If you thought Groupon's $950 million was big, hold on to your hats. Facebook has announced that it has raised $1.5 billion in funding at a $50 billion valuation.

According to the release, the company has received $1 billion from Goldman Sachs Overseas Offering today, which, when combined with the previous $500 million, equals the $1.5 billion investment. Read on for details and a Facebook-led Q&A on the deal.

The release also tries to answer a number of frequently asked questions regarding the investment, which are included below:

Why did Facebook raise this money?

DST and Goldman Sachs approached Facebook to express their interest in making an investment, and Facebook decided it was an attractive opportunity to bolster its cash reserves and increase its financial flexibility with limited dilution to existing shareholders.

Why did Facebook choose to raise $1 billion in the overseas offering?

Under the transaction's terms, Facebook had the option to accept between $375 million and $1.5 billion from the Goldman Sachs overseas offering, at the discretion of Facebook. While the offering was oversubscribed, Facebook made a business decision to limit the offering to $1 billion.

What are Facebook's plans for the proceeds of this transaction?

There are no immediate plans for these funds. Facebook will continue investing to build and expand its operations.

Does this investment mean that Facebook will have more than 500 shareholders?

Even before the investment from Goldman Sachs, Facebook had expected to pass 500 shareholders at some point in 2011, and therefore expects to start filing public financial reports no later than April 30, 2012.

When it was announced that Facebook raised $500 million earlier this month, ReadWriteWeb's Marshall Kirkpatrick took a look at the deal and offered "4 Key Take-Aways from Goldman's Huge Facebook Investment". They still hold true and offer some perspective on what $1.5 billion for Facebook really means.

Enter Angel Investors. They give money, usually their own from previous business successes, to early stage startup companies aiming to create the future of the Internet. They enable inventors to quit their jobs and to build their technologies without immediately worrying about revenue. If there's trouble among the Angels, then the entrepreneurs they help fund and mentor face trouble in their efforts to build the future of the internet that we will all benefit from. Michael Arrington's report of collusion among Silicon Valley Super Angels really is as epic a story as it seems - and if the allegations are true, the consequences could affect everyone in the world.

That's contrary to the interests of the inventor entrepreneurs that those Super Angels are charged with shepherding into the world.

Why Should You Care?

Why should you care? Because the Internet has changed your life, and we're only at the very beginning. And each new innovation needs financial support.

World leaders used to have to ride a horse for days to visit a library that held less information than we can all now access in moments with an inexpensive device we carry in our pockets. Angels funded the early development of the systems that made that possible. Ron Conway, now the most prominent Angel investor in tech, was an early investor in Google. Humanity is fortunate that Google's early investors like Conway didn't sabotage its development out of short-term self-interest.

Anyone can now publish text, photos, audio or video, live in real-time even, to any number of people all around the world. Those publishing tools were born in part thanks to the money of Angels, who helped them become real and popular before worrying about how to make money from a communications revolution.

The otherwise unknown people around the world who use free blogs to expose the injustices committed by authoritarian governments? Those people are fortunate that when O'Reilly invested ten years ago in Pyra Labs, the company that made Blogger.com, that backing didn't come at the expense of Pyra's ability to innovate.

Aggregate activity of all these systems can now be analyzed to capture everything from real-time global self-awareness to instant personalization that would have been unimaginable in all but very recent history.

The next step will be machines talking to machines talking to the internet - your refrigerator will be your next friend on Facebook and its newsfeed will update when it has trouble using electricity efficiently or no longer contains a carton of eggs. More importantly, city streets will report to the web about what happens on them, inequitable delivery of public services to different populations will become clear as day when all the data is online and the illumination of new problems will foster the creation of new solutions.

Entrepreneurs will build those systems, and Angels will fund their doing so.

So it's very important that Angel Investors not act contrary to the interests of the entrepreneurs building the future. Because the rest of us all want that future to be developed as well as possible.

Not all important innovation comes from Silicon Valley, or is invested in by Valley Super Angels - but that is the case for a lot of it.

That's why the story of AngleGate is a story of alleged injustice being done not just to competitors of these particular investors, or the startups that seek their funding. It's a story about Super Angels acting against the interests of anyone whose life might be touched by the future of the Internet.

Photo by Joi Ito.

"We're growing very quickly and we're very happy with the uptake," Trada founder and CEO Neil Robertson told ReadWriteWeb. "Google Ventures looked at our businesses and the assessment was that our growth was interesting to them."

New Cash, New Goals

The $5.75 million C round brings Trada's total fundraising to just under $8 million. Robertson says the company has been extremely tight budgeted thus far, spending just $2 million over the last two years. The sudden influx of cash will give the company breathing room to expand and try some new things, he says.

First, the company plans to help provide improved and tailored services to both its large agency customers and its smaller business customers. Secondly, it will expand internationally to run campaigns in more countries. Currently, Trada accepts international customers and experts in the U.K., Australia and Canada, but has yet to brand out to non-English speaking countries.

Lastly, as part of the company's long-term goals, Trada is looking to extend its crowdsourced PPC ad model to other forms of online advertisements. Robertson says the company started with PPC ads because of the obvious crowdsourcing benefits to keyword campaigns. Now the company realizes that other ad styles - including display, banner, mobile and video ads - can also work on this model. The company also expects to allow for campaigns on newer ad platforms, like Facebook and Twitter in the near future.

The Google Bump

Google piece of the funding comes from Google Ventures, the company's investment arm. Rich Miner, one of the original co-founders of Android, has been on boards with Robertson in the past and now manages the Google Ventures fund. Miner joins Robertson and Foundry Group's Seth Levine as members of Trada's board.

While the connection between Google and Trada is an easy one to make, Robertson says that not preferential treatment is given to any of the search giant's investments. As Robertson added, Google likes to make sure that "all boats rise with the tide" when it comes to its investments. The relationship will also not affect or limit the services which Trada offers to its customers, said Robertson.

The fresh cash certainly puts a smile on the faces at Trada, but out of everything, Robertson is most excited for the crowdsourcing community at large.

"We're really happy to have another significant venture firm taking a position in the crowdsourcing ecosystem," said Robertson, who heads an information group of similar companies known as the Crowdsortium. "It's a good sign to see larger tech companies in the evolution of this industry."

Photo by Flickr user horiavalan.

This idea came about through conversations with people in the AR industry, and also watching presentations and discussions from just about every high profile name in the biz. Some of the thought leadership and insight into AR and its future is just mind blowing. But therein (partially) lies the problem. People in the AR industry (ourselves included at Zugara) tend to talk more about the what ifs than the how and when.

• How can AR be monetized right now? If not now, when?
• When will AR start showcasing true utility and practicality over endless gimmicks?
• How and when will AR become integrated into our daily lives?

Most of these questions are discussed from the what-if end, which results in a lack of investment into the AR industry. Despite the hype for AR, social gaming services like Zynga, location-based-services like Foursquare, and a host of other emerging media and technologies are garnering all the VC and startup capital. So why does AR still have so little respect from the investment community while these other emerging technologies get all the monetary love? Why is Marcia getting all the attention while Jan isn't? Having met with a few VCs, here are my thoughts:

• AR overall is cool but also seems very gimmicky. This hasn't been helped by the recent onslaught of marketing-based AR initiatives that have no long term value and are really just quick PR grabs by brands. Though there is value in owning the proprietary tech - and, in turn, licensing revenue - it's not sustained revenue that will attract major investment.
• Despite AR being a hot technology for almost two years now, there's very little in regards to stats, analytics or other measures to show that AR itself is a technology that helps to increase purchase intent and decision-making, raise brand awareness and so on. Where are all the AR leaders with case studies on past campaigns and general AR stats?
• In VCs' eyes AR is still struggling to break from the academic and research realm and into bona fide businesses. As a result, you'll commonly hear this from VC's: "AR is still too early stage." Really? More early stage than Foursquare?

To break out of the Jan Brady complex, the AR industry must be able to define, from a investor point of view, what Augmented Reality is. Is it a technology that will be integrated into location-based-services platforms like Foursquare, or is it a platform that will incorporate location-based services and real-time ads? Or will it be a hybrid of the two? That is a key question since there's quite a big difference between a technology that's cool and a technology that can be monetized.

Searching for other emerging technologies and efforts to monetize them garners the following results:

• Microblogging Monetization: Twitter Plans To Monetize Search, Google Adwords-Style, 432,000 results
• Social Games Monetization: Social Gaming Execs Discuss Growth, Monetization, And The Future Of Facebook Games, 181,000 results
• Location-Based Services Monetization: Foursquare Sets Sights On Monetization, Launches Local Business Dashboard, 34,000 results

Do the same search on Google for "Augmented Reality Monetization" and you get 28,000 results - most of which direct you to general mobile marketing-based monetization efforts. The only recent article of note is around Layar and its plan to monetize its technology through a store.

I've never seen more passionate people at conferences than those who are 100% behind AR (and I've been to a lot of conferences over the years for new and emerging technologies). But what we as an industry need to do is to start connecting the dots better for not only investors, but for companies that are looking for more than a spinning 3D model off a marker. Once companies start seeing the true value and utility in AR then there will be kind of long term investment that will connect the dots for VC and jump-start investment capital.

Until the AR industry can start proving that it's an emerging technology of the future that can be monetized in the present, every time someone complains about the lack of respect all I'm going to hear is "Marcia, Marcia, Marcia!"

The core product at LOLapps is actually two things: a quiz creator and a gift creator. You may not have much use for these types of applications yourself, but then, you would be in the minority. When it comes to social networks like Facebook, gifts and quizzes are some of the most popular activities taking place.

With the LOLapps tools, you're walked through a step-by-step process which allows you to create your very own custom gifts and custom quizzes which you can then share with your friends.

Essentially, the LOLapps application turns everyday users into application developers - without the user ever really knowing that's what's going on. With clear instructions written in casual, conversational language, the LOLapps building tools hop users through the somewhat convoluted and complicated steps (at least that's how they would appear to an end user) necessary to register as a developer on the social network and get the application published.

For now, the company says their business model is similar to that of a website-creation tool from ages ago: Geocities. Back in the early Web 1.0 days, users could create their own web pages at Geocities and the company made money by showing ads on those pages. LOLapps is working pretty much the same way today, except now the ads appear in apps, not web sites. LOLapps is also using virtual goods to drive revenue in some company-created applications but they will not be inserting those paid goods into the apps created by users themselves, LOLapps CEO Kavin Stewart tells us.

If you want to get a feel for what kinds of applications are being built with the LOLapps tools, we asked the company for the top apps, both quizzes and gifts. Here are the results - do any of these sound familiar?

Top 10 Quizzes

1. What Is Your Future Life?
   URL: http://apps.facebook.com/futurelife/
2. What Greek God are you
   URL: http://apps.facebook.com/what-greek-god-fdde/
3. What Type Of Heart Do You Have?
   URL: http://apps.facebook.com/whatheart/
4. What's Your Best Quality?
   URL: http://apps.facebook.com/bestquality-asdf/
5. Which movie star are you?
   URL: http://apps.facebook.com/whatmovie-asdf/
6. What type of person do you attract?
   URL: http://apps.facebook.com/attract-asdf/
7. What song are you?
   URL: http://apps.facebook.com/what-song-are-jcge/
8. What will your Daughter be named?
   URL: http://apps.facebook.com/what-will-your-hfie/
9. What video game character are you?
   URL: http://apps.facebook.com/what-video-gam-bhdb/
10. What Kind of Music Are You?
    URL: http://apps.facebook.com/musictype/

Top 10 Gifts

1. Guardian Angels
   URL: http://apps.facebook.com/guardian-angel-iibg
2. Because You're Special
   URL: http://apps.facebook.com/because-your-s-badgc
3. Friendship
   URL: http://apps.facebook.com/friendship-ciabh
4. Pinky Gifts
   URL: http://apps.facebook.com/yildizs-gifts-djah
5. Childhood Memories of the 80s
   URL: http://apps.facebook.com/childhood-memo-jhcf
6. Strawberry Gifts
   URL: http://apps.facebook.com/strawberry-gif-bggdd/
7. Girly Girl Gifts
   URL: http://apps.facebook.com/girly-girl-gi-geheh
8. Forever Friends Bears
   URL: http://apps.facebook.com/forever-friend-fbgi
9. SUSHI
   URL: http://apps.facebook.com/sushi-ifia
10. CHOCOLATE!
    URL: http://apps.facebook.com/chocolate-bbghb

I've enjoyed using Kwiry to text myself reminders and then subscribe to the RSS feed of items I sent in my Netvibes dashboard. When the service first launched it sent you an email with search results for the text of reminders you sent yourself by SMS. You could add movies to your Netflix queue using Kwiry and SMS. Other people did all kinds of things with it, like use it to turn off their computers remotely. In the end, it looks like only a few thousand people probably used the service regularly at all.

$1 million isn't that much for a software startup, and perhaps working with SMS made the money go even faster, but poof there they go awfully quick!

It's great that the company is offering .csv downloads of customer data but that's only the case for the next 10 days. We hope anyone who needs it will come and get it within that time frame.

The lesson here could be that you could build a full-featured service, get some money from respected investors and still see your whole endeavor go up in smoke one year later. None of the reminder services online are catching on like the huge breakout hit born from SMS, Twitter, is. Twitter serves a universal need that's more fun than remembering obligations (communicating with people) and it's dead simple - all the bells, whistles and do-dahs are built by 3rd parties and are fully opt-in, not at all confusing.

It's too bad about Kwiry, though. We wish the team there well in their next endeavors.

The new Zoho Chat 2.0 is no dumbed-down client. It offers most of the features that you have come to expect from your IM desktop applications. You can send files, record your chat history, customize your theme, and more - just like regular IM apps allow. It does a few cool tricks, too. For example, you can type in a new event in the chat bar at the bottom of Zoho Calendar to create a new appointment on the fly. In Zoho Meeting, you can launch desktop sharing with others from within the IM application. (Windows only for now.)

The chat tool is also able to send you notifications from activities that take place within Zoho itself, including document sharing notifications, unread chat messages and more - definitely a handy feature. Future releases for chat include plans to introduce even more IM networks, most notably Skype.

This release represents a major upgrade of the chat application in Zoho. Current Zoho users can try Chat 2.0 here as of today: chat.zoho.com.

The new fund's portfolio currently includes the most popular Twitter client, Tweetdeck (also funded by a constellation of other small stars), Lindzon's Twitter for stock tips service StockTwits and WallHogs, a bizarre company that prints over-sized vinyl wall hangings from user-uploaded images. Who will Social Leverage back next? We can only wonder, but it's sure to be interesting.

The fund describes its strategy in part via its past success. "We've taken traditional business models (ranging from finance to video to entertainment, media, and more) and transformed them using social networking and internet media." Lindzon in particular deserves a sympathetic ear since he did figure out how to create a web video content company from scratch and turn it into acquisition bait for a huge old media company. The show was reportedly sold for $5 million in May of 2007 but was shuttered by CBS last month. Toward the show's final days it tended to be heavier on the cleavage than on the financial news or analysis anyway. A slogan on the bottom of Lindzon's personal blog reads "Due Diligence is for Underperformers."

Social Leverage says it will provide the companies it funds with everything from user acquisition to revenue stream generation to help with financial filings. Presuming all parties can get along well enough, we expect that the fund will act as an all-around ally to its portfolio companies in ways that more traditional funds do not.

Both StockTwits and Tweetdeck seem to us to be as exciting an investment in a Twitter app as there is likely to be, though we're not sure what to think about the wall hanging company.

We look forward to seeing Social Leverage in action and eagerly await announcements about which crazy ideas the fund gives a financial lifeline to in the future.

In M&A transactions, most of them occurred in the consumer sector of online media - 329 transactions, representing 46.5% of the total transaction volume in 2008.

The 2008 reported M&A deal value by sector:

• Consumer - $6.2 billion (36.7%);
• Business - $4.8 billion (28.4%);
• Mobile - $592 million (3.5%);
• Enabling - $2.5 billion (14.6%); and
• Commerce - $2.8 billion (16.7%).

In terms of venture capital, in 2008 $3.5 billion flowed into all sectors of media according to Peachtree. This was a 22% increase over the $2.9 billion in capital raised in 2007 in this sector. Peachtree stated that the "Enabling" category had the largest increase in the amount of capital raised, up 124% with $892 million in 2008. The Mobile sector also saw big gains in investment capital, with $341 million in investment capital in 2008 - a whopping 488% increase over the $58 million raised by that sector in 2007.

The consumer category was the biggest, with 48% of capital raises.

The top five sectors in terms of volume of transactions (not reported deal value) for equity raises in 2008 were as follows:

• Video & Online Games - 59 capital raise transactions;
• Social Networking - 57 capital raise transactions;
• Web Applications/Enabling/IT - 47 capital raise transactions;
• Mobile - 35 capital raise transactions; and
• Blogging/User Generated - 27 capital raise transactions.

It'll be interesting of course to see how the M&A and investment sector pans out in 2009. There were 27 capital raises in 2008 in the Blogging/User Generated sector alone, and I can't imagine there being that many in 2009. Tell us your thoughts in the comments.

Can't FriendFeed find a way to save their information-addled users by providing real-time updates without hitting refresh every five seconds? Yes, they can. And it turns out that, not only is this new feature good for you, it's good for FriendFeed, too.

But what does FriendFeed's technological experimentation mean to you? Real-time FriendFeed updates. Without having to hit refresh.

Here's an example of the updates in action:

And I have to admit, it's a whole new way to consume FriendFeed. It's not only fast, it's addictive. But don't take my word for it. Head on over to the 2008 Debates room and see it in action for yourself. (It should get even more interesting once the debates are broadcast in the US, tonight.)

How does FriendFeed accomplish this addictive feature? They're experimenting with a technique called "long polling." In FriendFeed's words that means that their server "doesn't respond to your browser's request until there's something it wants to send."

There's an upside for the users and an upside for FriendFeed, as well, since they can now "show your FriendFeed faster using far fewer requests than before."

And fewer requests are good for everyone.

While the feature is only in testing, it's clear to see how this type of long polling could be applied to other services - and to our information consumption on the Web. For a medium that has long been about active engagement, technology is rapidly pushing it into something more passively consumed. Watching - and I literally mean "watching" - the impact of that change occur will be interesting indeed.

Integration with WordPress

PollDaddy and WordPress were already working on integrating PollDaddy into the WordPress.com platform, and, as PollDaddy's founders put it, "in the end, it just seemed like the perfect fit for us to join them." As has been the standard for Automattic's acquisitions, PollDaddy will continue to operate as a standalone platform and the company will continue to support and develop it on other blog and social networking platforms.

WordPress.com has already integrated PollDaddy's functionality for its users, who can now easily add surveys to any blog post, which will surely give PollDaddy's user numbers a significant boost. Automattic is also making a PollDaddy plugin available for self-hosted WordPress blogs.

Here is a short overview of how the WordPress.com integration works:

A major German publisher, Bertelsmann, has announced plans to print a book called "The One-Volume Wikipedia Encyclopedia," which goes on sale this September for 19.95 euros (around $32 U.S.). The book will feature some of the year's most popular articles. Says Dr. Varnhorn, the editor in charge of Bertelsmann's reference works, in a recent NY Times article, "We think of it as an online encyclopedic yearbook." A statement that foreshadows the possibility of this book becoming the first of many annually printed editions.

Is this legal? Yes. Apparently, the material on the Wikipedia site is free for use given that you cite Wikipedia as the source. In addition, Bertelsmann will pay the foundation one euro for every copy sold.

But where does this leave the scores of writers who voluntarily gave their time to help in the creation of an online reference, something which they had believed to be a noble effort? Mark O'Neill of Now Sourcing believes he knows exactly where this leaves those writers: ripped off. He writes:

"Wikipedia is ripping them off big-time. No, in fact, let’s not beat around the bush here. Let’s say it for what it really is. Wikipedia is SHAFTING THEM....Had they known that Wikipedia would then use their work in a commercial printed venture, I’m sure they would have had second thoughts about writing those articles. At the very least they would have demanded a contract and perhaps a guarantee of financial compensation later." 

Some of the commenters on his post disagree. As one points out, there is no rip-off - Bertelsmann will be selling the content legally under the terms of the GNU-FDL license, which makes it perfectly OK.

But let's be honest here, if the writers thought that the content they were contributing was to help a commercial publisher make a buck, and not part of a movement to "let information be free," would they still have given so much of their time on a volunteer basis?

It's one thing to see Wikipedia distributed to the developing world, like when SOS Children's Village, the world's largest orphan charity, distributed Wikipedia CDs to Africa, but it's quite another to know that you're making money for someone else...for free.

To Arne Klempert, though, executive director of Wikimedia Germany, "It is not about the money. It is a very good example of the power of knowledge." That may be true, but Bertelsmann won't be making deposits of "knowledge" at the bank, will they?

• Even more of my contacts have connected on LinkedIn (even technology conservatives are joining).
• I have used it for recruitment as well as business development, with some success as reported here.
• LinkedIn now provides an RSS feed into my start page, so I can quickly scan what my contacts are doing, adding a touch of serendipity as well as pure curiosity.

My experience on Facebook has been light. Recently Dave McClure invited me to connect on on the site -- o that is not a picture of me kneeling in obeisance to a Valley mover and shaker -- and this experience got me thinking about differences/similarities:

• Similar. Both try to get you to use their messaging. That is such a retrograde step. Why would anybody use a proprietary email system that is limited only to that service? I have occasionally used LinkedIn messaging but only because I had no other alternative. If that person is a genuine contact, then I have their email address, why would I use anything else? One semi-plausible reason is spam control, but Gmail has got that issue pretty well nailed in my opinion.
• Different. Facebook prompts public communication e.g the Wall. That is fun/different I guess. I also assume it gets old fairly quickly. What is the business value? We are talking deals, not dates here. In business this is like online whiteboard services, used for collaboration. Do I need to be on Facebook to do that?

I think the case for Facebook rests on all the cool guys entering the workforce who won't use anything else. So, to reach them you gotta be on Facebook. Is that it? Is Facebook a tool to recruit people coming out of college?

As you may have guessed, I am still of the opinion that LinkedIn is the better tool for business.

What do you think?

LinkedIn's value to users is clear; their value as a business, however, is less clear. But that may be due to the fact that they are a private company and so there is not any hard data to go on. Xing, the European alternative to LinkedIn, is public and recently published their quarterly results:

• Record quarter: Total revenues increased by 91 percent to 7.51 million euros (~$11.6 million)
• EBITDA increased by 500% over Q1/2007
• Number of Premium Members increased by 60 percent within one year to 420,000

Thats pretty impressive. It would be interesting to see the numbers LinkedIn is probably floating around as various unsubstantiated rumors say that they are looking to:

• do an IPO, or,
• sell to News Corp. or somebody else, or,
• raise another round

Which just about covers the strategic options.

USA Today, apparently with a source at LinkedIn, or at least not denied by LinkedIn, says:

"With more than 1 million people joining each month and projected 2008 revenue of $75 million to $100 million, LinkedIn Corp. seems likely to deliver another big payoff for [founder Reid] Hoffman."

That is heady growth, which would make any of the above strategic options viable. But this is a projection. To compare with Xing one would need to see last quarter revenue (about $11.6m for Xing). Take that $11.6m for Xing and multiply by 4 and you get an annual run rate of $46.4m. If they keep up their current 91% growth rate that would put Xing right around where LinkedIn is projecting ($46.4m + 91% = $88.82m). So, as we reported back in March, it is a two horse race for global online business networking. It is possible that Xing has actually got their nose out in front.

As we reported back in December, LinkedIn's key asset is a young and rich demographic (younger than Wall Street Journal, richer than Facebook). That's the key to their business.

What would be most revealing would be the number of paying subscribers. Xing reports that, and Xing is clearly profitable. My concern about LinkedIn as a business is that it is too dependent on advertising.

But then so is Facebook. And the key question asked 6 months ago is will Facebook eat LinkedIn's lunch in the business market or will LinkedIn continue to pull ahead in that key segment. You know what this "suit" thinks (Xing is leading by a whisker, LinkedIn is close behind and looking strong, Facebook just fell at the last jump). What do you think?