The content-discovery service, StumbleUpon, has gotten itself back to start-up status, after being bought by eBay two years ago.

It announced today that it was returning to being an “investor-backed startup” by a roster of well-known Silicon Valley investors, including Ram Shriram of Sherpalo Ventures, Accel Partners and August Capital.

Its founders, Garrett Camp and Geoff Smith are also back, with Camp now in place as CEO.

“We are grateful to eBay for its guidance. However, we realized there were few long-term synergies between the two businesses. It is best for us to part ways and focus on our respective strengths,” said Camp, stating the very obvious.

That’s quite a boomerang since it was acquired by the auction giant in 2007 for $75 million.

Before that event, which was at the height of the Web 2.0 fervor, the Canadian-born social-bookmarking start-up, which launched several years ago, came to the Bay area in 2006 and got some fancy venture investors (Mitch Kapor, Ron Conway, Shriram and others) who ponied up a couple of million dollars. It soon became a traffic-generating hit.

But rumors of the San Francisco-based company being sold by eBay (EBAY) have swirled around it almost since it was bought, although there was no sale.

The same has been true for eBay’s other purchase, of voice-over-IP service Skype. A recent report in the New York Times said its founders were also considering buying Skype back from eBay.

Under eBay, the site has floundered a little bit, but made some changes, such as unveiling a new Web-centric look and feel and a new partnering program last fall that represented a major shift for the online discovery service.

In that change, users no longer had to register for the service or download its toolbar to “stumble” the Web.

Terms of the deal were not released, but we’re digging! Um, stumbling!

More to come, but here’s the full press release from the company, as well as a video I did at the party StumbleUpon threw after getting acquired by eBay, including an interview with then-thrilled Camp:

StumbleUpon Goes Independent; Backed by Founders and New Investors

April 13, 2009 – StumbleUpon, the best way to discover new content on the Internet, today announced that after nearly 2 years as a subsidiary of eBay Inc., it has returned to the ranks of an investor-backed startup. StumbleUpon is now backed by the original company founders, Garrett Camp and Geoff Smith, as well as a number of well-known investors including Ram Shriram of Sherpalo Ventures, Accel Partners, and August Capital. Camp takes on the role of CEO of StumbleUpon.

“We are grateful to eBay for its guidance. However, we realized there were few long-term synergies between the two businesses. It is best for us to part ways and focus on our respective strengths,” said Camp. “This change makes it possible for StumbleUpon to continue to innovate and focus on becoming the Web’s largest recommendation service.”

“StumbleUpon helps users discover the best of the web–it’s a way to find interesting content you wouldn’t think to search for,” said Shriram. “StumbleUpon’s personalized recommendation engine brings serendipity back to websurfing, and lets users sift through socially-endorsed content with a single click.”

StumbleUpon will remain focused on helping people discover interesting content by increasing the accessibility of the StumbleUpon service and the quality of recommendations. In addition, StumbleUpon has plans for several new products and features to be released in the upcoming months.

We all liked Mike. In fact, we all loved the pugnacious, energetic and restlessly entrepreneurial Silicon Valley exec.

Sadly for those who knew him, Mike Homer died today at his home surrounded by family and friends, after a long battle with a severe illness. He was 50.

Homer is survived by his wife, Kristina, and three young children: James, Jack and Lucy.

His funeral is at Saint Raymond’s Catholic Church in Menlo Park on Thursday.

In 2007, Homer was diagnosed with Creutzfeldt-Jakob disease.

A rare, neurodegenerative “prion” disease, which in Homer’s case has occurred sporadically rather than via infection (the well-known variant that occurs in animals is called mad cow disease), CJD’s incidence is one case in a million annually, and few survive beyond a year after exhibiting symptoms.

His illness inspired his family and many friends to find treatments and a cure for the cruel disease, and include the man–Dr. Stanley Prusiner–who won the Nobel Prize in 1997 for discovering prions, infectious agents that are at the heart of CJD.

In late 2006, Homer began suffering from memory problems. Another close friend, Netscape co-founder Marc Andreessen, aided Homer in getting to the right doctors at Stanford University Hospital, where he was diagnosed.

Quickly, via angel investor and close Homer friend Ron Conway, who serves on the board of the University of California, San Francisco, Medical Foundation, Homer’s case was moved to UCSF. The hospital there is the only place in this country that has a major laboratory doing both research and clinical trials on CJD.

Still, there is no known cure for CJD, and treatments have been few. That might change, given the push that Homer, his family and friends had been making to accelerate the pace of discovery for treatments and a cure by raising many millions of dollars for the cause and pushing for even more aggressive development.

At an event in Palo Alto in 2007 for those interested in helping beat CJD–organized by Conway and well-known Silicon Valley exec and Homer mentor Bill Campbell, with Homer in attendance–he was in fine form, greeting well-wishers with a laugh and sassy attitude, especially given the dire situation and obvious difficulties with speech and movement.

As I wrote then:

Such fighting spirit was typical of Homer, whom I met when I was doing my first book on the rise of America Online more than a decade ago, when he was an executive at the then-high-flying Netscape.

He had also, like many, put in time at Apple and was known throughout the industry for his hard-charging and straightforward style. He needed it in the later days of Netscape, when he arduously tried to shift the company’s focus from a browser-software business besieged by Microsoft to a portal business.

Despite his sometimes tough demeanor, Homer was always willing–unlike so many others–to debate his business in an all-out-on-the-table manner I found refreshing compared to the sometimes earnest and smooth spin of most dot-com entrepreneurs.

Most of all, even when you disagreed over an issue, he always left such arguments at work and was ready with his quick laugh or a razor-sharp quip no matter what.

Recently, before his illness, Homer had been investing in and mentoring a series of start-ups. But he had also been focusing a lot on philanthropy and, most of all, his family and, especially, his three small children.”

My deep condolences go out to them and, really, everyone who had the privilege of knowing Mike.

More about his career and memories of Mike to come. But until then, here’s the video that was shot at the 2007 Palo Alto event called “The Fight for Mike,” which is introduced by Campbell:

[Updated with new details about deal, including who worked on it and info on a cash component.]

About three weeks ago, Facebook and Twitter ended several weeks of serious talks, in which Facebook was offering to acquire Twitter for $500 million of its stock, which also included a cash component.

While rumors of Facebook’s interest were brought up in an interview with Facebook CEO Mark Zuckerberg at the Web 2.0 Summit a few weeks ago, some shot down the idea as silly.

Quite incorrectly, as it turns out, since top execs at both Facebook and Twitter were right then at the tail end of discussions, which were initiated by the privately held Facebook in mid-October, about bringing the two together.

Those talks, sources on both sides said, are now over.

So why did the deal break down?

Well, as is usually the case, over price–was $500 million worth of Facebook stock actually worth $500 million?–and the typical concerns about integration and costs.

But, more important, it seems, was a feeling among Twitter investors and execs that the start-up should still take a shot at building its revenues–there are none right now–as well as it had done at building its growth.

“It’s more about timing,” said one person familiar with Twitter’s motivations. “There is a strong feeling that there is still an opportunity–even with the economic downturn–to blow this thing out.”

Still, combining the world’s fastest-growing social-networking site with what is quickly becoming the best-known microblogging service is actually a natural fit.

That’s especially true given that Facebook–for all its powerful online social connections–has seen Twitter race past it in innovating in the “status update” arena.

While some sources at Facebook said Zuckerberg was becoming frustrated by the buzz Twitter was getting–a market that should have been dominated by Facebook–others at the company said he was interested in buying Twitter because of his respect for its progress.

Indeed, at the Web 2.0 interview, Zuckerberg called Twitter an “elegant model” and said that he was “really impressed by what they’ve done.”

Indeed, with about six million registrations, as reported in October, up 600 percent over the last year, the San Francisco-based Twitter–launched in 2006–has had impressive growth.

(It has also been plagued by technical issues, which are–to be fair–decreasing.)

In any case, for those not familiar with it, the premise of Twitter is dead simple: A registered user logs in via the Internet or a mobile phone and answers the “What are you doing?” question the service asks in only 140 characters or fewer.

It’s quite a clever idea, although–so far–not a money-making one.

To try to goose that, Twitter’s board replaced the engineer who created Twitter, Jack Dorsey, with another founder, Evan Williams, who had served as its chairman and chief product officer.

The more experienced Williams (pictured here) had already built one company–Pyra Labs, which created the Blogger blogging service–that he sold to Google in 2003. He also started the audio and video search site Odeo, where Twitter was actually born.

Still, its investors have not come down on Twitter to hold back its growth efforts, and have handed over $20 million to the start-up so far. In its last round, Twitter was valued at $98 million.

Its funders include: Union Square Ventures, Charles River Ventures, Digital Garage, Spark Capital and Bezos Expeditions, backed by Amazon Founder and CEO Jeff Bezos.

In addition, well-known Silicon Valley figures, such as Marc Andreessen and Ron Conway, have also invested. Interestingly, Andreessen is also on Facebook’s board.

Other private investors include FeedBurner Co-Founder (and now Googler) Dick Costolo, former Epinions Co-Founder Naval Ravikant and former Googler Chris Sacca.

Twitter needs all the investors it can get, since it has no revenue, although it has been exploring things like charging business customers and adding advertising into the consumer service.

Lack of revenues was an issue for Facebook, said sources, especially related to fees Twitter pays for delivery of its messages to cellphones.

While the issue has been manageable in the U.S., Twitter cut off its SMS support in some international markets this summer because of too-high costs.

But, if Twitter was offered to Facebook’s 120 million users, Facebook execs estimated that it might have to deal with huge SMS fees–up to $75 million annually.

“Facebook has its own revenue-generating challenges,” said one person close to the company. “As much as Twitter would give them a lift in the status area, it was still a worry.”

Not enough, said several sources, to stop Facebook from making another approach at some point in the future. “We’d hate to see Twitter go to another company,” said one source.

Indeed, while all are even more price-conscious than Facebook, large companies that could also be interested include: Google (GOOG), Yahoo (YHOO), Microsoft (MSFT) or a large telecom company, such as Verizon (VZ).

If it had completed the deal to buy Twitter, it would have been Facebook’s most significant acquisition by far.

Zuckerberg and Williams did meet and get along well, but the deal was primarily negotiated by Spark Capital partner Bijan Sabet (Spark is a Twitter investor) and Facebook deal guy Dan Rose.

But in this time, at least, the Twitter side was still not interested in selling at the price Facebook had offered.

The $500 million offered was in an all-stock form, said sources on both sides, at the $15 billion valuation that came from the Microsoft’s investment in the company last October.

The Twitter side felt that figure was inflated and the shares should be valued at the lower figures that have also been reported for Facebook’s true valuation, more in the $5 billion range.

That would have given the deal a $150 million price tag, which was seen as too low, especially since it was in Facebook stock and not cash initially.

In fact, Twitter wanted cash, which some sources say was offered by Facebook in the $50 to $100 million range, in addition to stock, but taking too much stock was still a major issue.

There are other ways the pair could have approximated a safer choice for Twitter, via warrants, of course, or other methods.

But, said several sources close to Twitter, the primary reason for not selling was because its board simply did not want to yet or perhaps ever.

Said one source: “The question is, is it really a good idea to sell on the first chance you get?”

Well, for Twitter, we’ll just have to wait and see about that, of course.

[Photo of Evan Williams by Joi Ito. Licensed under Creative Commons 2.0 By-Attribution license.]

Here’s a video of star VC John Doerr reciting his 10 tips for start-ups to follow in the economic downturn.

Doerr gave out the advice at VentureBeat’s “How to manage your start-up in the downturn” roundtable event, which took place at the Stanford Park Hotel in Palo Alto yesterday morning.

The Kleiner Perkins Caufield & Byers VC got a lot of attention for his list, which he culled from a survey of 18 of the companies his firm has invested in.

Doerr didn’t need a massive, noisy PowerPoint like Sequoia Capital to make his quick and clear points, which he delivered in four minutes flat.

Doerr was on an investors panel with Ram Shriram, one of Google’s first investors, Ron Conway, Kittu Kolluri of New Enterprise Associates and Matt Cohler of Benchmark Capital.

I moderated the second panel of entrepreneurs, including: Toni Schneider, chief executive of Automattic, the company that makes the WordPress blogging software; Max Levchin of Slide, Jason Calacanis of Mahalo; and Nirav Tolia of Web 1.0’s Epinions. Video of interviews with them and also Shriram to come later today!

But here’s Doerr reciting his 10 tips:

It will take place at the Stanford Park Hotel in Palo Alto from 8 a.m. to noon.

Toni Schneider, chief executive of Automattic (the company that makes the WordPress blogging software) will join Max Levchin of Slide, Jason Calacanis of Mahalo, O’Melveny & Myers’ Sam Zucker, and Nirav Tolia of Web 1.0’s Epinions.

Along with my group, for whom I am planning all sorts of verbal tortures (”Exactly how much do you make?”), there is also a panel of investors, moderated by VentureBeat’s Matt Marshall, which features: John Doerr of Kleiner Perkins Caufield & Byers; Ram Shriram, one of Google’s first investors, Ron Conway, Kittu Kolluri of New Enterprise Associates and Matt Cohler of Benchmark Capital.

Oh, it is sure to be a festival of Web 2.0 pondering.

Said Marshall in a post about the gathering:

One goal of this event is to provide context and advice for start-up CEOs and founders facing the recession. We’ve handpicked the speakers for their remarkable records and experiences in the previous downturn. …

While the Sequoia [Capital] ‘RIP Good Times’ presentation gave a broad overview of the economic problems facing the tech world, it provided mostly a macro analysis, and a general prescription for companies.

Now is the time to take the analysis one step further, and discuss the variety of situations we see among valley investors and their start-ups: How cleantech companies are different from Internet start-ups, and how under certain conditions, a profitable company may actually be poised for aggressive growth, hiring and M&A–and not necessarily ideal for cost cutting. We intend to explore all of this and more.

Given the fairly predictable ‘Silicon Valley is in circle-the-wagons mode’ story line we’ve been seeing so far in the media, this event is also the Valley’s opportunity to help dispel this myth and explain how the area’s start-ups are actually quite diverse and that there are a mix of strategies at play.”

The event is sold out, but it will be streamed live.

And, as usual, look for a shaky video report of the roundtable from me later!

BoomTown always enjoys chatting with the always sunny Loïc Le Meur of Seesmic (and will, in fact, be appearing at his Paris-based digital conference in December, called Le Web).

But I am not quite sure what to make of his big, happy smile that was in this picture above (click in the image to make it larger), which went with a story in the New York Times about start-ups cutting costs.

In fact, the whole Seesmic crew is grinning awfully hard, putting a very game face on recent layoffs that cut the staff at the video blog service by more than a third.

Money–or, more accurately, non-money–quote from the Times piece:

“To preserve cash, many tech start-ups are rushing to lay off employees and cut expenses. They are shelving their dreams of Google-size riches and getting small, humble and thrifty, all with the more modest goal of surviving the coming economic winter.”

In a less puritan mode, Seesmic raised $6 million in May from a bunch of high-profile angels, of $12 million total.

They include LinkedIn’s Reid Hoffman, former AOL head Steve Case, SoftTech VC Jeff Clavier, entrepreneur Mark Pincus, former Goldman Sachs analyst Michael Parekh, entrepreneur Ariel Poler, investor Ron Conway, FON founder Martin Varsavsky and an investment group called Atomico founded by Skype founders Niklas Zennström and Janus Friis. Tech bloggers Jeff Pulver, Michael Arrington and Dan Gillmor have also invested.

Now, Le Meur is trying to stretch his dollars in the economic downturn, spurred by venture capitalists who have been pressing entrepreneurs like him to do so.

“If I can’t make this work in three years it will be a failure,” Mr. Le Meur said to the Times. “If I can and I get through this, it will be much stronger.”

In other words, what doesn’t kill us …

C’est la vie in Silicon Valley!

But in more bon-vivant times, back in February, I did a video post on my happier visit to Seesmic’s San Francisco HQ.

(Note: Many in the video are no longer at Seesmic and neither are the shows discussed, as well as the now-defunct Web 2.0 sentiments about growth without revenue.)

Here’s the video:

Image Credit: Jim Wilson/New York Times

Of course, the stock market had to come roaring back and it had to be extra sunny on the very day I was scheduled to have lunch with well-known Silicon Valley investor Ron Conway to talk about the worrisome state of the digital sector.

After all, it was Conway (pictured here), as well as Sequoia Capital, who sent out a stink bomb of an email last week to his start-ups to deliver a simple message: The Web 2.0 party is over.

Said Conway to his entrepreneurial troops as the market was crashing down and smacking tech companies hard in the process:

“Unfortunately history DOES repeat itself but I hope we can learn from history and prevent the turmoil from occurring again. The message is simple. Raising capital will be much more difficult now … the name of the game in this environment in some respects is survival–survival until conditions change.”

Survival!?! What ho? This from the man who is one of the more upbeat of Web investors! Who is one of the backers of Digg, Facebook, Twitter, Ning, Seesmic and 125 other Web 2.0 companies?

Ironically, our lunch yesterday was little more than a year after I had had another lunch with Conway, where I also made a video, and during which we had a lively discussion about a range of topics, including the venture business (better than ever!), innovation (better than better than ever!), monetizing video content on the Web (best of all!) and more.

Yesterday, the news was not so happy, of course, although Conway did try to explain in more detail exactly what he meant in his most recent email, which echoed one he had also sent out when the last Internet bubble was popping a half-dozen years ago.

And that is: You better have a year’s worth of cash and a revenue model or you’re toast.

Other than that, Mrs. Lincoln, he’s bullish!

Here’s the video (and below it, the one from June 2007, when things looked a little sunnier for Conway and Web 2.0):

I am sure this will be the dumb-as-a-box-of-hammers reasoning this group of Web 2.0 folks gives for this odd video effort, doing a lip-synch romp on their group vacation in Cyprus to Journey’s “Don’t Stop Believin’,” and then posting it for all to see on Vimeo.

It is titled: “20 world Internet citizens met in the Turkish Republic of Northern Cyprus in October of 2008 for a week of reflections on life, love, and the Internet.”

Um, kids, here’s a reflection: While you swim in that pricey infinity pool in your luxury villa, Silicon Valley is tanking all over the place. You might want to check your email and see if Sequoia Capital or Ron Conway has cost-cutted you out of a job!

Oh, sorry, BoomTown’s karma is so negative, isn’t I?

But the video gave me flashbacks to heedless-partying-until-the-bomb-fell attitude before the popping of the Web 1.0 bubble. It obviously still burns.

The group rollicking includes Blip.tv’s Mike Hudack, Facebook’s Dave Morin, Drop.io’s Sam Lessin and–well, um, eek, bad idea, awkward!–tech reporter Jessica Vascellaro of The Wall Street Journal.

Here is the video:

UPDATE: Apparently, the makers of the video have made it private on Vimeo and blocked it on YouTube, likely due to the reaction to it, but you can see it here.

Is it just me or does the sudden prospect of venture capitalists–the very investors who fueled the Web 2.0 valuation insanity with their typically egregious overfunding of start-ups–lecturing about the bleak economy and the need to tighten belts seem just a tad ironic?

It’s kind of like Washington politicians who handed out-of-control bankers one deregulation after another in exchange for campaign donations now mounting their high horses and decrying Wall Street greed in the current economic meltdown.

And yet, just like that, Silicon Valley’s investors–who could spin you all the way to next Sunday about how Facebook was actually worth $15 billion, despite not having much revenue quite yet–are turning into penny-pinching accountant types.

As reported by Om Malik of GigaOm in a piece titled “Sequoia Rings the Alarm Bell: Silicon Valley Is in Trouble,” for example, Sequoia Capital–one of tech’s most powerful and successful VC firms–held a meeting where it told its portfolio companies that the downturn was quite serious and advised them to start cutting costs.

Apparently, there was even a picture of a gravestone with “R.I.P.: Good Times” displayed at the gathering, in case the start-ups did not get the sledgehammer message. (And here is an update on the meeting by Malik.)

The last time Sequoia did this was when the Web 1.0 bubble was popping in 2000.

The same communication was also sent out to entrepreneurs by angel investor Ron Conway then, and now yesterday again.

The typically jovial Conway (pictured here) sent out a grim email to the start-ups he is invested in, advising they lower their burn rate to get ready for the tough times ahead.

Wrote Conway: “Unfortunately history DOES repeat itself but I hope we can learn from history and prevent the turmoil from occurring again. The message is simple. Raising capital will be much more difficult now … the name of the game in this environment in some respects is survival–survival until conditions change.”

Now he tells us!

In all seriousness, these kinds of prescriptions should have been front and center when times were presumably good, especially after the first orgy of Internet frothiness ended with such a thud.

Instead, the all-trees-grow-to-heaven attitude, the massively inappropriate valuations, the revenue-what-revenue strategies have been pushed on entrepreneurs in this cycle by too many VCs, most of whom should have known better.

And, while it is right for Sequoia and Conway to sound the alarm, I expect all the VCs who touted loudly will now climb aboard this somber bandwagon.

Because, after handing over too much money to start-ups like drunken sailors on shore leave, it is apparently now Sunday morning and time for a little salvation.

But not completely, of course, since this is still an industry where the dreams of hitting it big never die.

After I jokingly called Conway “Oh voice of doom and gloom” after reading his email, he quickly wrote back: “NO WAY DOOM AND GLOOM. I think innovation in the Valley will continue to thrive and I will continue to invest.”

Of course, Conway will. It wouldn’t be Silicon Valley if he didn’t.

And to raise your spirits from these wet-blanket VCs, here’s a video of Mike Settle singing the classic “What Shall We Do With the Drunken Sailor”:

Now, apparently, it is time to meet EQAL, a “social entertainment company” that is still essentially the two guys–Greg Goodfried and Miles Beckett (pictured here. left to right)–who dreamed up LG15 and also the KateModern Web series.

Except, rather than operating out of their homes on a wing and a prayer, they are now armed with $5 million in funding.

That investment in the Sherman Oaks, Calif.-based start-up, which was announced in April, included some true Silicon Valley luminaries, such as entrepreneur Marc Andreessen, investor Ron Conway and former Googler Georges Harik, as well as Conrad Riggs and Spark Capital.

Sources also said Google’s (GOOG) Marissa Mayer is one of the new investors in EQAL.

With its small pile of cash, Beckett and Goodfried are planning new online shows–one of which will debut in September–as well as a number of other things, in yet another attempt to create a successful mesh between Hollywood and technology and thus yield a lucrative and lasting interactive hit.

If anyone can give it a try, it would be this pair, which unleashed LG15 upon the unsuspecting Web population in mid-2006.

Unsuspecting, largely because most people at first thought the user-generated-looking online video of the incessant jabbering of its attractive female lead right into a computer’s camera was real.

Instead, it was actually the “story of a group of young adults fighting against an evil secret society, the Order, that uses the blood of girls with a rare blood trait to extend the lives of a small group of Elders.”

And they also used Neutrogena products while doing it! (The skin care company was an early sponsor, and a scientist from Neutrogena was also written into the story.)

So with clean faces and over the course of its two-year run, LG15 ran to more than 550 episodes with 100 million views.

Beckett and Goodfried also launched KateModern on the Bebo social network in the U.K. a year ago, which also just concluded.

The “story of a group of British young adults investigating a creepy, New Age religion called ‘The Hymn of One’ that is actually a front for the Order” garnered 50 million views.

Well, it’s all disorder now, as EQAL tries to keep the hits coming without LG15, by working with writers, producers, media companies and advertisers to create new interactive shows that also have engaged online communities.

EQAL’s motto: “The Show Is Everywhere.”

Well, we’ll see, but here are Beckett and Goodfried–the former was a physician and the latter a lawyer in their previous lives–giving me a tour of their new office in Los Angeles’s “Valley,” and also sitting for a longish video interview about where content online is going.

That’s a question a lot of people in both Hollywood and Silicon Valley hope they can answer.

Here’s the video: