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Software, which historically accounts for a large slice of all IT venture investments, fell 13 percent from a year ago to $1.15 billion. And the number of software deals declined to 125 during the third quarter, compared to 149 a year ago.

Venture capitalists pulled back sharply on U.S.-based tech deals in the third quarter, pushing the flow of deals down to a level that hasn’t been seen in more than a decade, according to a report released over the weekend by Dow Jones VentureSource.

“Clearly, the current economic crisis is already impacting the venture industry, which has traditionally been relatively insulated from fluctuations in the broader economy,” Jessica Canning, global research director of Dow Jones Venturesource, said in a statement.

Outside of the statistics, venture capitalists and angel investors are driving the point home with their portfolio companies, issuing dire warnings to conserve capital, amid a climate where finding future pools of funding may be like searching for water in the Sahara.

Information services start-ups raised $501 million during the third quarter–an 11 percent drop over the same time last year. A total of 64 deals were funded during the quarter, compared with 83 last year.

During the third quarter, 270 IT-related deals were completed, a 21 percent drop compared with 342 deals in the same period a year ago, according to the Quarterly U.S. Venture Capital Report. That translated into $2.73 billion in investments, likewise down 21 percent from a year ago.

Within the information services sector, which includes a number of ad-dependent Web 2.0 companies, the level of investments and number of deals fell for the first time in three years, according to the report.

The declines in the IT sector, which accounts for a sizable portion of all U.S.-based venture-backed deals, felt far more pain that the venture industry overall.

Start-ups that tout Internet-based consumer services also took a hit during the quarter, with funding falling 47 percent to $151 million in the quarter, compared with last year. The number of deals also dropped to 20 from 32 a year ago.

During the quarter, venture capital going to U.S.-based start-ups fell 7.2 percent to $7.37 billion in the quarter, compared with a year ago. And the number of venture deals dropped to 583 from 673 during the same time period.

The job cuts also come on the heels of the unveiling last week of LinkedIn’s new developer platform, as well as third-party apps that aid in trip tracking, file sharing, and presentations.

The site, which claims about 30 million members, is small in comparison with social-networking sites Facebook and MySpace. But the average LinkedIn member is 41 years old and earns about $110,000 a year.

Its white-collar focus–billionaire Bill Gates is proud of his profile–means that LinkedIn can attract premium advertisers and charge quite a bit for ads–reportedly $75 per thousand impressions.

The layoffs follow LinkedIn’s announcement last month that it had raised an additional $22.7 million in funding from Goldman Sachs, SAP, McGraw-Hill, and longtime investor Bessemer Venture Partners. That round followed a $53 million series D funding round in June that gave LinkedIn a valuation of $1 billion. The latest round of funding brings the total funds raised to just more than $100 million.

Business-focused social-networking site LinkedIn announced Wednesday that it is cutting 10 percent of its workforce, or about 36 jobs, as part of a restructuring to focus on its revenue-producing businesses.

Company representatives did not immediately respond to requests for comment.

Gmail Labs, which lets people customize their Google e-mail application with a choice of 43 options, has extended beyond the United States.

Gmail Labs is an interesting experiment in a broader context, too. Google, Yahoo, Facebook, and other Web sites invariably encounter resistance when releasing updated versions, but Gmail Labs lets only those who are interested in specific new features try them out. It doesn’t produce the same type of hard data as bucket testing, in which a fraction of the overall users are involuntarily switched to a new site, but it does let Google respond relatively quickly with new features.

The feature is available in 49 languages, according to a blog post by Gmail Engineering Manager Pal Takacsi on Monday. Most Gmail Labs options are translated into all Gmail’s supported languages “except Hebrew, Arabic, and Urdu,” Takacsi said.

Among the more useful Gmail Labs options in my opinion are offline access, undo send, SMS chat, and Flickr and YouTube previews in Gmail messages. Less essential are Old Snakey and Beer Goggles.

Gmail Labs relies on a 2007 overhaul of the Gmail application that introduced a more modular design. With Gmail Labs, Google creates a customized version of the JavaScript application each person’s browser runs to use the service. “We thought there was a chance that everything would just break” when expanding more broadly, Takacsi said.

“The majority of Gmail users are outside the U.S., so it’s no surprise that since we launched Gmail Labs last year, people around the world have been asking for these experimental features in their local languages. As of today, we’re making Gmail Labs available internationally,” Takacsi said. “You may wonder, since most Gmail features are available in almost every supported language immediately at launch, why Labs hasn’t been. The truth is that Labs itself is a bit of an experiment–it came out of people’s 20 percent time, and we weren’t sure if it would really work.”

The U.S. Army has committed to renewing its partnership and providing another $50 million to Arizona State University’s flexible-display research facility, the university announced on Thursday.

The center even started a Flexible Display Center YouTube channel for showing the public its latest prototypes.

A scientist demonstrates a piece of flexible display made with stainless-steel foil.

In addition to the design and development of things like integrated circuits and thin-film transistor (TFT) arrays, the Flexible Display Center has facilities for early-stage prototyping and low-volume production.

The Soldier Flex PDA, which has an integrated flexible display from the Flexible Display Center, was tested by U.S. Army riflemen in 2007.

In addition, flexible displays can be made more durable than regular LCD screens, allowing them to get banged around in combat and still work. They also consume only a fraction of the power of LCDs.

Flexible displays are paper-thin electronic screens that can be bent, mounted onto objects, and sewn into clothing. Soldiers could easily wear them on their sleeves or wrists, and use them to receive critical data in real time in the form of instructions, photos, or maps.

A mock-up of a roll-out electronic map provides just one creative example of how flexible displays might be useful to the U.S. Army.

That brings the Army’s total investment since the Flexible Display Center (FDC) started in 2004 to $100 million.

(Credit:
U.S. Army)

That doesn’t just make them good for the military; it also makes for cool tech products.

That commercial value is something the military, ASU, and its partners clearly have in mind.

The Flexible Display Center’s partnership with ASU and the U.S. Army also extends to the private sector, as well as other universities.

So why is the military so keen on flexible displays?

The announcement comes in conjunction with a two-day event in Tempe, Ariz., near ASU, in which the U.S. Army and Flexible Display Center plan to showcase their progress to the public.

(Credit:
U.S. Army)

It’s all about information and communications…and possibly profit.

One product has already come out of the center. The Soldier Flex PDA, developed by Inhand Electronics, was introduced for military testing in 2007. It’s a rugged glass-free PDA containing a screen developed by the Flexible Display Center.

Those partners include the Center of Advanced Materials and Nanotechnology at Lehigh University, Boeing, E Ink, Hewlett-Packard, LG Display, Raytheon, and Plextronics.

(Credit:
Andricka Thomas, RDECOM (Research Development and Engineering Command, U.S. Army) )

Last.fm is a part of CBS Interactive, which also publishes CNET News.

Screenshot of Yahoo Music's new music directory page.

The move is part of an overhaul of Yahoo’s home page, designed to aggregate content from other sites. The move will make Yahoo much more like the directory it once was before former CEO Terry Semel and others tried to remake the company into a media company.

(Credit:
Stephen Shankland/CNET News)

A music subscription and download service didn’t work out for Yahoo, so the portal is now trying a much safer approach.

I think it was smart for Yahoo to drop its music-subscription service earlier this year. But it’s hard for me to believe that consumers need anyone directing them to music. Even if they did, would anyone look to Yahoo for that?

The new plan for Yahoo Music presents some obvious benefits. Yahoo will no longer compete in a sector packed with competitors. The Web portal also won’t have to pay the considerable licensing fees charged by the four major labels. But the big question is will anybody need to make a stop at Yahoo to get their music?

First off, the vast majority of music fans spend their music dollars at iTunes. When it comes to the growing number of other music stores, many of those offer identical features. There is now a slew of places to download music (iTunes, Amazon, Wal-Mart), and to hear free streaming music (iMeem, iLike, and soon MySpace Music).

Yahoo is planning to be a sort of guide to the Web’s top music services, executives said this week. Yahoo Music users will be able to set up Web pages where they can track content offered by sites such as iTunes, YouTube, Amazon, Last.fm, and Pandora.

(Credit:
Rick Broida)

Stand back! My cheapskate senses are tingling! A new site called Daily Dollar Deals catalogs soon-to-end eBay auctions that have prices below $1. Just pick a category–anything from Antiques to Video Games–and you’ll see a list of all under-a-buck auctions, sorted by time remaining. (You can also drill down into sub-categories to get more targeted listings, and there’s a search option as well.)

Daily Dollar Deals also offers a categorical list of Amazon products based on discount, from 10-90 percent. However, those numbers usually take into account used items as well as new–just something to keep in mind.

Talk about a great way to scoop up bargains! Admittedly, sometimes the stuff that’s selling for a buck isn’t worth much more than that, but there are exceptions. For instance, I found four tickets for tonight’s Pistons vs. Cavaliers game. Cheap seats, sure, but if I can take my whole family to see LeBron for 99 cents? Oh, yeah, I’m there. (But make no mistake: I’ll be rooting for the Pistons.)

For anyone who loves the thrill of scoring dirt-cheap deals, I highly recommend bookmarking Daily Dollar Deals. My only concern is how much time I’ll end up wasting there.

Find more deals, coupon codes, and bargains on CNET’s Shopper.com.

[via AppScout]

At Monday’s Le Web 3 conference in Paris, Netvibes announced the launch of its latest version which adds support for Google’s OpenSocial and Facebook Connect, alongside several new ways to view widgetized content.

Netvibes : Flexible Layout from Netvibes on Vimeo.

Besides the OpenSocial integration, the biggest change users are likely to notice is the selection of new layouts which allow tall widgets to be displayed lengthwise. Users have several choices in preset layouts, and each widget is set up to span accordingly. This is mostly helpful for media rich widgets, which can now properly display 16:9 widescreen video content without having to scale it down to fit. It’s also really great for landscape photos, and long-form written content.

For widgets, this kind of openness is a big deal. Typically widgets are a self-serving piece of Web code that provide a limited container of information. With Netvibes’ system, this information can become more targeted and personalized even before you go in to make initial changes.

Speaking of which, there are new ways to read blog content from widgets, including a new canvas view which loads up the page right inside of Netvibes without jumping you somewhere else. You’re also able to format incoming RSS stories into what looks like a slideshow gallery and a headline ticker which creates a neat, if slightly useless scrolling marquee of incoming stories.

New look

The OpenSocial element may be one of the most interesting aspects, as it’s now paired with Netvibe’s Universal Widget API, allowing developers to create widgets that can pull information from a user’s social network. In the example demoed at the conference, Netvibes showed off a weather widget which displayed the user’s weather, along with that of their friends. The user didn’t have to set up that friends list; it simply came over with their credentials from other social networks. The same back end could be used to make a couch-surfing widget where you get friends’ listings when looking up flights or hotel reservations in a particular city.

You can read about all the updates over at the Netvibes blog. Also, below is a video of what the theme switching looks like:

Glue also taps into existing social networks, such as Facebook and Twitter, to add friends, or to “follow” other people. The Glue Navigator allows users to browse the network of people and things, and what friends have identified as a “like” and what they have to say about objects. Glue can display all the music that a friend has viewed and drill down, offering contextual shortcuts to find out more, such as reviews and shopping links, about things on the Web. Glue remembers only the last 20 last things visited, and the things “liked” or commented upon.

“Glue works as a contextual filter,” said Alex Iskold, founder and CEO of AdaptiveBlue. “We show relevant information from friends about the things they visit. They don’t have to sift through lengthy lifestreams. For example, if you have 100 friends in FriendFeed, you are a human filter trying to sift through it and the information is completely out of context. The idea is to get the useful information ‘chunked’ contextually on the pages you visit. We are not asking people to change their habits.”

The people surfaced in the Glue bar could have seen the object, such as a movie title, on a variety of sites. “People look at movies at different times and places, but the core semantic technology can understand the same thing and correlate it. As a movie fan, you just want to know what your friends think. It doesn’t matter when or where the user visits things; Glue automatically connects them. There is no Glue destination site–the network is the user’s context across the Web,” Iskold said.

Glue impressed investors at RRE Ventures and Union Square Ventures (Series A Lead) enough to fund a $4.5 million series B round recently. The company has a good chance of making it through the meltdown.

Glue allows users to add comments and indicate a "like" or favorite.

Each user has a profile page that shows likes and the number of followers and who the user is following. “It’s a way of cross-pollinating interests. You can see what I am interested in and perhaps it is the same books or wine with which you have an interest,” Iskold said. “Glue also allows you to claim pages that represent you, such as a blog, FriendFeed, or Twitter. It’s an outlet where people know where to find and connect with you. For example, other Glue users could see what you are up to recently on your personal blog.”

Glue allows users in its social network to discover what friends share interests with them without going to a central site.

Rather than just connect things to related data and services, it also connects things to people and people to people and their things. For example, when a Glue user visits a site with things the software recognizes, such as a movie, artist, wine book, restaurant, or stock quote, a bar appears at the top of the screen with a list of friends and other people in the Glue network who looked at that object. Users can leave brief comments to share an opinion with others.

For the last few years AdaptiveBlue has offered a semantically rich Web application that understands things such as books, movies, and music. Clicking on text, such as a company or movie name, brings up a context-sensitive menu of related links. The company is taking its technology a step further, adding a social dimension and renaming the product, “Glue.” Along with Radar Networks’ Twine and Powerset’s Wikipedia search engine (acquired by Microsoft), Glue offers a compelling glimpse into how the Semantic Web will add a new, powerful level of intelligence to the Internet.

He did talk about the new music service launching this month that will partner with the major labels, offer free streaming, and include some original content from its audience of 120 million members. DeWolfe said that MySpace is very focused on making the new service a success, with more than 70 people, including top MySpace management, working on the project. He was asked if Amazon was providing the downloading capabilities, but declined to answer. MySpace has a strong music foundation, and may be able to make some inroads into the Apple/iTunes territory.

Michael Arrington talks with MySpace's Chris DeWolfe at the TechCrunch50 conference in San Francisco.

(Credit:
Dan Farber/CNET)

DeWolfe was fielding a few questions in an interview at the TechCrunch50 event in San Francisco with co-host Mike Arrington, who started off the interrogation by asking DeWolfe if he was dating Paris Hilton. The gentlemanly DeWolfe declined to answer the question.

MySpace plans to integrate Google Gears with its platform, according to the social network’s co-founder Chris DeWolfe. Users will be able to access their profiles offline using the Google Gears APIs, but the feature won’t be available for a few months.

The industry is clearly interested in more government collaboration, the other conference speakers said. Venture capital firms have been closely following the Department of Energy’s entrepreneurs-in-residence (EIR) program, said Victor Hwang, managing partner of T2 Venture Capital.

Block co-authored a report released Monday that urges President-elect Barack Obama to integrate support for innovation in the stimulus package he is expected to sign at the start of his term. At a conference in here Monday, academics and industry representatives pointed out the weaknesses of innovation economy and ways the government could address the systemic problems. The conference was sponsored by the Economic Policy Institute, the Information Technology and Innovation Foundation, the Breakthrough Institute, the University of California Washington Center, and the Ford Foundation.

Established in the fall of 2007, the EIR program funds VC-sponsored entrepreneurs to work in national research labs in order to develop plans to commercialize new clean energy technologies. The first three entrepreneurs were funded with a total of $300,000. On November 19, the Department of Energy announced it is expanding the program to include five more entrepreneurs, funded at $50,000 each.

The significance of government support for innovation research and development is evident in R&D Magazine’s annual “R&D 100 Awards,” which recognize products that skillfully combine research with commerce, Block said. In 2006, 88 domestically produced innovations won recognition from R&D Magazine, and of those, 77 had benefited from public funds. The recognition of government-backed products has increased over the years, Block said.

Block’s paper suggests increased funding for federal innovation, new mechanisms to fund fledgling technology companies, increasing public knowledge about the government’s role in innovation, and creating a cabinet-level Innovation Department. The new department, Block said, would not run innovation programs itself but instead oversee interdepartmental collaboration and the use of best practices, among other things.

“There’s the potential in the moment for these groups to cohere into a political coalition so we just don’t have stimulus but ’stim-novation,’” Block said, coining a term.

“With a very minuscule amount of money you can get the whole industry to pay attention because it’s been waiting for something like this to happen,” Hwang said. “There’s no reason this couldn’t happen on a wider scale at other agencies.”

While some conference attendees suggested that asking for innovation policy reform at the start of the new administration was asking for too much, Block said now is the time to bring together influential constituencies with an interest in innovation policy–labor leaders looking for job creation, environmentalists interested in green technologies, and the business community.

It is difficult for innovators to accommodate inconsistent state-level policies, such as broadband or e-waste policies, said Sun Microsystems Senior Vice President David Douglas. Sun has 10 employees who simply track state laws, he said.

Federal support could be especially helpful for cases of market failure in which fragmented, state-based policies are insufficient, the panelists said. In today’s global economy, entrepreneurs need to be able to find business partners outside their own geographic region, Hwang said, but the free market does not provide a wide enough social network for that. Even state agencies will rarely look outside of their own constituencies, he said.

(Credit:
Stephanie Condon/ CNET News)

WASHINGTON–Trends indicate that more and more commercially successful innovations are backed by federal dollars, a researcher said Monday, and politicians should do even more–even create a cabinet-level Innovation Department–to support the innovation economy if they want to kick-start the wider national economy.

UC Davis professor Fred Block on Monday gave his innovation policy recommendations for the incoming administration.

“We need economic policies that pull us out of the recession but are oriented towards innovation,” said Fred Block, a sociology professor from the University of California at Davis. “What we have to do as a country is figure out how to walk and chew gum at the same time.”