On 4/26/05, Feedburner announced support for Google AdSense ads in Feedburner feeds.  I heard from a few skeptics stuff like “yeah right – when will this actually happen?”

Today (one month later), Feedburner has put this functionality into production.  If you have a Google AdSense account (like I do), it takes two minutes (two check boxes and one piece of data) to implement Google ads in your feeds.  It’s still “beta” (at both Google and Feedburner) so there will probably be some stuff to shake out, but it’s trivial to turn on and ready to go.

I love web services.  No six to twelve month product release cycles anymore.  You come up with something important – it’s ready to roll in 30 days or less.

Seth Levine has a great blog post on getting a job in the VC business.  I get asked this question via my blog about once a week – Seth has done a nice job of giving me a URL to reference for the answer to this question.

Simultaneously, NewsGator Online just launched RSS feeds for job searches in partnership with Work.com.  You can now set up a feed with filters by job category, state, city, and job title.  Job postings are automagically delivered to you via RSS into your NewsGator Online newsreader. 

No Seth, this is not a hint.

I’m stunned.  It’s 11am Colorado time and there are already 200+ posts listed on Technorati about NewsGator’s acquisition of FeedDemon.  It’s amazing how the word spreads and it is fascinating to read the feedback (both positive and negative), speculation, and rants (good and bad) about this deal.

I’ve noticed several negative comments asserting that “this was driven by the VCs.”  While I’ve clearly been involved in NewsGator’s strategy (and Fred has some flattering words to say on the matter), JB and Greg have been driving the strategy and execution of this business (as a VC, I get to “be helpful”, hopefully in a more productive way then the IRS when they show up and say “we are just here to be helpful.”)

Early on in my exploration of RSS aggregators, I came across FeedDemon (how could you miss it – it’s the clear leader of the Windows Desktop aggregators.)  I played around with it, liked it, and kept my eye on it.  As my Feedburner subscribers increased and I started to have enough subscribers where my data meant something, the position of the top aggregators became clearer (following are my top 6 as of today: Bloglines, NewsGator Online, FeedDemon, My Yahoo, NetNewsWire, and NewsGator Outlook – hint – if you add up NewsGator Online, FeedDemon, and NewsGator Outlook, #1 is still Bloglines (by a little) but the gap between Bloglines / NG and everyone else is huge.)

In the fall as we were crafting our long term strategy – especially around RSS in the enterprise, the idea of a desktop client kept coming up.  We had a unique market position with our Outlook client, but as we laid out our enterprise strategy, it was clear that some users wanted a desktop client.  As we speculated on the future use case for RSS, item level synchronization became a critical item and we started thinking about how best to do this across all the various aggregators (duh – think like a platform – build an API dudes – get it together.)  So – we started working on the API and Greg reached out to Nick to integrated FeedDemon and NewsGator at a sync level (arguably the version that was integrated was pretty light weight.)

At some point in a conversation that Greg, JB, and I were having, one of us (I can’t remember who) said something like “why don’t we approach Nick and see if he’s open to joining forces.”  Greg called Nick and you can read about the rest of the story on Greg or Nick’s site.  This deal would have never happened if (a) Greg didn’t have the vision he had, (b) Greg wasn’t able to articulate the vision, (c) Greg and Nick didn’t have deep respect for each other as technologists and competitors, and (d) we weren’t collectively (including Nick) able to paint a long term compelling vision for NewsGator.

I’ve seen a couple of posts speculating that Feedburner and Technorati are next in line to be acquired by NewsGator since they share an investor (me).  While Feedburner, Technorati, and NewsGator are all complimentary and are discussing a variety of ways to work together, I think it would be a dumb idea to combine these companies.  As an investor, I’ve placed my bets on three companies that are the current leader in each of their segments (Aggregator: NewsGator; Feed Management: Feedburner; Search: Technorati).  You can argue about how you define the specific segments, but these are mine (the one I missed that I wish I had an investment in is the CMS segment.)  I’d much rather try to create three separate platform companies that are complimentary then jam them together into one big mess and fight the battle on three fronts.

There’s a lot more coming, but this is our strategic move of the day.  Nick – welcome aboard.

I’m an early stage investor, so it’s unusual for me to make a late stage investment.  I made one last week in Klocwork, where I led a $10 million investment with existing investors Pequot, USVP, and Cisco.

One of the areas I like to invest in is companies that build software to help companies build software (more commonly known as IT Management as an umbrella over lots of sub-segments, including ALM, IDE, SQA, and Security).  In 2001, we spent some time working with a few entrepreneurs we knew trying to put together a pre-production source code “static analysis” product.  At the time, post-production code security / SQA tools were becoming the rage (e.g. the rapid rise of Mercury Interactive), but no one was concentrating on finding the security issues pre-production (or at the source code level.)  We weren’t able to pull something together – we just couldn’t convince ourselves that we had something fundable.  Eventually, we bagged the project, which happens when you are an early stage player.

At about the same time (2001), Klocwork was spun out of Nortel by Pequot Ventures.  Four years later, they’ve made spectacular progress and are the clear leader in this segment.  As the issues around security continue to increase, Klocwork’s relevance has also increased as the root cause of many security issues are buried in millions of lines of source code.  Klocwork has a highly effective and well proven (through numerous customers) approach to this problem.

Rajeev Batra – a principal in our California office – had been following Klocwork for a while.  As the round spun up, he roped me in because of my other investments in and around the IT Management segment (including Rally, Newmerix, and StillSecure).  I felt in love with the team in our first meeting I had with them and we quickly moved to a deal. 

The deal was a competitive one, so we moved quickly once we decided to take the plunge.  It was five weeks from my first meeting to the time we closed, although Rajeev had been working on the deal for a while.  My experience with the Klocwork team during the deal process exceeded my expectations and – while there’s always a honeymoon period on new investments – I feel really good about this one (and hope they do about me.)

Microsoft announced yesterday that their MSN division acquired MessageCast.  We were the seed investors in MessageCast and my partner Heidi Roizen sat on the board.

As with many acquisitions that happen early in the life of a company, this one is bittersweet.  On one hand we are very happy with the deal and excited for the entrepreneurs (Royal Farros and Dave Hodson) and their team.  On the other hand, we were enthusiastic about the long term prospects for MessageCast and were looking forward to a continued working relationship with a group of folks we know and love working with (Heidi and Royal go back many years as they were partners in T/Maker – the folks that brought us clip art.) I was the backup partner on MessageCast and delighted in badgering Royal and Dave about RSS whenever I had the opportunity.

This is a completely logical deal for both Microsoft and MessageCast.  They had been working very closely together around the MSN Alert service.  MessageCast had integrated MSN Alerts with RSS and build an extremely publisher friendly service to enable a publisher to distribute his RSS feed (or any other data feed) via Microsoft Messenger.  MessageCast was beginning to work with other IM services (the usual suspects) but had such significant IP around the MSN Alert SDK it made perfect sense for Microsoft to integrate this into their Alerts business.

Royal, Dave, et.al. – congrats.  Microsoft – well done!

NewsGator and Factiva announced a partnership today.  As part of this, Factiva customers (and there are a lot of them) will be able to transform their existing “Factiva Track Folders” into RSS feeds and view them via a NewsGator Business Subscription.  Also – all NewsGator premium subscribers will start receiving Factiva’s Editor’s Choice Feeds. 

If you don’t know of Factiva, they are a Dow Jones & Reuters Company that provides content from over 9,000 sources, including Dow Jones and Reuters Newswires and the Wall Street Journal. NewsGator has a long series of partnerships like this queued up – more coming soon.

Google Ads have started appearing in select RSS feeds on a trial basis.  This has been long anticipated, is a completely logical extension of Google AdSense, and – while some people may fight ads in RSS – it’s an inevitable part of the RSS ecosystem. 

Feedburner announced today that they support Google AdSense in feeds.  Feedburner already supports Yahoo! Search Marketing (fka Overture Advertising) and Amazon Associates as part of their “commerce services” – it was straightforward for Feedburner to incorporate Google AdSense into this.  While the publisher (e.g. you, me) needs to set up Google AdSense and be invited into their Google AdSense for RSS program, once your Google AdSense ID is approved for RSS, you will be able to immediately turn this capability on in Feedburner with minimal configuration.

As Dick Costolo – the CEO of Feedburner – mentioned in a post about the financing round we led, Feedburner’s core competency is managing complexity with regard to RSS feed management.  While setting up Google Ads on a web site is pretty straightforward (but still requires some technical understanding), it gets a lot harder to modify your RSS feed to include Google Ads.  Feedburner makes it simple, lets you have more flexibility (e.g ad frequency, category optimization, ad formatting), and handles all the weird issues that Feedburner has learned about my managing a large number of feeds (e.g. feed read/unread problems when you insert ads, ad formatting in different RSS aggregators).

Last week, NewsGator announced that they had raised a new round led by Masthead Venture Partners.  This brings the total amount raised by NewsGator to over $10 million.  David Beisel – an associate at Masthead who worked on the deal – has an extensive post on why they decided to make the investment.  Rather than repeat what David said here, check out his post on why he likes Masthead’s NewsGator investment.

In addition to all the obvious reasons I’d be excited about this (additional capital, strong validation of NewsGator’s position in the market, more hands on deck to help build the company), I’m particularly happy to have the opportunity to work with Rich Levandov – the partner at Masthead who is joining the NewsGator board.  Rich and I worked together in the mid-1990’s when we were “Softbank affiliates.”  At that time, Softbank had started aggressively investing in US-based Internet companies and the initial team at Softbank roped in a few people – including Fred Wilson, Jerry Colonna (fka “the Flatiron guys”), Rich, and myself in an “affiliated” role.  We did investments with Softbank and were an extension of the initial Softbank team.  Rich had two very successful investments with Softbank – Art Technology Group (Nasdaq: ARTG) and Personalogic (acquired by AOL).

This affiliate relationship ended when a group of us – including me – decided to raise the first Softbank Technology Ventures fund – which was a Softbank “sponsored fund” (independent of, but still affiliated with, Softbank, who became one of our limited partners.)  Rich opted not to join this fund and while we stayed in touch, we didn’t make any investments together. 

At the beginning of this year, Rich gave me a call asking about NewsGator.  We had just closed a round and were not looking for additional money (or investors) as the company was well funded.  However, I got excited about the idea of working on something with Rich again and he quickly got engaged with the NewsGator gang.  The normal VC process ensued with both sides getting to know each other and it quickly became clear that Rich / Masthead would be a big addition to the team.  We reached terms that made sense for all parties about a month ago and quickly closed the deal.

While the team at NewsGator has spent some time on this financing, they have a huge pipeline of new things coming in the next 90 days.  For a taste of the stuff we are doing with traditional media companies, take a look at the demo of News Hound, the new Denver Post News Aggregator.

I’m thrilled excited about the progress StillSecure has been making.  Raj Bhargava – the CEO – and I have done five companies together in the last decade (going back to our first one – NetGenesis) and I love working with the guy.  StillSecure had an awesome year last year, but Raj saw an opportunity to meaningfully expand StillSecure’s footprint by building out a “security management platform”, rather than a series of “security point solution products.”  StillSecure is starting from a position of having several of the best and hottest products in the segments they play in, so expanding the footprint to be more of a platform is a logical step.

StillSecure VAM – the “vulnerability management” component of the product line provides a superb stand alone vulnerability remediation product.  However, StillSecure went a step further and built a VAM Integration Framework to be able to incorporate VAM into any existing IT infrastructure and rather than serve as a stand alone product, it becomes the central command and control center for all vulnerability–related activities.

Today, StillSecure announced two vulnerability scanner connectors – one for ISS Internet Scanner and one for eEye Retina.  If you are an existing ISS or eEye customer, you can now integrate it with the StillSecure VAM Framework and use the two products together, leveraging existing investments in the ISS and eEye products.

You’ll continue to see this “platform” theme from many of my companies – I like the way John and Rich describe it and its a natural strategy for many of the things I like to invest in.