ProSavvy – a company I’ve been on the board of since 1996 – announced this week that they have merged with eWork.  The combined company (called eWork) is the leader in consulting project and contracted workforce services procurement, management, and payment and is a $42 million, profitable company.  We continue to be significant investors in ProSavvy and Seth Levine – who works with me at Mobius in Colorado – has joined the eWork board.

Seth has a comprehensive post on the merger, some history, the rationale, and the strategy of the go-forward business.  We’re very excited about the transaction and the prospects for eWork going forward, as ProSavvy was a solid, but slow growth company that needed a bigger overall platform to achieve its full potential.  We’ve been looking patiently for a merger partner for the past year, having talked to a number of companies that were tangential and/or complimentary to ProSavvy.  eWork was the most promising fit and – after a long effort on both sides to make sure that the combined company was greater than the sum of its parts – we moved forward with a deal.

The combination of scale, growth, and profitability matters a lot these days with regard to value creation for enterprise application software and services companies.  The combination of eWork and ProSavvy satisfies all of the parameters nicely and we’re optimistic about our ability to create a company with meaningful long term value.

We had a good day yesterday at Mobius VC as MCI announced they were acquiring NetSec for approximately $105m. 

My partner Rex Golding has been involved since NetSec’s first venture round in mid 2000.  As this investment was done at the peak of the bubble, we – like many other venture firms – were investing heavily in the promise of companies that provided “managed services” and were labelled “managed service providers (MSPs).”  In many cases, post-bubble, the outcome of these companies was disappointing.  NetSec – which specializes in managed security services (being one of the notable “MSSP’s”), built a very strong government practice, and has a deep, experienced leadership team.  Things were challenging for the company in the 2001 – 2002 time frame, but everyone was patient, the team continued to systematically build a solid business, and has seen phenomenal growth the past 24 months. 

Several months ago, another significant MSP – Inflow – was acquired by Sungard.  As with the MCI / NetSec acquisition, this was a successful exit for Inflow (disclaimer: I’m an investor in one of the VC funds that was invested in Inflow), and give the well worn theory that two data points makes a trend, may be the beginning of positive exit activity for the MSPs that survived the downturn and built sustainable businesses in 2003 and 2004. 

One of the key themes that has been floating around recently in the venture business is that the patient capital through the downturn (e.g. folks that hung in there with solid businesses in 2001 and 2002) is starting to be handsomely rewarded for their perseverance.  We’ve had a few nice cases of this in the past 12 months – such as IAC’s acquisition of Service Magic – and a number of my colleagues are also seeing solid successes for companies formed in the 1999 – 2000 time frame.

Congrats to Rex, Glenn Hazard, and the team at NetSec!

RSS and Blogging are starting to permeate mainstream media.  It’s both a blessing and a curse when something makes the front cover of the major business rags.  In this case, we’re still so early on the adoption curve that these major press mentions are good early indicators that RSS / Blogging is growing real roots.

CNBC’s segment is two minutes long and was at the tail end of Closing Bell a week ago.  The segment was an introduction to RSS and features NewsGator / Greg Reinacker and Yahoo! / Scott Gatz.

The Fortune article – Why There’s No Escaping the Blog – is a big one full of good stuff including mentions our of companies Technorati and NewsGator.  In the “best quote in the article” category, we have Steve Hayden, vice chairman of Oglivy & Mather, saying “If you fudge or lie on a blog, you are biting the karmic weenie.  The negative reaction will be so great that, whatever your intention was, it will be overwhelmed and crushed like a bug. You’re fighting with very powerful forces because it’s real people’s opinions.”

Karmic weenie – perfect – I wish I’d said that. 

My friends at Return Path just released a book called Sign Me Up! : A marketer’s guide to creating email newsletters that build relationships and boost sales.  We’re really excited about it – Matt Blumberg does a nice job talking about it in his post today.  I read the final draft a few months ago – if you care about email marketing in any way, this is a must read. 

Writing a book is a bitch.  I was involved in one of the first books on the web called Build a Web Site: The Programmer’s Guide to Creating, Building and Maintaining a Web Presence (Practical Programming).  I was chairman of Net.Genesis at the time – we managed to get a book contract with a publisher called Prima (who now appears to be part of Random House) – they paid us a whopping $25,000 advance and we committed the book in a few months (three or four – I can’t remember.)  I remember the Net.Genesis guys torturing themselves to get this done with a Prima-sponsored writer who had minimal technical chops, but was a good person and forced the beast out.  It’s pretty cool to look back and see one of the first web books with a publishing date of April 1, 1995 (no – it’s not an April 1st joke, but it sure felt like one at the time.) 

For some unknown reason, the memory of this experience had the same half-life as childbirth, and the Net.Genesis guys wrote a second book called Build a World Wide Web Commerce Center: Plan, Program, and Manage Internet Commerce for Your Company – this one was even more painful (I remember Raj Bhargava and Eric Richard surrounded by piles of paper pulling all nighters as they tried to grind it out in the midst of running a rapidly growing software company) – and I can’t even remember the size of the advance.  Its publication on June 1, 1996 was the end of Net.Genesis’ book publishing career (although they went on to publish plenty of software.)

I’m proud of Matt and crew for getting this one out.  Matt and his team didn’t seem to lose their minds writing this book – in fact, Matt’s ends his post by saying “boy was the experience we had different than it would have been 10 years ago.”  No doubt (and thank “whatever diety you worship, if any!”)

I love my T-Mobile Sidekick (powered by Danger’s hiptop platform) – which you can currently get for free on Amazon.com with all the rebates.  Of course – since Danger is one of our portfolio companies – I’m supposed to love it.  But – I really I do (I’ve been a handheld user forever and have a closet full of Palm’s and RIMs, including a Palm VII (yuck-o-loa – remember that dog?.)

I’m not alone.  Danger just announced that over three billion (3B!) IMs were sent and received over the hiptop wireless platform in 2004.  For perspective, there were 22.8B SMS messages sent across ALL OF the carriers in the US last year.  If you’ve ever sent an SMS message on a cell phone and had the opportunity to send an IM on a hiptop, you’ll understand why IM’s on hiptops represented 10% of the total SMS traffic on cell phones (a huge percentage of traffic on a small percentage of enabled devices when you count cell phones + Sidekicks.)

IM just keeps on rolling.

Rally Software announced that is has closed a $4.5m round of financing. We co-led the financing with Boulder Ventures. Rally’s progress can be directly linked to their outstanding team of ex-BEA and ex-Rational folks who know the software startup drill really well.

NewsGator has been having fun with RSS on TV’s for a while via the NewsGator Media Center edition (if you are running either Microsoft Windows XP Media Center or SnapStream Spotlight, check it out.) Today, NewsGator announced that it is supporting DivXNetworks Connected Certification Program. We want to help you get your RSS feeds any time, any place, and on any device.

Technorati has just launched its Keyword Watchlist service which allows you to track and subscribe via RSS to live searches on keywords and phrases. They’ve also added boolean operators (AND, OR, NOT) and grouping operators (parens) to their search, making it much more powerful than simple keyword search. Dave Sifry talks about it on his blog – try it out.

I commend all of the companies (and people) who have stepped up to contribute financially to the relief and reconstruction efforts that are needed as a result of the devastating Tsunami in the Indian Ocean. The blogosphere has been very active here and I’m proud to announce that NewsGator has joined in by committing 3% of their revenue for the next 90 days to this effort via the American Red Cross.