In February a well backed startup called YouNoodle said that they were developing a product that would accurately predict the future success of startups based on an analysis of the business and the founding team. Much like a credit rating tells creditors how likely an entity is to pay off debt, YouNoodle aimed to tell investors how likely they would be to see a return on their investment, and would even go so far as to estimate the exact valuation of a startup a few years into the future.

We were skeptical, to say the least. Particularly because the product was being announced while still in development.

Now YouNoodle is preparing to launch the predictor tool (sign up to be notified here). CEO Bob Goodson let me test the service out last week and shared some of the early results with me.

I’m still skeptical, but I love the valuation prediction for TechCrunch ($87.4 million), and I have to admit that some of the predictions are within a stones throw of accurate. And if people can be convinced that this is a useful way of understanding if a startup team has a chance of succeeding, it could become part of Silicon Valley culture.

The Prediction Tool

YouNoodle collects a lot of data on startups to make the prediction - the questionnaire takes a good half hour to properly complete. YouNoodle aims to make the prediction right before the first round of funding for a company. So one way to test it is to enter information about a more mature startup that was true prior to funding, and see how well it predicts the actual results.

The key factors in determining likelihood of success, says Goodson, are the team, financial factors, the concept and advisors. Details on the education, entrepreneurial experience and other information founder and key employee. The tool wants to know everything. For the founders, their age, education, previous startups (and how they did), and their long term relationship to the other founders. For the concept, YouNoodle gathers information on the business idea (probably extracting keywords for analysis), where it’s located, and lots of other data.

YouNoodle then churns all that data and assigns the company an index score from 1-1000 as well as a valuation estimate three years down the road. YouNoodle has tested and fine tuned their algorithm with 3,000 startups, Goodson says, and the results are “highly statistically accurate.”

As I said, TechCrunch’s valuation prediction based on 2005 information is just over $87 million. I won’t comment on that (woohoo!), but here are some other predictions, all made with data on the startups that was true prior to any funding:

Slide: $124 million (actual: $550m)
RockYou: $71 million (actual: $250m)
Mahalo: $118 million
Powerset: $104 million (actual: $100m)
Cuil: $95 million
Twitter: $110 million
Friendfeed: $86 million

Given that the information used to make the predictions was limited to that available prior to any funding of these companies, the data is both interesting and accurate enough to be useful. Slide and RockYou, for example, aren’t accurate, but the algorithm did predict success and it also got the relative valuations almost perfectly correct. Powerset was accurately predicted, and we’ll have to wait and see how Cuil and Mahalo do. Twitter’s valuation is probably close to accurate.

More examples: YouNoodle predicted that Google would be worth just $88 million three years after it was founded, which is lower than their private valuation at the time but now way off. Facebook’s valuation was predicted at $111 million, which is way off of its actual valuation. But the key is that YouNoodle would have predicted huge successes for all of these companies based on the exceptional teams put in place at the very early stages.

The average three year predicted valuation for student startups from top ten universities is about $360,000.

So the big question is, how does YouNoodle predict it will do based on its own algorithm? Goodson says it thinks YouNoodle will be worth $96 million in 2010.

How YouNoodle May Be Used

Goodson says he will provide the prediction algorithm for free to startups, even giving them a “certificate” showing their index score and predicted valuation (the one for TechCrunch is the top image above). If third parties want official access to the certificate they’ll be asked to pay (just as creditors are asked to pay for official credit reports). For now the service is being provided completely for free.

While the algorithm seems to do a good job of identifying teams with a high likelihood of success, it’s not clear to me that it does a better job than an experienced VC would be able to do on their own. YouNoodle is also basing predictions on historical data, and in a rapidly changing world that is consistently disrupted by new technologies, those predictions are very hard to make. Humans who are on top of recent developments can make subjective decisions that are far more likely to be accurate than an algorithm.

But YouNoodle is also dispassionate, and can therefore make decisions outside of the emotional world of startup investing. Venture capitalists are, despite their appearance, fairly risk averse people. If YouNoodle backs up their instinctive reaction to a startup they may be more likely to invest. And they may also walk away from an investment they like if YouNoodle says it’s destined to fail.

At the very least YouNoodle is going to add a fascinating layer to the conversation. The company has raised one round of financing (they aren’t disclosing the amount raised) from Max Levchin, Peter Thiel and The Founders Fund. In addition to Goodson, key employees include Kirill Makharinsky and Rebeca Hwang.

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In preparation for the start of the summer Olympics on August 8, Yahoo has added Olympic-themed Shortcuts to its search results. Yahoo Shortcuts serve up contextually relevant content from various Yahoo properties inline within the search results. Now, whenever somebody searches for Olympic results, news, or athletes, different Shortcut widgets will pop up.

A search for “Olympics medal count,” for instance, will generate the table above, which comes from Yahoo Sports. A search for “Olympics medal China” will bring up only that country’s medal count.

Searching for an athlete’s name, like swimmer “Michael Phelps,” will bring up a picture, news stories about him from Yahoo News, and stats as well.

With Shortcuts like these, Yahoo is blurring the line between search results and content by offering up key pieces of data right on the main search page. And if you click off for a deeper dive, you end up going to other Yahoo properties. Exposing Yahoo content within search results is designed to help drive more traffic back to Yahoo—which is all right, as long as it’s useful. Sometimes Yahoo’s Shortcuts can serve up inappropriate results as well (but it is probably being extra careful with these to avoid any embarrassment).

Update: Google is doing the same thing with OneBox results for Olympic-related searches.

Update 2: The Michael Phelps Shortcut image above is what you currently get if you search for his name. Once the Olympics start, athlete names will turn up a shortcut that looks like this:

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CG’s Peter Ha writes:

Vudu announced late last night that they would begin offering adult content in conjunction with AVN. Titles from various studios like Vivid, Wicked and Hustler among many others will flood your set top box in HD (on some titles). The way it’s set up is so pervy and yet fantastic. You can find titles based on your favorite ‘performer’ or sort through studios and genres.

We at CrunchGear are all in agreement, however, that we do not wish to watch Ron Jeremy, shown here, in HD. We also wish to state, for the record, that this service gives new meaning to the concept of “streaming.”

Read more…

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When Phil Schiller, Apple’s senior VP of Worldwide Product Marketing, introduced MobileMe onstage at the WWDC keynote in June, the audience was wowed into believing that the most stylish hardware and software company had transformed itself into a formidable Internet service provider right before its eyes.

MobileMe not only promised to be exceedingly functional - an “Exchange for the rest of us” that would synchronize our emails, contacts, calendar appointments and photos across devices using push technology - it was also exceedingly beautiful. By applying its legendary design expertise to the SproutCore JavaScript framework, Apple had created a browser-based hub that not only empowered consumers with device flexibility; it also raised the notion that Apple would become a major player in cloud computing, even if MobileMe was technically only an upgrade to the six-year-old .Mac service.

But alas, the transformation has proven itself to be more of a slog than Apple had hoped. After a false start, persistent outages, and all-around bugginess, Steve Jobs has admitted to employees in an internal email that “it was a mistake to launch MobileMe at the same time as iPhone 3G, iPhone 2.0 software and the App Store,” and “the MobileMe launch clearly demonstrates that we have more to learn about Internet services”. This is an atypical admission by a company known for its well-maintained image of impeccability. It also raises the question of whether Apple will be able to metamorphize as services and software move online around it.

Apple is certainly not without its previous Internet successes, namely the iTunes Store with its paid music and movie downloads. The store’s success appears to be why Eddy Cue, Apple’s VP of iTunes, has been put in charge of all Apple Internet services following the MobileMe mess. But it has yet to be seen whether Cue can translate his experience deploying an Web-connected desktop app within a proprietary framework (iTunes) into a more distributed, browser-based platform that competes with the likes of Live Mesh and SugarSync. And then there is the question of whether Google will ever add desktop syncing to its webtop services, competing even more directly with the MobileMe offering.

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It’s the dawning of a new age, folks. In-flight Wi-Fi is slowly rolling out across domestic airlines in the US and Delta is looking to capitalize on it by outfitting their entire domestic fleet of aircrafts with Aircell’s GoGo service.

American Airlines and Virgin America have been on-board for some time (though they have yet to launch the service) and this is pretty big news coming from an airline that’s been struggling lately. Having filed for bankruptcy on more than one occasion in recent years, Delta is positioning itself to get back on top of the domestic heap.

In April they announced a merger with Northwest Airlines that would make them the largest domestic carrier in the country and the addition of in-flight Wi-Fi makes them even more enticing for would be travelers.

The first half of 2009 will see 133 of Delta’s MD88/90 airplanes equipped with the service with another 200 Boeing 737, 757 and 767-300s to follow suit. Delta hopes to have more than 330 airplanes equipped to provide the Wi-Fi service by the end of 2009 making it the only major US airline to offer the service across its entire domestic fleet.

GoGo will cost Delta flyers $9.95 on flights of three hours or less, and $12.95 for flights that are longer than three hours.

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Twitter spam just took a new twist. In addition to all the regular marketing spam on Twitter (which the service is has tried to combat with its own blacklist), now there is something even more malicious: a computer attack disguised as spam.

Computer security company Kaspersky Lab has found a Twitter profile that ostensibly looks like it is promoting pornographic downloads. But when you download the “Adobe Flash” player necessary to watch the video, it installs a Trojan Horse piece of software that can take over your computer. Kaspersky suspects Brazilian hackers. The name of the profile means “pretty rabbit” in Portuguese.

From the screen shot, it doesn’t look like the Twitter account only has one follower. The hackers are more likely using the Twitter page as a link that won’t draw as much scrutiny as a standalone Website. And you thought everyone on Twitter was nice.

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Rocketboom, the daily video blog, is turning over its distribution and ad sales to Sony Pictures Television in return for a seven-figure guarantee plus a share of revenues. Rocketboom will be distributed on Sony’s Crackle video site, as well as across other Sony platforms such as the PS3, PSP, and Bravia I-Link TVs.

Rocketboom founder Andrew Baron says he went with Sony because of Sony’s distribution strengths and the deal allows him to maintain control of the business. (Whereas selling the business to another media buyer, such as WallStrip did to CBS a year ago for $5 million, would have required him to give up his baby). The deal is structured as a distribution and advertising deal, and sounds like it could lead to a closer relationship or outright sale if things go well. But if they don’t, Rocketboom would regain complete control of distribution and ad sales after the contract expires.

Rocketboom’s current distribution through YouTube, iTunes, Tivo, and elsewhere will remain intact. Sony will sell ads across those distribution channels as well. Baron claims more than Rocketboom is watched more than one million times a month across all channels, and sometimes spike to several million views. But as one of the first Web video shows, Rocketboom has always been better at creating videos than at selling ads.

By aligning with a major media company, Rocketboom will be able to expand its reach and Baron will be able to take some money off the table. But Rocketboom will now be seen as a Sony property for all intents and purposes. That is not necessarily a bad thing. For instance, Crackle is finally starting to see some growth after going nowhere for a long time. Since April, according to comScore, unique U.S. visitors to Crackle.com has tripled to 3.7 million (compared to 4.5 million U.S. visitors to Veoh.com).

The deal does raise the question, though, of whether Web video startups can thrive as independent entities or require the distribution muscle of a major media company to go mainstream.

Update: In a blog post about the deal, Andrew Baron explains that one reason he went with Sony is that previous ad partnerships with smaller companies didn’t work:

We tried start-up ad companies like Federated Media and blip.tv and refused to go exclusive with anyone for a long term without some kind of guarantee. And no one was ready because no one could sell out our inventory across all of our platforms (e.g. our own video formats plus videos on You-Tube and TiVo, etc.). It tends to require managing multiple accounts and methods and no one has been able to handle selling ads across all of our platforms except us.

He also blames a lawsuit with former Rocketboom anchor Amanda Congdon for tying up the company for two years. While other Web video startups, such as Revison3 and Next New Networks, raised tens of millions of dollars, Rocketboom was “frozen like ice” by the courts.

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Flypaper Studio, a startup that allows users to create flash-based web presentations without any programming experience, has closed a $3.5 million round of funding. The round was led by Sierra Ventures and SCF Arizona, and brings the company’s total funding to around $6.5 million.

Flypaper behaves like a mix between Microsoft’s PowerPoint and Adobe Flash. Using a simple drag-and-drop interface, users can create interactive Flash-based presentations that are typically more engaging than standard PowerPoint slides. The company also offers a paid version that allows companies to monitor which users are watching the presentations and how they are interacting with them. The company plans to use the funding to expand on these professional offerings and to enhance its marketing campaign.

Given the ubiquity of Flash, it’s no surprise that startups are trying to offer an alternative to the sluggishness and annoying compatibility issues associated with PowerPoint presentations. There are a number of other companies trying to bring presentations to Flash, including Empressr and SlideRocket.

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We’ve never been big fans of ChaCha, the human powered search engine that pairs you up with a “guide” who attempts to answer your questions in real time. The search model was obviously unscalable from the outset, but ChaCha’s botched implementation hasn’t helped much. When it first launched, ChaCha allowed users to initiate full on chat sessions with their guides, which predictably led to a flood of pranksters who overwhelmed the service.

After a year of trying to make the ridiculously flawed system work, the company abandoned the chat sessions in favor of one-off question and answers, primarily targeting users through a mobile service.

Despite its glaring issues, ChaCha has managed to ring up $16 million in funding, which is probably why it has survived this long. And to the company’s credit, it has amassed a following of loyal “guides” - the people who do the heavy lifting and find the search results for visitors to ChaCha.

Many of these guides are only interested in making a quick buck, which is why there are so many laughably bad search results. But for some, ChaCha is an extension of the workday, offering some relatively easy money to help supplement their incomes. And now ChaCha is going to screw them.

Yesterday ChaCha sent out a message to its guides explaining that it was introducing a “Pay-For-Performance” system that was designed to improve search quality - not a bad idea, given the shoddy results we’ve seen before. Unfortunately, it seems that ChaCha has blundered this plan too.

Under the new program, “Top Guides” will receive 20 cents per question, which has been the standard rate for experienced guides for some time. Everyone else gets 10 cents per question - half of what they would have gotten under the old system. To become a Top Guide, users must do the following:

* >95% Quality Measurement.
* 95% and above completion of answers to questions:
* Minimum 300 Searches a week.

That’s a lot of searches, given the fact that most experienced users average around one search per minute. In effect, ChaCha is forcing users to work five or more hours per week if they want the higher payrate - something that will totally alienate the site’s more casual (but accurate) users. What’s worse, there’s currently no way to readily see your accuracy score, so users are forced to trust ChaCha’s word.

Users are up in arms on the site’s private forum (you can see some of the complaints here), with many planning to abandon ChaCha entirely. It’s clear that ChaCha is trying to trim their workforce down to a small army of accurate and hardworking searchers, but enraging its entire community only seems to solidify its place in the Deadpool.

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Dan Ackerman Greenberg is a master at getting lots of views for online videos. Last year he wrote a less-than-well-received post here on TechCrunch called “The Secret Strategies Behind Many “Viral” Videos.”

In the face of hundreds of negative comments he wrote a follow up post where he clarified some of his original points - “We do NOT spam email lists…We do NOT pay off bloggers,” etc.

Well, whatever it is he does do must be pretty interesting, because his new company, 750 Industries, cofounded with Brett Keintz, landed a $1 million round of financing from Ron Conway, Maples Investments and Baseline Ventures. The company, which is located in Yelp’s old offices on Montgomery and Mission in San Francisco was founded six months ago and has seven employees.

Greenberg and Keintz were pretty open when talking about the funding this evening, but won’t say anything about the startup, which remains in closed beta. A bio for Keintz from April describes the company as “a startup providing viral media distribution solutions that gives content owners and advertisers quick and effective access to millions of consumers,” though, and they say the company is already “very profitable.”

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