financing will all the company to expand its corporate infrastructure to support continued market growth. Actelis' technology is designed to create Ethernet connections without interfering with legacy services already deployed in a network. Its products are currently deployed in more than 30 countries.
http://www.actelis.com/index.php?fuseaction=news.view_Article_1_2007&article=1222007_funding.shtml

Mountain View-Based MCN Raises $10 Million in Second Round of Funding

Mountain View, Calif. -- Mobile Content Networks (MCN), a Mountain View-based provider of mobile search services,said that it has closed its second round of funding, reportedly worth $10 million, according to Dow Jones' VentureWire. Meritage Funds led the round, which also included participation from Dentsu.com, Netage Capital Partners, UniqueLab, Suneight and Intellect Capital Ventures. The two-year-old company said that it will use the funds to further expand the development and marketing of MobileSearch.net, its search management platform for the wireless industry.
http://mcn-inc.com/20070122MCNSeriesBClose.html

Mountain View-Based Electric Cloud Lands $9 Million in Third Round

Mountain View, Calif. -- Electric Cloud, a Mountain View-based developer of software production development tools, said that it has raised $9 million in its third round of funding, led by Rembrandt Venture Partners. All of the company's previous investors -- Mayfield Fund, RRE Ventures and U.S. Venture Partners -- also participated in the round, which the company plans to use to expand .  its product development, sales and marketing activities. The company has raised a total of $22.1 million to date. Electric Cloud said that its products allow software developers to reduce build times, improve engineering productivity and go to market faster.
http://www.electric-cloud.com/news/2007-0117.php

Mountain View-Based Loadstar Sensors Lands $7 Million in Second Round

Mountain View, Calif. -- Loadstar Sensors, a Mountain View-based maker of capacitive sensors, said on Tuesday that it has landed $7 million in its second round of funding, led by AIG SunAmerica Ventures. Dali Hook Partners and Needham Capital Partners also participated in the round, which gave the company more than twice the amount that it originally had sought. Launched in 2004, Loadstar Sensors designs and manufactures capacitive sensors for automotive, aerospace, medical device and industrial.
http://www.loadstarsensors.com/pressroom.htm

San Francisco-Based Kiptronic Raises $4 Million in First Round

San Francisco -- Kiptronic, a San Francisco-based provider of ad-insertion technology for audio and video podcasts, said on Tuesday that it has raised $4 million in its first round of financing, led by Blueprint Ventures and Prism VentureWorks. Previous angel investors also participated. The company said that it will use the funds to seek additional advertising partners, as well as radio, TV and print outlets seeking to monetize their digital downloads. Kiptronic said that the over 3,000 podcasts for which it has has provided ad services were downloaded a total of 47 million times during the fourth quarter of 2006.
http://biz.yahoo.com/bw/070123/20070123005867.html?.v=1
http://www.kiptronic.com   

San Mateo-Based Consumer Product Reviews Site Wize Raises $4 Million

San Mateo, Calif. -- Wize, a San Mateo-based start-up that compiles user-generated and expert product reviews and ranks them using a scoring algorithm, said that it has raised $4 million in its first round of venture capital financing from the Mayfield Fund and Bessemer Venture Partners. The four-month-old company has collected more than 1 million user-generated and expert product reviews from all over the web, and scores them on a scale from zero to 100 using. Tom Patterson, Wize's CEO, started as an entrepreneur in residence with the Mayfield Fund a year ago.
http://wize.com/pressroom/wize-receives-4-million

San Mateo-Based Online Payments Provider Bitpass to Shut Down

San Mateo, Calif. - Bitpass, a four-year-old, San Mateo-based provider of online payment processing services, said that it is discontinuing operations due to "circumstances beyond our control," CEO Matthew Graves wrote in an email to customers. The company said that it will close all of its U.S. Buyer accounts on Jan. 26, refunding all unspent monies to account holders. Bitpass said that the changes do not affect buyers and merchants with Australian dollar denominated accounts. The company has raised a total of $13 million in venture capital financing during its course of operations.
http://www.bitpass.com

Bay Area Companies Raise Most Venture Capital Since 2001

San Francisco -- Despite a slow fourth quarter, the amount of venture capital invested in Bay Area companies reached its highest level in five years in 2006, according to new figures released by Ernst & Young and Dow Jones VentureOne. Local companies raised about $9.05 billion, up from $8.5 billion a year ago, with the vast majority (more than $6 billion) coming in the information technology sector. The annual total was the highest since 2001, when area companies brought in nearly $11.7 billion. The figure came despite just $1.94 billion raised during the fourth quarter, the lowest amount raised in seven quarters. Some of the top area funding rounds during the quarter went to biotech firms, including South San Francisco-based Synosis Therapeutics ($32.5 million), San Bruno-based Gentiae Clinical Research ($23.5 million) and Palo Alto-based InteKrin Therapeutics ($23 million). Nationally, companies raised a five-year high of $25.75 billion last year, up 8% over 2005 levels, though the fourth quarter was the slowest of the year.
http://www.ventureone.com
http://biz.yahoo.com/pz/070122/112219.html

Santa Clara-Based Stoke Raises $20 Million in Third Round of Funding

Santa Clara, Calif. -- Stoke Inc., a Santa Clara-based developer of hardware and software that allows network operators to deliver multimedia services concurrently over fixed and wireless broadband access technologies, said on Monday that it has raised $20 million in its third round of funding. DAG Ventures led the round, which also included previous investors Kleiner Perkins Caufield & Byers and Sequoia Capital. The company, which has now raised more than $50 million to date, said that it will use the new capital to increase its sales and marketing activities, as well as to bolster its product development.
http://www.stoke.com/news/pr/pr012207.html

San Mateo-Based KSR Raises $9 Million in New Funding Round

San Mateo, Calif. -- KSR, a San Mateo-based provider of managed risk services, said on Monday that it has secured $9 million in a new round of funding, led by Paladin Capital Group's Homeland Security Fund. Previous investor Trident Capital also participated. KSR said that it will use the new capital to expand its government business and close the divide between Homeland Security and corporate security. Kenneth Minihan, a managing director of Paladin and former director of the National Security Agency (NSA)/ Central Security Service, will join the company's board of directors.
http://www.paladincapgroup.com/portal/index.php?option=com_content&task=view&id=52&Itemid=1
http://www.ksr.com/

Palo Alto-Based HP Names Jon Flaxman as Chief Administrative Officer

Palo Alto, Calif. -- Hewlett-Packard, the Palo Alto-based technology giant, said on Monday that it has promoted  26-year company veteran Jon Flaxman to the newly created position of chief administrative officer (CAO) and executive vice president, effective March 1. Since 2001, Flaxman has served as the company's controller and senior vice president, as well as its principal accounting officer. HP also named 18-year company veteran Jim Murrin to replace Flaxman as controller, principal accounting officer and senior vice president, and John McMullen as treasurer and senior vice president, replacing Cathie Lesjak, who became CFO at the start of the year.
http://www.hp.com/hpinfo/newsroom/press/2007/070122c.html

Google Files for Patent on Digital Billboard Technology

Mountain View, Calif. -- Mountain View-based Google has filed for a patent on digital billboard technology that would turn "kiosk-type billboards" in malls, airports and elsewhere into "a network of electronic display devices," The Wall Street Journal reported. The company, however, cautioned that the application, filed on Dec. 21, will not necessarily result in a new service. "We file patent applications on a variety of ideas that our employees come up with. Some of those ideas later mature into real products or services, some don't," Google spokesman Ricardo Reyes told The Journal. Such a service could integrate Google's successful keyword-based ad system, which is also the foundation of recent forays by the company into newspaper and radio ads, into another untapped segment.
http://online.wsj.com/article_email/SB116924523436881983-lMyQjAxMDE3NjE5OTIxNDk1Wj.html (subscription required)

Report: Cost of Apple's iPhone Primed to Come Down

Cupertino, Calif. -- The hefty $499-$599 price tags for Cupertino-based Apple's forthcoming iPhone may eventually come down, according to market research firm iSuppli. The firm estimated that the cost for Apple to manufacture the devices -- which combine a cell phone, Internet access device and video iPod -- is about $246 for a 4GB model and $281 for 8GB. "With a 50% gross margin, Apple is setting itself up for aggressive price declines going forward," Jagdish Rebello, a director and principal analyst with iSuppli, told the Associated Press. Apple has said that it aims to sell 10 million iPhones in 2008. The iPhone is scheduled for release in July.
http://www.washingtonpost.com/wp-dyn/content/article/2007/01/18/AR2007011801360.html
http://www.isuppli.com

Los Altos-Based Silicom Ventures Fund Invests in Israel's Yoggie Security Systems

Los Altos, Calif. -- Silicom Ventures Fund, a small, Los Altos-based venture fund that operates in parallel with Silicom Ventures, said on Monday that it has invested in Yoggie Security Systems, an Israel-based developer of network security technology designed to protect mobile computers in a corporate or individual setting. The Fund, along with Silicom Ventures members, has co-invested a total of $750,000 in the company's past two rounds. Yoggie has completed its production line and begun its sales campaign. The funding will be used for expanding the company’s distribution of marketing and sales channels in the U.S. and Europe. Silicom Ventures Fund's partners include such prominent high tech veterans as Dan Maydan, the president emeritus of Applied Materials, and Dan Vilenski, the chairman of Applied Materials Israel.
http://biz.yahoo.com/bw/070122/20070122005224.html?.v=1