Photograph by Ramin Talaie/Bloomberg

Elon Musk, chief executive officer of Space Exploration Technologies (SpaceX) and Tesla Motors.

(Updates Tesla’s year-to-date stock price change in lead and Musk’s estimated net worth in 10th paragraph.)

Tesla Motors is on a pretty good run this year with the stock up 105 percent and a first-ever quarterly profit posted yesterday. That’s led many investors to wonder whether acquirers might come knocking soon.

“That’s one of the possible outcomes, I suppose,” Elon Musk, Tesla’s chief executive officer, said in an interview. There have been “occasional discussions” with companies, though Musk declined to identify which ones.

Musk is what some in Silicon Valley might call a serial entrepreneur. He sold PayPal to EBay in 2002 for $1.5 billion, which made him a multimillionaire. In addition to his Tesla duties, he’s also the chairman of SolarCity and the CEO of Space Exploration, the Hawthorne, California-based rocket maker known as SpaceX where we conducted our interview last week.

While Musk said an acquisition isn’t expected to happen soon, he was willing to spitball some hypotheticals with an editor and me. What about another car company? Daimler and Toyota Motor are already Tesla investors.

“From the perspective of a large [automaker], Tesla just seems very expensive,” Musk said. “How many cars do we make? What’s our market cap? It seems nutty to them.”

OK, how about Apple?

“They do have a lot of cash,” Musk said coyly. “I’d guess it would come from outside the auto industry. It would be a buyer with a very large cash position.”

Musk won’t be able to sell Tesla until the company repays its debt to the U.S. Energy Department, which it expects to complete by December 2017. Rather than seeking a sale, Musk’s priorities for Tesla over the next few years are to increase sales of Model S sedans, start mass production of the Model X and bring out an electric car priced close to $30,000 that most families could afford.

“I’ve said from the very beginning, from the creation of Tesla, that our goal is to create a compelling mass-market car,” Musk said. “I would not consider stepping away from Tesla until we’re there. We’re several years away, obviously.”

Musk is worth $4.5 billion, according to the Bloomberg Billionaires Index, and has been building cred on Wall Street and in Silicon Valley. He told me his company has been talking with Google about teaming up on driverless cars. Investors seem to believe that Musk is the person to accomplish the company’s lofty goals — despite the occasional gaffe on Twitter or baffling declaration of war with the New York Times.

“Every now and then I sort of stick my foot in my mouth,” Musk said. “Given some of my crazy tweets, I’m not sure you could tell if my account was hacked or not.”

Original post is Elon Musk on Tesla Merger Prospects: Apple Has ‘a Lot of Cash’ by Tech Deals.

That’s according to a March 5 report from Carlos Kirjner, an analyst at Sanford C. Bernstein. Kirjner estimates that AWS is worth $24 billion, or $52 per Amazon share, on a standalone basis, after generating $1.8 billion in sales last year. Based on Kirjner’s research, AWS accounts for 19 percent of Amazon’s value even though it made up just 2.9 percent of 2012 revenue. Amazon doesn’t break out AWS’s financials, leaving analysts to their own devices. Macquarie Securities wrote in January that sales last year reached $2.1 billion and will climb to $3.8 billion in 2013.

As highlighted in a Bloomberg Businessweek story this week, AWS is staying ahead of competitors such as Google and Microsoft with offerings like Spot Instances that dramatically bring down the price of computing capacity.

“We believe Amazon will continue to cut AWS prices to pass along technology-driven efficiency gains to its customers,” Kirjner wrote.

The business is just getting going. Kirjner predicts that AWS revenue will top $10 billion in 2016 and double that in 2020. Those kinds of projections are spawning an ecosystem, with startups emerging to sell services on top of AWS. One such example is Newvem, an Israeli company that provides analytics to AWS customers, helping them maximize their utilization and manage governance and risk issues involved with operating in the cloud.

Zev Laderman, a former Oracle executive and veteran of tech startups, founded Newvem in 2010 to take advantage of the shift to the cloud. Backed by $4 million from investors including Greylock Partners and Index Ventures, Newvem is now providing data services to companies spending anywhere from $2,000 to $2 million a month on AWS. Eventually, Laderman expects to do the same for customers of Google. And he’ll know when the time is right, because Eric Schmidt, chairman of the search giant, is one of his investors.

“We started with AWS because they’re the king of the block,” Laderman said. “The real vendor that can give Amazon a run for their money is Google.”

Original post is What If Amazon Web Services Were a Standalone Business? It’d Be Big by Tech Deals.

Courtesy Lumo

The LUMO BodyTech wearable sensor to track posture.

Yahoo! co-founder Jerry Yang and Google Chairman Eric Schmidt may not agree on much, but they do see eye to eye on back pain.

Yang and Schmidt, through his investment fund Innovation Endeavors, are joining with Seattle venture capital firm Madrona Venture Group and others to kick in $5 million for LUMO BodyTech, a Silicon Valley startup that makes a wearable sensor to track posture.

The LUMOback device monitors a user’s back posture and transmits that information via Bluetooth to a smartphone application. The sensor, developed by three Stanford University graduates, is worn around the waist and gently vibrates to alert users when they slouch.

This summer, Monisha Perkash, the Palo Alto, California-based company’s co-founder and chief executive officer, raised more than twice her target of $100,000 using the crowdfunding website Kickstarter. Early versions of the device are being shipped now to Kickstarter backers, and the company plans to offer it in stores early next year.

Madrona said this is the first foray into consumer hardware for the firm, which led the funding round. Madrona was an early investor in Amazon.com and storage firm Isilon, an EMC acquisition.

LUMObody Tech is the latest to enter the movement toward using wearable sensors and data-analysis software to help improve people’s health and fitness. The area is already populated by the Fitbit and Nike’s FuelBand, as well as devices that monitor sleep.

At this rate, early-adopters may run out of spots on their bodies to attach all of the sensors. But Yang and Schmidt, who competed fiercely for years on search engines, have both decided there’s room for at least one more.

Original post is Eric Schmidt, Jerry Yang Back Posture Gadget in $5M Round by Tech Deals.

Photograph by Stefan Thomas/EPA

Google is trying to sniff out reporters to participate in its journalism fellowship program.

In discussions of the newspaper industry’s seemingly inevitable collapse, Google is probably most often cited as the reason why many people stopped paying for news. As the argument goes, why pay when you can find the information you need through a simple  search?

It’s a straightforward thesis that nonetheless glosses over any number of other forces that have chipped away at newspapers’ profits: Craigslist; the economy; advertiser confidence; oh, and, yeah, giving away the content for free.

While Google remains sensitive to those claims (as they have every right to be), recently the Internet giant tacitly acknowledged the profound effect it’s had on newspapers by unveiling a journalism fellowship. Yes, journalism. Google will pay, albeit a modest sum, for eight journalism students to learn about data-driven reporting starting in June.

“As a company dedicated to making the world’s information easily accessible, Google recognizes that behind many blue links is a journalist and that quality journalism is a key ingredient of a vibrant and functioning society,” the company said in its announcement about the fellowship.

Not only because of its reference to the blue-coded links that once colored an early era of the commercial Internet, the statement about the value of journalism feels like a delayed reaction. Had we heard this in the late 1990s, those words might have quelled concerns from more than a few nervous editors and media owners at the time.

Still, money is money, even if it is just a $7,500 stipend plus $1,000 in travel for a 10-week program. It starts at the Knight Foundation and ends with a week at Google’s headquarters in Mountain View, California, where fellows will spend part of that week with the algo-heads at Google News and the rest of that time at YouTube.

To be eligible, applicants have to be enrolled in a university program and be a U.S. citizen. Deadline is Jan. 31, 2013. Go rake some muck.

Original post is Google to Fund — Wait for It — Journalism Fellowships by Tech Deals.

Courtesy Hover

A startup called Hover can create detailed 3-D maps of city streets using aerial imagery and crowd-sourced photos.

Of all the things Apple unveiled at its annual developers conference this summer, the Flyover feature of its Maps application, where users zip around a three-dimensional city skyline, elicited maybe the most applause. But what if you could actually fly through the city at street level?

Hover, a startup based in Los Altos, California, just eight miles from Apple’s headquarters, is developing just that kind of virtual jetpack for exploring a digital map. The company sells software to government agencies, but may start offering mobile apps to consumers in the next couple years.

The 20-person company closed a $3.1 million round of financing in October, which was not previously disclosed, according to executives. Investors include Almaz Capital, De Anda Capital and McKenna Management.

The 3-D aerial views deployed by Apple and Google are a nice parlor trick, but they aren’t all that practical for navigating a town, said Kevin Reilley, who joined Hover as chief executive officer last month. “While that aerial imagery is great for some things, it doesn’t represent the way that people interact with the world.”

As the two largest smartphone software makers, along with a Nokia-Microsoft tag team, fight for users, digital mapping is a key battleground. For the Apple and Google features, the companies paid to have spy planes flown over cities capturing footage, according to a Congressman’s letter.

Hover’s costs are relatively inexpensive, said Geoffrey Baehr, a parter at investor Almaz Capital. The company can create 3-D street-level maps from flat overhead imagery, and refine them using crowd-sourced photos, he said.

“The accuracy depends on the cleverness of the algorithms, and is independent of the particular sensors that we use,” Baehr said in an interview. “3-D mapping technology that requires you to fly special cameras or special airplanes or to use specialized secret sauce that no one else knows about? That’s a nonstarter.”

Hover currently sells its software to the U.S. government and plans to find corporate customers next year. It will start by mapping areas based on customers’ needs — for example, a military base or a utility company’s power grid — rather than trying to cover the entire world, Reilley said. The startup expects to offer a product directly to consumers as soon as 2014, he said.

Hover was founded last year by a U.S. NAVY Seal and a Marine, who helped broker the deals with the Defense Department, Reilley said. A year ago, the startup brought on Ed Lu, who had worked on mapping projects at Google including Street View. Before that, he was an astronaut at the National Aeronautics and Space Administration, having spent 206 days in space.

As Reilley described the smartphone’s ability to crunch the data needed to lay out vast cityscapes, he consulted Lu on a technical question. “Ed, you probably know. The processing power in these phones is probably the same as the machines that put us on the moon in the 60s.”

Lu chuckled. “It’s a lot more than that.”

Original post is Seen Flyover in Apple Maps? Startup Raises $3.1M for ‘Flythrough’ Tool by Tech Deals.

Photograph by Oded Balilty/AP Photo

Babylon, an Israeli company that makes translation software, plans to go public.

Babylon, which makes language-translation software, filed for an initial public offering in the U.S. that could raise $115 million for the Israeli company. Revenue is up, thanks mostly to Google.

Babylon, based in Or Yehuda, Israel, offers a search toolbar for Web browsers that taps into data licensed from Google. The company takes a cut from ads that users click on, Bloomberg News reported. Last year, Babylon received the Guinness World Record for “most downloaded language translation software” with some 105 million downloads. (Yes, there’s an award for that.)

Google accounted for more than 80 percent of Babylon’s revenue in 2011, according to the IPO filing. If that agreement falls apart, investors may be saying, “No gracias.”

Original post is How Do You Say ‘Google Dependent’ in Hebrew? by Tech Deals.

Courtesy of Udacity

More than 753,000 students worldwide have signed up for Udacity since January.

Udacity, the digital university co-founded by artificial intelligence and robotics pioneer Sebastian Thrun, has raised $15 million, joining a crop of online education startups to attract venture capital this year.

The financing was led by Andreessen Horowitz and included existing investors Charles River Ventures and Steve Blank, the startup guru who teaches at Stanford University. Udacity, based in Palo Alto, California, has raised $21.1 million in the past year.

Thrun, who invented Google’s self-driving car and is a professor at Stanford, started Udacity last year to offer free courses in computer science, math and sciences. More than 753,000 students worldwide have signed up since January.

Peter Levine, a partner at Andreessen Horowitz in Menlo Park, California, and lecturer at Stanford’s business school, said Udacity is designed to serve the masses of people who can’t afford the tens of thousands of dollars a year required for a university education in the U.S.

“Around the world there’s a supply and demand problem,” said Levine, who’s joining Udacity’s board. “This makes Stanford-quality content and coursework available to millions of people who don’t have access to any higher level of education.”

Bloomberg LP, the parent of Bloomberg News, is an investor in Andreessen Horowitz.

Venture capitalists are flocking to education startups after avoiding the market for decades because of the regulatory restrictions and challenges selling to colleges and school districts.

Coursera, started by two Stanford computer science professors, said it raised $16 million in April from New Enterprise Associates and Kleiner Perkins Caufield & Byers. That month, 2U (formerly 2tor) announced a $26 million financing to bolster its services for offering degrees online. Codecademy, a site that teaches basic programming skills, said it raised $10 million in June from firms including Index Ventures and Kleiner Perkins.

Venture investing in education technology rose to $463.1 million through the first three quarters of this year from $457.2 million in all of 2011, according to the National Venture Capital Association.

With more than 2.4 billion Internet users across the globe and over 1 billion smartphones in use, investors are betting that money-making opportunities will emerge. Over the course of the next decade, the college system is going to have to adapt to these new learning opportunities, said Scott Sandell, a partner at New Enterprise Associates and Coursera board member.

“It’s an incredible productivity enhancement and that has to create economic pressures in higher education broadly defined,” he said. That doesn’t mean Stanford and other top universities will go out of business, just that they’ll have to “reinvent themselves a little bit,” he said.

Udacity plans to generate revenue from employers using the system to seek out talent and by providing certification in specialized areas. The company also offers courses sponsored by corporations looking to teach high-tech skills.

While Udacity is working on its business model, Thrun said his primary focus remains changing the way content is taught to make it more enjoyable. That includes interactive lessons that allow students to work at their own pace and engage with the thousands of other people taking the same course.

“Our aspiration is to make learning as much fun and engaging as a video game, so people get addicted to learning,” he said.

Original post is Udacity Raises $15 Million as Money Pours into Online Education by Tech Deals.

Photograph by PM Images

Developers of software for helping marketers setup social networking campaigns were hot acquisition targets this summer.

Between May and July, life was good for companies developing social-media tools for marketers. Acquisitions during that time valued three companies in the industry at more than $1 billion combined.

First, Oracle acquired Vitrue in a deal valued at $300 million, according to TechCrunch. The in June, Salesforce.com said it was buying Buddy Media for $689 million. The next month, Google acquired Wildfire for about $250 million plus performance incentives.

The frenzy appears to be over, but Wendell Lansford, the chief executive officer of Offerpop, is prepping the company he co-founded to be the top contender in the industry’s next round. But will any more big spenders come knocking again?

“It’s the right time for companies to have very successful exits,” Lansford said in an interview at the New York office where most of the company’s 50 employees work. He declined to say whether Offerpop is looking to be acquired.

The two-year-old company recently raised $3.2 million, adding to the $3.8 million from previous rounds. Investors include Windcrest Partners, Acquia CEO Thomas Erickson and GoodData founder Roman Stanek, Lansford said.

Offerpop plans to use the funds it raised to hire employees and introduce its own marketing campaigns to promote upcoming tools, Lansford said. At the same time, the company is brainstorming features for tapping fast-growing social networks, such as Instagram and Pinterest, that Lansford expects his bigger rivals will be slow to adopt under their new masters.

“They kind of looked at the obvious things you might want to do with a business on Facebook,” Lansford said. “We have a lot of ideas about what to do next.”

The market for services targeting social-media marketers has taken off alongside large companies’ rapid adoption of Facebook and other networks as vehicles for reaching consumers. Of the Fortune 500 companies, 66 percent maintain pages on Facebook, according to a study by the University of Massachusetts Dartmouth. It’s no wonder why three of the most successful companies in the new marketing industry were acquired recently. Some independent rivals still remain, such as One Public and Syncapse.

Offerpop is developing services designed to allow its corporate users, including American Express, Wal-Mart Stores and Walt Disney, to go deeper when analyzing their online fan bases, Lansford said. The tools, which are still in development and will be made available to all customers next month, includes organizing campaigns by segments, and detailed profiles for each person that interacts with a user’s Facebook page.

Original post is How Long Will This $1 Billion Industry Last? by Tech Deals.

By using Upstart, graduates in just about any field can raise capital for their business in exchange for giving up a small share of their income over 10 years. The idea is to give graduates a real shot at starting a company and not just take a traditional job to pay off student loans.

“I think it can be giant, ” said Dave Girouard, the founder of Upstart and former vice president of apps at Google. “It’s a whole new form of risk capital.”

With Upstart, a student creates a profile that includes achievements and goals. The student then chooses the funding amount, and Upstart calculates the percent of income the student will have to share during repayment. There is no repayment in years when income is less than $30,000. Backers can commit funds in increments of $1,000. Mentoring and support are also provided.

The company will make its platform available to students and recent graduates in September at Arizona State University, Dartmouth College, Rhode Island School of Design, University of Michigan and University of Washington.

College graduates just need some help to get on the path to becoming a business owner, Girouard said.

“They want to kind of do their own thing but most of our economy is not geared to help that,” he said.

Upstart itself has an impressive lineup of backers. They include Kleiner Perkins Caufield & Byers, New Enterprise Associates, First Round Capital, Crunchfund and Mark Cuban, owner of the Dallas Mavericks.

Original post is Upstart Aims to Crowdfund Entrepreneurial College Grads by Tech Deals.

Photograph by Romeo Gacad/AFP/Getty Images

Indonesian staff wear 'Angry Birds' masks to promote the Angry Birds official Facebook launch at a mall in Jakarta in February.

Felicis Ventures, the “super angel” fund founded by early-Google employee Aydin Senkut, has closed a $70 million round of funding that will be used to invest in technology startups including those in the mobile, health and education industries.

In the same week that prominent investor Paul Graham warned startups with little or no sales that it may be more difficult to raise money following Facebook’s IPO, Senkut said he plans to use the funding to back companies with meaningful sources of revenue and the potential for large initial public offerings or acquisitions.

“You are going to see investors looking for more substance,” Senkut said in an interview. He said that of the top quarter of Felicis’s portfolio, annualized revenues are more than $800 million combined.

The Palo Alto, California-based firm has already scored wins with Mint, a personal finance site acquired by Intuit for $170 million in 2009, and mobile gifting app Karma, which was purchased by Facebook for more than $80 million last month. The firm’s biggest payday could be around the corner: Rovio, the maker of Angry Birds, may be eyeing an IPO in 2013.  Felicis invested in the company last year.

Senkut, who held various roles at Google from 1999 to 2005, has become synonymous with a class of venture investors known as “super angels,” who put more money than the average “angel” into early stage startups. He now wants to shed that title and graduate to what he calls a “boutique fund” — one that offers more hands-on expertise to its portfolio companies, he said.

Felicis helped Rovio set up an e-commerce store for plush Angry Birds dolls in late 2010, Senkut said, and plans to help more startups with strategic needs like this.

Original post is Felicis Ventures Raises $70 Million to Find and Fund Next ‘Angry Birds’ by Tech Deals.