The Daily Start-Up: Can Business Networking Software Really Be Free?

Top stories in today’s VentureWire:

Art by Mike Lucas

Ever since Mark Zuckerberg and his co-founders created Facebook Inc., more companies are making software that works like the social networking phenomenon, but with a business twist. While start-ups Jive Software Inc. and Yammer Inc. are proving there’s corporate demand for this service, their business models expose a debate over whether business customers should pay for software, as they’re accustomed to, or use a free Web-based service that encourages them to upgrade. VentureWire reports on the state of business networking software.

Philo Media Corp., which recently pivoted from a social TV check-in service to a way for entertainment studios to spread advertising to consumers across social media, has been acquired by LocalResponse Inc., an advertising platform that aggregates public posts and check-ins. Philo had raised an undisclosed amount of funding from DFJ Gotham Ventures, Eniac Ventures, North Bridge Venture Partners and Stephen Lambert, a television producer whose credits include “Wife Swap,” “Faking It” and “Secret Millionaire.”

Also in today’s VentureWire: After receiving the green light from the FDA for its high-tech treatment for baldness–a robotic system to transplant individual hair follicles–Restoration Robotics Inc. said it has raised a $41 million Series C round that it expects to carry it to profitability…Brightsource Energy Inc., which is currently in registration to go public, is now ready to substantially increase the power output of its solar projects by adding storage capability…and Tudou Holdings Ltd. unveiled estimated terms of an initial public offering of 6 million American depositary shares as the Chinese video-website owner aims to raise proceeds to fund growth efforts.

(VentureWire is a daily newsletter with comprehensive analysis of all the investments, deals and personnel moves involving start-ups and their venture backers. For a two-week trial, click here.)

Elsewhere around the Web:

Can New York ever rival Silicon Valley? The New York Times asks several local venture capitalists and entrepreneurs for their opinion on what the city needs to compete with the West Coast. Angel investor and entrepreneur Chris Dixon also weighs in separately on his blog.

Start-up CEOs — maybe you should think twice about raising that fourth round of funding. Altos Ventures’ Ho Nam analyzed more than 60 companies from his firm’s portfolio to find out when VCs decide to make a CEO change. He found that if a company needed four rounds or more, the replacement rate was 85%.

Venture firm Alsop Louie Partners’ latest associate is a 20-year-old Stanford student. Meet Ernestine Fu, whom Forbes profiles as an “all-star entrepreneur.”

Silicon Valley isn’t exactly known for its style, so we think GQ’s list of the “15 Worst-Dressed Men of Silicon Valley” is a bit unfair. It’s also odd because, as Fortune’s Dan Primack points out, six of those on the list don’t actually live in Silicon Valley. But that doesn’t mean it’s not fun to look at the slideshow.

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Social networking on the rise in NI

Use of social networking sites has doubled across the region since 2008 and according to Ofcom’s annual Communications Market Report, half of people now access them regularly.

Ofcom Northern Ireland director Jonathan Rose said:

“Northern Ireland has caught up and is now on a par with the UK in terms of social networking. It’s still the most popular use of the internet.”

Since 2008, broadband penetration in Northern Ireland has risen to 75%, making the region second only to England among the UK regions for take-up.

The 5% increase from last year reflects increasing speeds, with the roll-out of super-fast broadband across the region and Belfast in particular enjoying lightning speeds.

Customers are going online for everyday needs and tasks, with half watching television, video or checking bank accounts, and a third searching for information on health-related issues.

Mr Rose said there is a shift in how social networking is used.

“It’s still the most popular use of the internet, but there’s a slight flattening out of the people accessing them from their home broadband connection and they’re starting to access it from their mobile phones or smart phones.”

Meanwhile the report also highlights around 10% of homes here are still relying on the analogue TV signal to watch shows.

The digital switchover is due to happen next year – Northern Ireland one of the last areas in the UK to go fully digital – and for those who are not prepared, they will be left looking at a television screens.

In urban areas less than eight percent of homes are still using the analogue signal, but in the countryside it is almost double that figure, at 15%.

Michael Wilson is Managing Director of UTV. He said he is not surprised at the figure.

“Northern Ireland is in no worse a position than other UK regions were prior to the education process.

“We will be telling all our analogue audience on UTV that the signals will be switched off. They’ll be getting those messages on screen, so if you’re already watching digital you won’t get the message.

“No member of the analogue audience will be unaware that the signal will be going, so I think the figure of 10% is exactly where we would expect to be with 18 months to go before the digital switchover.”

© UTV News

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