SocialThing, a lifestreaming/social aggregation site, has been acquired by AOL. We currently have no information about the final price of the acquisition, but given that SocialThing was still in private beta, we assume that it was relatively low. SocialThing was founded in 2007 with $15,000 in seed capital from TechStars. AOL seems to be rather interested in the lifestreaming and aggregation business these days, as it just released its AIM BuddyUpdates yesterday.

While it is not unusual for a company to be bought up this quickly, it is interesting that SocialThing was acquired before it even came out of private beta. This could mean that AOL was less interested in the technology behind SocialThing and more in the team behind the service. SocialThing, after all, is still in such an early phase of its development that it doesn’t even support Microsoft’s Internet Explorer yet.

While SocialThing does the things it does well, it never quite got the hype and user base that its nearest direct competitor Friendfeed has been getting for the last few months. While SocialThing CEO and founder Matt Galligan pointed out to us that he doesn’t think SocialThing is actually competing with FriendFeed, the similarities between the two are just too striking.

It is true, though, that SocialThing is less focused on creating an internal community and puts more emphasis on sharing information back to the aggregated services than Friendfeed, especially since they just integrated ping.fm updates.

It will be interesting to see what AOL is going to do with this new property. Chances are that it will be integrated into AOL’s new BuddyUpdate service or that the SocialThing team will move over to work on BuddyUpdates while SocialThing itself will become a thing of the past.

On July 17, ValueClick provided lower revenue guidance of $163M to $164M and EPS guidance of 17c to 18c. The company also lowered its 2008 revenue guidance to a range of $655M to $675M, and EPS of 69c to 71c. Craig Hallum said it believes the Q2 weakness and reduced outlook are less about ValueClick and more about macroeconomic issues. Except for Google, the firm had doubts that any of the big boys of online advertising will be posting solid results and forecasting strength.

The CEO of ValueClick said, “Due to increasing macroeconomic uncertainty, we no longer anticipate the seasonal strength in ad spending we typically see in the second half of the year.” Craig Hallum expects the company will start putting its $101M buyback authorization to work sooner, rather than later. In its opinion, the dramatic decline in fundamentals has been more than captured in the stock price.

Other recent Street commentary: July 30, JP Morgan assumed coverage and downgraded ValueClick due to a lack of near-term catalysts as they expect business to remain weak through 2008. Also, on July 28, Needham said it thinks the potential for downside is limited and already priced into shares, and it thinks the company could become a takeover target. Throughout the last few months’ ValueClick options, the calls have been active on renewed takeover chatter by someone of the likes of Microsoft.

comScore found that over 28 million people in India ages 15 and up accessed the Internet from home and work in May 2008, a 27% increase over the previous year. What is most striking about that figure is that Internet users in India currently account for only 3% of the population, which leaves a lot of room for growth.

The average Internet user in India went online 25 times during the month for 28 minutes per visit.

Google, Yahoo! and Microsoft sites—in that order—led the way as the most popular online destinations for users in India.

The leading local site was Rediff.com, followed by the government site NIC.

Comscore announced the recent Search Engine Market Share report.  Google domination is obvious. Yahoo raise its market share by 0.3% (in comparison with the previous month) but still second and Microsoft Sites are still below 10%. 

comScore Core Search Report* June 2008 vs. May 2008 Total U.S. – Home/Work/University Locations Source: comScore qSearch 2.0
Core Search Entity	Share of Searches (%)
	May-08	Jun-08	Point Change Jun-08 vs. May-08
Total Core Search	100.0%	100.0%	0.0
Google Sites	61.8%	61.5%	-0.3
Yahoo! Sites	20.6%	20.9%	0.3
Microsoft Sites	8.5%	9.2%	0.7
Ask Network	4.5%	4.3%	-0.2
AOL LLC	4.5%	4.1%	-0.4

 

* Based on the five major search engines including partner searches and cross-channel searches. Searches for mapping, local directory, and user-generated video sites that are not on the core domain of the five search engines are not included in the core search numbers.

 

According to a comment made at Microsoft’s Analyst Day today, Microsoft and Facebook are preparing a search and advertising deal that would lead to the integration of Microsoft’s Live Search and search advertising into Facebook. Microsoft already provides ads on Facebook as part of a ’strategic alliance’ and Microsoft holds a $240 million equity stake in the company. No information about the financial specifics of the deal were mentioned so far and it is not clear if this deal would be exclusive.

Judging from the information available to us from the transcript of the call, Microsoft’s main reason for doing this deal is to get more people to know about Live Search. As part of that effort, Microsoft will also ink a distribution deal for its toolbar with HP.

Also, according to Steve Ballmer, Microsoft will be providing an API to Facebook which will allow them to create a “rich search experience for the Facebook users and that is something that they will launch in the fall working with us. And it will carry both our web results, as well as our page search advertising.”

This deal would mirror the one Google did with MySpace last year. In that deal, Google guaranteed MySpace $900 million in shared ad revenue for the next three years. However, it’s worth noting that the Google/MySpace deal has not been a huge success for Google. Users do not typically initiate a lot of searches from within social networks and monetizing advertising in social networks has turned out to be even hard.

Chief Executive Steve Ballmer on Thursday defended Microsoft Corp’s need to make heavy investments in its Internet businesses but said the company was “done,” for now, with pursuing Yahoo Inc . “There’s nothing under discussion between the two of us,” Ballmer told investors of how six months of various talks had reached an impasse earlier in July.

“We had a set of principles, we talked about them, it didn’t work out,” he said. “Fine, we’re done. We can move on.”

The message for Microsoft’s annual meeting with Wall Street analysts, an all-day affair at its headquarters in Redmond, Washington, was that it had a post-Yahoo plan to turn around its online services division and a strategy to take advantage of future opportunities, even as its Internet chief departs.

“There is this huge, huge, huge new opportunity around the Internet and online and we have to embrace that opportunity and invest in that opportunity,” Ballmer said.

Shares of Microsoft have fallen 8 percent over the last week since the company forecast an outlook below Wall Street estimates and revealed an additional $500 million investment into its online unit, even as it chalked up further losses.

Charles Di Bona, a software research analyst at Sanford C. Bernstein, said Ballmer’s comments did not give enough details about how that additional investment will be spent and how the company arrived at that decision.

“It’s spending $500 million dollars and then it says we’ll tell you later how we’ll spend it,” said Di Bona, who has an “outperform” rating on Microsoft. “The market’s concern is not about how it is running its core business. It’s about decisions about larger chunks of money that people can’t track.”

Ballmer said Microsoft is willing to endure online division operating losses that amount to between 5 percent to 10 percent of the company’s total operating income, which reached $22.5 billion in fiscal year 2008, until the search and advertising business reaches “scale.

Google’s on and off negotiations with Digg have been back on in a big way for the last six weeks, we’ve heard from multiple sources inside of Google, and the two companies are close to a deal that will bring Digg under the Google News property. The acquisition price is in the $200 million range, says one source.

The companies are now in final negotiations according to our sources, although it could be a couple of weeks before it closes. And while the major deal points have been agreed on, the acquisition could still fall apart. Microsoft, which was previously interested in the company, may be willing to step back in at a much lower price.

Most of Digg’s revenue comes from a three year ad deal with Microsoft, which will be terminated on a sale to Google. Digg has raised $11.3 million in venture capital.

Source: Techcrunch.com

Online video continues to see an increase in viewership and the amount of time viewers are staying on-site to watch and download videos. According to a new report from comScore, more than 12 billion videos were viewed during the month of May.This is an increase of 1 billion viewed videos over the April reporting period.

The report finds that 74% of the total online population in the US watched a video during the reporting period and that more than 4.1 billion videos were viewed through Google sites, including YouTube, alone. On average, videos lasted 2.7 minutes.

Both MySpace and Fox Interactive saw increases over April. MySpace users viewed more than 700 million videos in May. Meanwhile, Fox Interactive saw their market share increase to reach 6.4%, making them second only to Google Sites. Fox Interactive gained 1.3 share points on the leader. Google sites are firmly in the lead for online video with a 34% market share. Yahoo Sites, meanwhile, are in third place with 2.9% market share.

On average, viewers watched 85 videos each. 83 million unique users logged on to Google Sites while 60.7 million logged on to Fox Interactive sites. Yahoo Sites (40 million uniques), Microsoft Sites (29 million unique) and Time Warner - AOL (24.6 million unique users) rounded out the top five.

Microsoft Live Search has been steadily in the third or fourth place for market share, behind Yahoo and Google, for years. The addition of Powerset’s natural search languages could enhance their profile for searchers because natural search brings additional queries to the table. Last year, Powerset signed an exclusive agreement with Xerox which gave them the ability to utilize their natural language technology; this increased their platform’s power.

Natural search engines return search queries based on the language used in a query. Keyword search is still the top dog in the industry but there are some who say natural language search is actually a better platform because the results are contextually relevant to the query placed. In addition to returning queries based on how often a keyword appears in a piece of content, natural language search returns queries based on meaning. Powerset’s platform also allows users to scan and surf results as their tools from the original query follow users’ progress across the web.

Court documents in the ConnectU case reveal that when it comes to the price of Facebook common shares, Facebook’s board values the company at $3.75 billion — far lower than the $15 billion valuation set by Microsoft’s $240 million purchase of 1.6 percent of the company. As an investor, Microsoft owns preferred stock — worth more in part because, in case of an acquisition or an IPO, it’s the stuff that gets sold first. That means Facebook board really thinks the company isn’t worth $3.75 billion or $15 billion, but somewhere in between.

Actual shareholders — including Facebook employees, we’ve heard — are more than willing to move their shares at a $4 billion valuation. The revealing court documents, in which ConnectU lawyers complain about Facebook’s valuation, are embedded below. Before you feel too sympathetic, ask yourself: Isn’t this the kind of thing lawyers are paid to know?

Source: Valleywag