All Things Digital

Today, we debut our new redesign of the home screen of AllThingsD.com.

It is, in fact, our second redesign since we launched the site in late April of 2007, although it is a much more drastic redesign, with a lot more elements added.

Why did we do it? No, we are not hyperactive (OK, we are, but we are taking medication for that).

Actually, it is because we in the ATD brain trust (that would be Walt Mossberg and me), along with our many much-more-intelligent staffers and advisers, wanted to bring even more digital news and analysis to our readers by making more stories available on the front page from us and also from around the Web.

Our aim was simple: Now newsier than ever!

In fact, we hope you will find our new look linktastic, as we try hard to embrace the notion that ATD’s audience wants to be able to find great tech and media stories anywhere and everywhere.

Just fyi, the inside sections remain exactly the same–it is only the front page that has undergone the renovation.

Here’s a quick tour, from the top to the bottom of the page:

Megablog: We combined the BoomTown and John Paczkowski’s Digital Daily blogs in one rolling one in the center rail.

We felt that it allowed us to feature a lot more of our stories on the main page longer, up to 20 typically, and also made it easier for readers to find stories before they dropped off the front.

We will be adding more material to this section soon, as we develop our content further.

Walt Mossberg: Walt’s weekly Personal Technology and Mailbox columns and Mossblog, as well as Katherine Boehret’s Mossberg Solution, move up and to the right in a high-profile spot.

As ever, Walt is the site’s amazing anchor and a tech consumer’s greatest adviser, telling it like it is and writing reviews that matter.

Tech Headlines: On the top left, we wanted to bring in the stellar work from our Dow Jones brethren at The Wall Street Journal, Barron’s and MarketWatch, as well as from the Dow Jones newswires, to give readers links to as many stories as we can as news breaks.

This section will be updated every nine minutes to keep it fresh and new.

Voices: This section on the left remains the same, except it goes vertical. We try to hand-select (no stinkin’ algorithm for us) from across the digital blogosphere, so we can feature blog posts we think you need to see to keep up.

Also, expect more guest bloggers who write original posts just for ATD, like one tomorrow from Slide’s Keith Rabois, giving BoomTown a hard time for our problem with juvenile widgets.

The Tech Top 10: Also on the left, just below Voices, we keep our edited Tech Top 10, a list of the stories we think you need to know about every day.

Video: On the right is our featured video. We do a lot of video at ATD and we will feature our latest-posted here.

Tech Around the Web: Also on the right, we are posting, via RSS, the feed from four digital news sources we like and think are useful for our audience.

Two are editorially driven sites, paidContent and GigaOm, who we believe are combining the energy of the blogosphere and also providing readers with trusted reporting that also adheres to the standards of accuracy and ethics we try to operate under too.

This is a big focus for us at ATD and we want to point readers to high-quality material. They say you are judged by the company you keep and we could not agree more.

Both Digg and Techmeme, of course, are the key news aggregators of the sector and we like how helpful they are in surfacing important tech and media stories for readers.

Just click on each tab to get to each section. This section will also be constantly refreshed throughout the day.

More ads: Well, we have to pay the bills, don’t we? We hope you do find them useful and don’t find them too intrusive.

There will be even more to come from us in the coming weeks, especially as we gear up for the sixth edition of the D: All Things Digital conference, which is taking place May 27 to 29.

So, please let us know what you think of our new look, as we would love feedback.

And special thanks to all who worked on the redesign, including Mike Monteiro of Mule Design Studio and especially the tireless and multi-talented Adam Tow, our Web genius.

Project Granola?

Apparently, that’s the jokey nickname that’s been given by some in the company to Microsoft’s (MSFT) new online strategy, in the wake of its failed efforts to acquire Yahoo (YHOO) that ended in a big heap of mess this past weekend.

Now, sources tell BoomTown, it is all about “organic”–hence the image of a healthy handful of granola (except for the fact that, in my experience, nobody really likes granola after eating it as much as they think will before).

In any case, it is a word Microsoft folks have been slipping into the conversations with BoomTown over the past few days, so much so that I have started to feel like I was talking to execs from Whole Foods.

Now Microsoft’s greenness has gone public.

Case in point: Brian Hall, Windows Live General Manager, who trotted out the organic word in front of Merrill Lynch analysts yesterday, as reported by CNET’s Ina Fried, saying: “We’ve withdrawn the offer and moved on, and now are focused on how we grow as fast as possible organically.”

But what does organic mean exactly?

Two things, it seems.

First, stepping up spending on marketing, technology and research to try to find ways to differentiate from Google (GOOG) and get into the No. 2 spot now held by Yahoo.

Of course, that plan has not worked out so well as yet for the software giant, with Microsoft spending billions of dollars with no profits and little gain in online search or ad market share, while its archrival Google keeps growing stronger.

Even so, while in Korea today, Microsoft Chairman Bill Gates backed Microsoft CEO Steve Ballmer’s do-it-yourself path and his move to walk away from Yahoo.

“The key decisions on that will be made by Microsoft CEO Steve Ballmer, who took a look at Yahoo and decided that, on our own, he likes the stuff that we’re doing,” said Gates.

Gates also added what amounts to the second option for Microsoft. “I wouldn’t rule out some partnerships, but we don’t have anything imminent there,” he said.

While a return to Yahoo is a possibility, in fact, buying up Web 2.0 stars is likely to be a bigger focus of the company.

“Yahoo can twist,” said one source. “Microsoft has lots and lots of other options.”

According to sources close to the company, for example, Microsoft’s bankers had been putting out subtle signals to Facebook to see if it would be open to a full buyout.

Microsoft already invested $240 million in the hot social-networking site, an investment that gave Facebook its kooky $15 billion valuation.

And its execs have long told Facebook execs they wouldn’t mind a bigger bite–um, like all of it.

“We just wanted to gauge their interest, more than any real effort,” said another source, who expects Facebook to stick to its longish path to an eventual IPO.

But, as is no secret, Microsoft has selections all over Silicon Valley to help it improve its Internet chances.

Those would include buying bigger vertical sites in strong categories like autos or jobs or finance, and also scooping up smaller but fast-growing socially oriented sites like Digg, Meebo, Yelp or focusing on ad plays like Spot Runner (which just got another big dollop of funding).

There might even be some sense in spinning some of these and all Microsoft Web units off into a separate Internet company, which would be another way of integrating even bigger deals for properties like Time Warner’s (TWX) AOL or News Corp.’s (NWS) MySpace (which are longer shots, I think).

In a post I did in February right after Yahoo rebuffed Microsoft for the first time, I suggested such a course for the company.

As I wrote:

Here’s a list: LinkedIn. Digg. Flixster. Slide or RockYou. Veoh. WordPress. Sphere. Sugar. Some international stuff. And more.

Then, some noted, Microsoft would have to give massive financial incentives to those entrepreneurs to stay and thrive. Most importantly, it would have to keep its Redmond hands from interfering.

Now that would send shivers up the spine of Larry and Sergey.”

And that, most of all, would be more like icing on the cake for Microsoft and be much more tasty than a bowl full of granola.

And, as Martha Stewart says: It’s a good thing.

Spot Runner, the online ad agency, delivered yet another Web 2.0 miracle today, raising another $51 million in funding from a diverse group of investors.

Among other services, Spot Runner makes and places low-cost television and radio ads for small businesses and is trying to bridge the gap between the traditional and online ad market.

In this round, those stepping up to invest in the Los Angeles-based start-up include international media giants Daily Mail and General Trust (DMGT.L) and Grupo Televisa (TV), investment company Legg Mason Capital Management (LM) and, curiously, luxury conglomerate Groupe Arnault/LVMH (MC.PA).

This group, along with existing investors, forked over the $51 million to add to the $60 million already raised. This appears to give it a massive valuation of upward of $500 million.

Well, at least in the land of Web 2.0 it does. In the real world, it still remains to be seen. But that has not stopped the nonstop investment party of late for Web 2.0 start-ups.

Web-based instant messaging company Meebo recently raised another $25 million at a reported $250 million valuation, while widgeteer Slide got $50 million for a $550 million valuation.

Of course, the champ of them all has been the social-networking site Facebook, which now has a $15 billion valuation.

Wheeeeeeeeeeeeeee! Or maybe not so much, but obviously no one in Silicon Valley is listening to BoomTown at this Kool-Aid carnival.

Spot Runner’s previous investors are: Allen & Company, Battery Ventures, Comerica Bank (CMA), Lachlan Murdoch, Vivi Nevo, Capital Research and Management, CBS (CBS), Index Ventures, Interpublic Group, Tudor Investment Corporation and WPP.

So far, this group has invested $60 million in Spot Runner. Its board includes Index’s Danny Rimer and former AOL exec Bob Pittman.

“We want to use the investment to make a real penetration in the market,” said Nick Grouf, chairman and CEO of Spot Runner. “We want to expand both organically and through acquisitions, as well as expand our staff, and these strategic investors will help us do that.”

Spot Runner has already been doing that. For example, it recently bought Weblistic, a local search listings creator, and hired former Microsoft exec Joanne Bradford.

The Daily Mail is a large media company based in the United Kingdom, with newspapers, online and radio assets, while Grupo Televisa is one of the largest media conglomerates in the Spanish-speaking world.

Groupe Arnault/LVMH owns some of the world’s toniest brands, including Moët & Chandon, Hennessy, Louis Vuitton and Givenchy.

Grouf, again along with partner David Waxman, also previously founded PeoplePC and Firefly Networks.

In the spirit of the funding, here’s one of my favorite Kool-Aid commercials:

Who’ll get Digg? (Odds-on favorite and sources tell me much sooner than later: Google.)

And who might make a bid for Slide, RockYou, LinkedIn, Meebo or imeem? (It might be smart for News Corp. [NWS] to double down in the social- networking space, if it can’t trade MySpace for a piece of Yahoo.)

And what about a plethora of really useful and interesting small start-ups all over Silicon Valley and elsewhere that are going to have to eventually find safe harbors when this Web 2.0 thing cools off, as it inevitably will. (AOL [TWX], Amazon [AMZN], eBay [EBAY] and, again, Google [GOOG], are natural choices.)

But not Microsoft (MSFT) or Yahoo (YHOO) if they persist in competing in this endless geek cage-match for too long.

Yesterday, more blustering bluster from Microsoft when it said, during its quarterly conference call, that it would not pay more to acquire Yahoo and might very well walk away from the deal.

My advice: Microsoft CEO Steve Ballmer should stop talking and start walking. If not, pay up and finish the deal.

And Yahoo’s CEO Jerry Yang should cooperate and stop its now-tiresome posturing (we get it, it’s worth more!).

Why?

Well, while the pair remained locked in mortal combat, a status that will continue if they actually do manage to unite and have to then conduct a doubtlessly slow-moving merger, their main rival Google and others are the likeliest to benefit every day this drags on.

Right after Microsoft made its unsolicited for Yahoo in February and it was quickly rebuffed, BoomTown suggested in a post that the software giant move on quickly and use its tens of billions to buy up the choicest and most innovative companies in the digital space.

What I wrote then bears repeating:

And what are the other options Microsoft might have that are actually better than scooping up Yahoo, especially to serve its Captain-Ahab obsession with harpooning the Great White Whale of Google?

If that is the actual goal, then many point out that a Yahoo win does not really frighten Google all that much, since the search giant has done just fine competing against both already.

In addition, many noted that a union of the pair, which would distract both Yahoo and Microsoft, might not be the magic bullet needed to fell Google from its high perch. And then what?

One idea I have heard, for example, was that Microsoft take its $44.6 billion in cash and stock it plans on spending on Yahoo and go on a shopping spree of the Web 2.0 companies all around Silicon Valley and all over.

And not just a few–lots and lots of them. And, more than one person suggested, it should start with Facebook, even at that wacky $15 billion valuation that Microsoft itself validated when it invested $240 million in the social-networking site recently.

“So what if it is only worth $10 billion or even less,” said one person. “They could lose a lot more on the risk of buying Yahoo.”

With the $30 billion left over, it could be like Christmas in July for the geeks and venture firms of Silicon Valley. But Microsoft could scoop up a lot of good stuff, even if prices are high.

Here’s a list: LinkedIn. Digg. Flixster. Slide or RockYou. Veoh. WordPress. Sphere. Sugar. Some international stuff. And more.

Then, some noted, Microsoft would have to give massive financial incentives to those entrepreneurs to stay and thrive. Most importantly, it would have to keep its Redmond hands from interfering.

Now that would send shivers up the spine of [Google’s] Larry and Sergey.”

It still would. So maybe, as it has threatened yesterday, Microsoft should run and not walk.

Please see this disclosure related to me and Google.

And, as BoomTown wrote yesterday, so the war of attrition for Yahoo begins.

Not with a bang, but a whimper. And so much whine, I am considering serving up a nice plate of cheese to all players.

But while the first moves by Microsoft (MSFT), which is seeking to take over Yahoo (YHOO), seem a bit weak, it is likely the more significant bombs will start flying next week.

But not quite yet.

First, came a not-so-subtle insinuation from Microsoft Steve Ballmer that he could take his marbles and go home any time.

He noted yesterday in a speech in Milan (Milan? OK, we’ll go with it) that the software giant is “prepared to move forward alone without Yahoo.”

A show of hands of who actually believes this claim, please, a classic go-fish negotiating ploy? No one? We thought so.

Then, comes the artfully worded Wall Street Journal story today, in which it is revealed that some at Microsoft are skeptical of the deal.

Apparently, Microsofties are worried that the job of merging Yahoo into Microsoft will take precious attention away from, well, them!

Well, that’s been the biggest open secret at Microsoft. Almost anyone you talk to notes that the Yahoo deal is risky, but it would be done no matter what due to Ballmer’s determination to use Yahoo to better hammer at rival Google (GOOG).

“This is Ballmer’s war,” said one Microsoft employee to me recently, who also noted that it is still a good move for Microsoft, despite the slowness of the attack. “I doubt he will surrender.”

Well, BoomTown suggested Microsoft do so back in mid-February in a post, noting that Ballmer might do better to use the $41 billion to buy up every hot start-up in Silicon Valley–Digg, Meebo, Slide and even the hopelessly high-valued Facebook–and still have money left over to buy everyone a tank of gas.

The Journal story also listed previously reported names of possible directors for a proxy slate Microsoft must nominate to replace Yahoo’s current board.

They include, noted the story, “former Nextel Partners Inc. CEO John Chapple, former Grey Global Group Inc. CEO Edward Meyer, Jaynie Studenmund, the former chief operating officer of Overture Services Inc., which was later acquired by Yahoo, and former Adelphia Communications Corp. Chief Financial Officer Vanessa Wittman, according to people familiar with the matter.”

Not to be whiny about it or anything, but with no truly prominent Internet executive or figure among these director possibilities so far, BoomTown would have to say we are profoundly underwhelmed by the list.

Thus, we await more powerful forces.

And that might be sooner than later. Microsoft will announce its earnings this afternoon, which–if they are strong and lift the price of Microsoft stock and, therefore, the Yahoo offer–could be the first big gun to fire in the proxy fight.

Oh, Max!

I just got through telling someone who asked me that I thought you, Slide founder Max Levchin, was one of the smarter Web 2.0 characters.

Then, of course, you get to be on the cover of Portfolio magazine for its “Brilliant” issue this month. Apparently, Max, you are Silicon Valley’s new “It” Boy.

But for all your apparently massive amount of brain cells, which should be on display at your keynote today at the Web 2.0 Expo in San Francisco, how can you be so dumb as to stumble into that same old rabbit hole as so many other Internet hotshots?

Yes, Max: The goofy photo.

In your case, you look good in the coat-and-tie get-up. But please tell me why, oh, why are you balancing a giant lightbulb on the top of your head, as seen here?

It just ain’t dignified!

(Levchin revealed to me via email last night that he actually balanced the monster bulb on his head–but I remain unimpressed.)

Still, you can be comforted to know, though, that you join a legion of other legendarily goony tech figures in the continued march of egregiously wacky pictures.

Such as:

Microsoft’s Bill Gates and his prom date, a PC:

That lovely couple, Larry Page and Sergey Brin of Google, and those irksome colorful exercise balls (not that there is anything wrong with that):

Digg’s Kevin Rose channels Wayne’s World:

Former Netscaper Marc Andreessen as Le Dauphin of France:

And, my personal choice for goofy-de-tutti-goofball photos–Amazon’s Jeff Bezos with his noggin in a box:

RockYou, widget maker, is the latest example of a sane valuation heartbreaker, as it is undertaking efforts to secure an investment from mainstream financing firms that would value the company at between $300 million and $400 million.

First reported by Valleywag last night, the start-up, said one source, “is being squired around Wall Street” by investment behemoth Morgan Stanley (MS), in search of the same kind of deal its rival Slide got in January.

BoomTown broke the news of that deal, which nabbed Slide $50 million and a $550 million valuation with investments from blue-chip investors T. Rowe Price (TROW) and Fidelity.

Thus, RockYou’s motto: Anything Slide can do, we can do slightly smaller!

And, indeed, not to be SuperPoked by Slide CEO and Founder Max Levchin, sources said RockYou Co-Founders Jai Shen (also CTO) and Lance Tokuda (CEO) were quickly on the march for their own payday.

It is, in fact, a quest that a lot of Web 2.0 companies seem to be on, since the sector’s fearless leader–Facebook–got its $240 million and $15 billion valuation from Microsoft (MSFT) last year.

All of this frantic funding activity is, of course, this bubble’s version of going public–grab big cash investments from investment firms and hedge funds, desperate for a good bet on the sector, without the pain of public scrutiny of questionable business prospects that did in Web 1.0 shooting stars.

It’s that or get bought for an ungodly sum by equally desperate Web 1.0 companies (See: AOL+Bebo).

Sources close to RockYou, which has had acquisition feelers put out to it from larger companies in the past, said the company has had several strong offers of funding, but it is trying to select the right partners for the latest round of funding.

“We want our investors to be strategic and helpful to the company,” said one person close to RockYou.

RockYou has so far been funded by Sequoia Capital, Lightspeed Venture Partners and Partech International.

(Interestingly, Sequoia backs another instant messaging and chat widget maker, Meebo, which is reportedly seeking a $250 million valuation, which I posted about here yesterday).

To be fair, makers of highly distributed third-party apps like RockYou are garnering immense traffic and their widgets are syndicated everywhere. RockYou’s Super Wall, which lets you turbocharge your digital wall, for example, is one of the most popular on Facebook.

Other RockYou apps include: X Me, a communications tool that allows you to “Hug Her, Slap Him, Tickle Them!”; and Likeness, where you can “compare yourself with friends and movie stars like Angelina Jolie, Jessica Alba, Keira Knightley and many more.”

The company has been trying to monetize all this traffic and popularity and distribution, as well as knowledge of user behavior, by offering advertisers new forms of engagement.

But the jury is still out on these interesting but unproven efforts by all the social-networking players.

In any case, the money is apparently still flowing into these start-ups, taking a chance on them being the next big media play.

Here are two videos I made when I visited RockYou’s offices in San Mateo, Calif., last October, after I had called the widget market juvenile and faddish.

The first is my tour of the office, where I was playfully accosted by an infant–oops, a RockYou engineer–in a suit. The second is my interview with Shen and Tokuda.

With all the noise about Microsoft’s $41 billion offer to buy Yahoo, I dropped the ball on posting about a chat I had about a week ago with Slide’s Max Levchin (pictured here) about the recent $50 million investment that valued the widget maker at an astonishing $500 million.

To say I was dumbstruck by the market value, given that the profitless start-up has only about $10 million to $12 million in annual revenue and a still unproven business plan, would be wrong.

Incredulous, yes. Gobsmacked, indeed. Feeling like I was back in 1999, most definitely. But not dumbstruck!

Thus, I queried the always voluble Levchin, who agreed to talk to me readily (no Jerry-Yang-cave-dwelling behavior for this 32-year-old Web 2.0 serial entrepreneur!) about the investment by two old-line institutional investors–Fidelity and T. Rowe Price–and its implications for Slide.

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You have to hand it to Slide Founder and CEO Max Levchin, who has just launched a new blog.

The title of the blog? “You’ve Gotta Be Kidding Me: The Official Press Organ of the Maxist Revolution.”

Very funny, Max! (Here the Ukrainian-born Levchin is pictured in Moscow’s Red Square!)

By spooky coincidence, “you’ve gotta be kidding me” is the working title and guiding principle of a post I am preparing on the recent $500 million valuation for the San Francisco-based widget maker!

More on kooky widget economics soon, but Levchin is a welcome addition to the blogosphere, given his obvious intellect and engaging personality.

He joins other entrepreneurs, like Mark Cuban and Marc Andreessen, who have proved themselves to be most excellent bloggers.

Levchin’s first post is about how to successfully launch a social-networking development platform, which he knows a thing or two about.

I am particularly intrigued by No. 9 and No. 10:

9. Make the No. 1 measurable goal of your PR team the amount of coverage that successful (or just interesting) developers get. People will jump through all kinds of hoops to be in the papers. Double so if the article lists them next to a [your] big brand.

10. Hold frequent developer events and invite leading developers to speak at those. Elevating developers (especially the smaller ones) to a pseudo-celebrity status can create a great deal of good will.

Hoop-jumping to get in papers and pseudo-celebrity status sounds a little Britney Spears for my tastes, but I like the spirit of it!

Of course, he did forget getting a crazy valuation as the best attention-seeking missile of all, and he already had a close-shaved haircut!

Here’s Max doing some Olympic hoop-jumping in one of my video interviews with him last fall, discussing the IPO market for widget companies like Slide:

It’s Bubble Time!

As BoomTown broke the news in its post earlier today, Slide grabbed a big pile of cash from new investors–$50 million from Fidelity and T. Rowe Price–which puts the value of the company at $550 million.

In our post, we said the San Francisco start-up, whose widgets are among the most popular on Facebook and MySpace, was completing a round of funding that could value it at many times a multiple of its most recent $60 million to $80 million valuation.

The investment from the pair of private equity funds gives them a 9% stake in the maker of widgets and other social-networking applications.

Allen & Co., the media-connected New York-based investment firm, helped Slide execs in raising the latest round.

Don’t think we did not notice that the venture investors already in Slide did not pony up more funds at this–let’s just say it, shall we?–crazy valuation.

But it is noticeable that such mainstream investors are jumping into the giant pool of Kool-Aid that the social-networking industry has been swimming in over the last year.

Slide’s last round–an investment of $20 million–took place in November of 2006 with investors that included Khosla Ventures, BlueRun Ventures, Founders Fund and the Mayfield Fund.

So Slide’s investors, of course, were smart to get in on the ground floor to take advantage of the bubble that is expanding at alarming rates.

The ground-zero of that trend came when Facebook got a $240 million investment from Microsoft that valued the company at $15 billion.

Of course, while garnering revenues, neither Facebook nor Slide has the kind of business yet to deserve being worth this lofty amount, except for the fact that investors are counting in its potential and recent quick growth.

Slide’s business plan includes making money from selling premium versions of its widgets, as well as selling advertisers on its large, although disparate, audience.

The company calls itself the “largest personal media network in the world, reaching more than 134 million unique global viewers each month and 30% of the U.S. Internet audience.”

But the company recently said reports had put that number at 144 million, excluding its 50 million users on Facebook. Its competitors include other widget-makers like RockYou.

Slide makes a wide range of software, called widgets, that have been attracting many millions of users each. They include everything from slide shows to a program called SuperPoke that allows a user to, well, poke another in a super way.

A lot of Slide’s current growth has been through taking advantage of the huge spike in users first at MySpace and now at Facebook, which is promising, but also not certain.

To say that we have seen this story of fast growth, insane valuations and then the inevitable drop-off would be an understatement.

But Slide Founder and CEO Max Levchin and his team consider the company to be a new kind of distributed content and application company that is not dependent on large platforms like Facebook and MySpace and has huge potential.

Minor blogging annoyance: Of course, in a fit of pique since we revealed the funding without their help, Slide hand-fed the details of the deal to the New York Times and BusinessWeek, both of which somehow forgot to link to our post that said Slide was landing the deal. (Brad, Sarah: Please, please don’t tell us you figured it all out on your own this morning over eggs.)

UPDATE: A New York Times deputy tech editor just wrote an email to tell me its reporter already had a “previously scheduled” meeting with Slide about the deal–like I said, hand-fed!–this morning, which “inspired” its post and did not know of BoomTown’s news of the funding (even though it was up since 12:06 a.m. and noticed by everyone else, including Slide). Also, they had the hand-fed details! They did! I admit it! I went hungry, since I did not agree to an embargo! “In light of this we didn’t feel that a link was warranted,” he wrote me.

But we’re not bizarrely ungenerous like that, so here is the link to the New York Times story, in which Slide’s Levchin said his company makes Facebook and MySpace worth using. (And here is the BusinessWeek link too.)

“It’s impossible for social networks focused on scaling the network itself to build all the niche applications that bring people and keep people on these sites,” Levchin said, noting Slide widgets “add the bulk of perceived value to the consumers of these Web platforms.”

He also said he would use the money to expand its repertoire, but said Slide would try to develop in-house.

But others close to Slide said this was not exactly so, and that the company would also look around for good acquisition targets, using stakes in the newly valued Slide as currency.

Call it the Facebook Funding Effect.

I am still collecting details, but Slide–the San Francisco start-up whose widgets are among the most popular on Facebook and MySpace–is completing a round of funding that could value it at many times a multiple of its most recent $60 million to $80 million valuation.

That would be a large leap from a round that Slide announced in November of 2006 with investors that included Khosla Ventures, BlueRun Ventures, Founders Fund and the Mayfield Fund. Sources said the investment then was $20 million.

Slide is reportedly using Allen & Co., the media-connected New York-based investment firm, to help them in raising the latest round.

The reason for getting more funding, said sources, is to be able to acquire other companies and expand, using cash and the stakes in the higher-valued company, much in the same way that Facebook has done.

The social-networking universe was recently shaken up, when Facebook got a $240 million investment from Microsoft that valued the company at $15 billion.

Slide makes a wide range of software, called widgets, that have been attracting many millions of users each. They include everything from slide shows to a program called SuperPoke that allows a user to, well, poke another in a super way.

The company calls itself the “largest personal media network in the world, reaching more than 134 million unique global viewers each month and 30% of the U.S. Internet audience.”

But the company recently said reports had put that number at 144 million, excluding its 50 million users on Facebook. Its competitors include other widget-makers like RockYou.

A lot of Slide’s current growth has been through taking advantage of the huge spike in users first at MySpace and now at Facebook.

But Slide and its founder Max Levchin, as well as its investors, have grander dreams than riding on the coattails of bigger players.

They consider the company to be a new kind of distributed content and application company that is not dependent on large platforms like Facebook and MySpace.

More to come about the funding, but here is a post of a visit I made to Slide in September of 2007 and also a video interview I did with Levchin:

Fortune had an interesting article by Jeffrey M. O’Brien on the links between and among the various alumni of the PayPal online payment service, focusing on the Mafia-like aspects of their affiliation.

Actually, after reading it, with all the silly sniping among some of them (now all apparently resolved), it sounded to me more like the infighting of a particularly catty sorority than the back room of the Bada Bing.

But it is an interesting example of how insular Silicon Valley operates, creating new companies out of the carcasses of old ones and how important the roundelay of interconnections can be–in this case, stretching from PayPal to Yelp to Digg to YouTube to Facebook.

But the photos of the former PayPal group (pictured here at San Francisco’s famed Tosca) playing dress-up as nerdy gangsters was a nice touch, as was the shot of investor Peter Thiel as capo di tutti capi and Max Levchin, now running hot widget maker Slide, as his consigliere.

But if you want to see them both in more normal action, here’s a video interview I did recently with Thiel and a three-part one I did with Levchin.

Peter Thiel:

Max Levchin, Part 1:

Max Levchin, Part 2:

Max Levchin, Part 3:

Marc Canter isn’t the only one talking out loud about Google’s OpenSocial initiative.

Max Levchin, founder, chairman and CEO of Slide–the No. 1 widget maker on Facebook–sent out an email (posted in full after the jump) on Friday about the development. His point? For makers of third-party applications for social networks, their bread is buttered on all sides and along the edges.

Max, to continue the carb metaphor, is one smart cookie. (See my series of three interviews with him, also after the jump, to get an idea of his plans for world widget domination.)

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The ankle-biters have spoken and it seems that I am completely wrong in my estimation in several recent posts where I wrote that Facebook widgets are–how shall we put it delicately?–exceedingly inane.

Why? Apparently because inane is the goal! Well then, I guess: Mission accomplished!

At an appearance at the Web 2.0 Summit yesterday, a group on a panel called “Facebook as a Platform,” led by Dave McClure, talked about a lot of stuff.

But it seemed to get lively when the discussion turned to my comparison of the boom in third party apps on Facebook to the arrival in my home of a box of shiny plastic toys from China.

I was at home with my own actual 2-year-old playing a rousing game of hit-mama-with-the-foam-finger- and-crack-up-hysterically, when the group–which included Seth Goldstein of SocialMedia, Ali Partovi of iLike, Keith Rabois of Slide and Lance Tokuda of RockYou–declared me humorless.

All because I did not realize that these apps were meant to be silly and more fun than a barrel of monkeys.

Actually, I did know that and, by the way, monkeys are much more fun.

Here was my initial argument:

But, so far, as popular as those apps have become, what [Facebook founder Mark] Zuckerberg and the widget-makers have wrought is mostly silly, useless and time-wasting and the kazillion users of these widgets are pretty much just acting like little children.

“I never thought I would call the often frivolous AOL back in the day–very simply, a Neanderthal version of Facebook–a mature offering in comparison.

“While I will admit when I am not chewing nails that a lot of these apps are somewhat fun, I can’t help but ask myself that lyric from the old Peggy Lee classic: ‘Is that all there is?’

“And if that is all there is, can Facebook really build a viable and long-lasting business on what is essentially a bunch of games that will ultimately become wearying for users? Doesn’t it need more robust apps that actually are useful and relevant and make Facebook the service that Zuckerberg has often told me was a ‘utility’?

“While Facebook–with a cleaner and more strict look and a better navigation–is surely less goofy than rival MySpace for anyone over 12 years old, and its video, photo and email features are nice, the vast majority of its apps are still mostly as dumb as a box of hammers.”

“Kara’s argument is ridiculous,” said Slide’s Rabois, according to a report on Wired.com.

“Why do people watch movies and TV? Because they’re bored or looking for something to do to relieve stress in their lives. Apps are providing entertainment to users.”

Really, Keith? I had no idea, despite the fact that “Gilligan’s Island” was my favorite show for way too many years!

Seriously, I know what he is saying and I agree on the need for some fun on this tragic little spinning globe of ours, except:

1. I would be fine with silly widgets, if there were more serious ones too, well beyond Vampires and SuperPokes and even an app called Pop Ur Zit. All of these have the longevity of a gnat, designed to be faddish and quickly forgotten. And, if you are going to be fun, one might try a little harder to come up with some offerings that are a little less disposable.

In fact, on a recent visit I made to RockYou HQ (post coming Monday), its savvy tech lead noted that there was surely a limit to how much crap people wanted to throw at each other.

2. Entertainment, especially the idiotic kind, will not get you to massive sustained usage that characterizes a true paradigm shift that McClure claimed was happening.

For example, was it all the games that made the personal computer become a ubiquitous device? No, it was serious programs like VisiCalc and Lotus 1-2-3.

So where are those kind of apps for systems like Facebook, I wonder, as I noted in another post about what to do with a group of 2,500 techies I have gathered on the social-networking site. So far, we have a whole lot of nothing to offer them.

3. Another argument made on the panel was that the blogosphere used to be disdained as goofy only a few years ago and now it is a true media power.

Well, it was never disdained by me and, actually, there were a lot of substantive and important blogs even back then to balance out the fluffier ones. In fact, there were more.

4. As RockYou’s Tokuda said, referring to me: “I believe for her the apps are useless because she’s not a teenage girl.”

This is not a news flash, although I probably am one of the older diehard fans of “Hannah Montana.”

But it is not necessarily true that advertisers will flock to these widgets, just because the kids love it.

Because as much as advertisers want to reach a younger demographic, they also do not want to do it in an environment of frivolous engagement and I doubt there is much appeal to them when people are busy slapping each other digitally or cartoonifying their friends. In addition, advertisers want to reach people who will buy things and few are in that mindset when they are anonymously telling someone else the “honest” truth or being a Human Pet.

I could go on, but will stop there, so the Lollipop Guild can respond in crayon.

But here’s one offer I will take RockYou’s Tokuda up on: A promise he made onstage to build something just for me.

Just some guidance, Lance: No poking, slapping, tickling or zit-picking.

Call me old-fashioned, because I know you will anyway.