It seems like in the past few months Google has relentlessly released new applications, some of which perhaps could have used some more baking in the oven before they were unleashed on the general public. To some it's becoming a tiresome exercise simply to try to keep up with everything that Google is doing week in and week out. But there is a method to the madness, and it has a lot more to do with Google's bottom line than you may think.

We all know that the way the search engine giant makes money is through advertising - over $23 billion in 2009 - but what may surprise you is that its advertising-based revenue comes almost exclusively from sites that are owned by Google.

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Guest author Daniel Cawrey is a freelance writer and tech enthusiast, among other things. You can check out his latest musings in blog form at thechromesource, where he writes about Chrome browser, Chrome OS and just plain Google in general.

Ever increasingly, Google is relying on itself to make money through its own real estate - places where it can position the ads that advertisers purchase. This is a concern for publishers that rely on Google for revenue through Adsense because there has to be a point at which this is no longer a profitable exercise for the company.

If it reaches that point, Google will essentially be subsidizing publishers. And it may not have a choice but to keep doing so. Because without fresh content creation, what is there for users to search for on the Internet that is of value? The main tenet of the search business is to provide quality results, and while that may be the case now, if publisher's Adsense revenues were affected, one can wonder what kind of effect that would have on content.

So although Google may have made some mistakes with applications like Buzz, along with the half-hearted emergence and now slow death of features like Gears, expect them to continue to increasing space for content to grow, even if that means one of several strategies:

An experimental program has been announced whereby Google will provide gigabit service via fiber directly to homes in select markets. Interested municipalities and community organizations are encouraged to submit a proposal for this right. At the World Mobile Congress, CEO Eric Schmidt talked about the goal of this program being purely experimental, which means showing infrastructure operators such as cable companies that this is possible, rather than Google becoming a full fledged ISP. But once the fiber has been rolled out, it doesn't roll back in, does it? How long does the "experiment" last?

Google's Chrome browser is getting a lucky break over the next few weeks. That's because Windows users in Europe who use Internet Explorer will be getting an update to their machines notifying them about browser choices that they have. This is in response to the European Union's ruling that Microsoft's practice of bundling Internet Explorer with Windows restricts competition. While the update offers many browser choices, the result will be a boost to market share for Chrome. It has steadily grown in popularity and already has roughly 5% of the market since emerging in 2008.

We've seen this already with Android, and it appears that the no-cost operating system has basically saved Motorola from a fall to obscurity with its release of the Droid. Expect to see more of these developments as 2010 unfolds with Chrome OS attempting to break into not only the netbook market, but also tablets and smartbooks, which fill the gap between a high end mobile phone and a netbook.

So when you hear these new announcements of applications and services that Google rolls out, think of content. Think of how they can better deliver information to users. They want it to be as easy and as seamless as possible. While sometimes these initiatives don't always work out, they aren't going to stop trying.

Aol launched Lifestream, a social aggregator and publisher, as part of their AIM platform at TechCrunch50 Last Fall. Since then it has gained nearly 2 million users, say Aol. Based on that success Aol is now launching Lifestream as a standalone product at lifestream.aol.com.

Like Friendfeed, Lifestream aggregates a number of third party social networks – Facebook, Twitter, MySpace, Foursquare, Delicious, Digg, Flickr, YouTube, etc., so if you follow a Lifestream user you’ll see all of the content that user publishes on those networks, and Lifestream automatically pulls in content from people you already follow on those various social networks, so you don’t have to create yet another new friend list. Lifestream isn’t yet integrated with Google Buzz, but Aol says it may be coming soon.

Users can filter out content from specific networks if they like, on a per user or broad basis. A way to think about this – “noise cancellation for social networks.”

Lifestream also lets users publish back to social networks. Status updates posted to Lifestream can be posted back to Facebook, Myspace and/or Twitter. Lifestream also optionally notes your location in your status updates via GPS on mobile devices, or you can manually add it instead.

That’s not it though. Users can sign in to Lifestream using their Facebook account via Facebook Connect, making it unnecessary to remember separate account and credentials for the site.

You also have a variety of choices in how you use Lifestream. You can access it via the website, an AIR application, or via iPhone and Android applications. As I said above, the mobile applications are particularly useful because they auto-note your location for easy check-ins, and you can post pictures you take from the phone.

That mobile version of the product is what excites me most. You can see where your friends are checking into on, say, Foursquare, click through to a place page and then go there yourself and check in. And Lifestream allows you to follow places just like people, so you can see whenever someone checks in to your local cafe or bar. That ability to follow places is probably the single best reason to use Lifestream.

The Lifestream product is simple, intuitive and really, really useful. Frankly it’s what Google Buzz should have been – both an independent social network on its own, but very deep integration into all of the other social networks you are likely to use daily. It’s nice to see actual innovation coming out of Aol.

A new study from security firm Barracuda Labs provides some interesting insights into the state of the Twitterverse. Unfortunately for the microblogging startup, the stats say that most of its users aren’t very active.

The study looked at around 19 million Twitter accounts (PDF) in order to figure out how people are using Twitter. It started with one assumption: An active or “True” Twitter user has at least 10 followers, follows at least 10 people and had tweeted at least 10 times. By that definition though, only 21% of Twitter users are active users.

There’s a great deal of interesting data in the breakdown. Only 26% of Twitter users had 10 followers or more by December 2009, while only 40% were following 10 people or more (in fact, a majority of Twitter users, 51%, were following less than five people).

In terms of tweets, the report estimates that 34% of Twitter users hadn’t tweeted even once, while a whopping 73% of Twitter’s users tweeted less than 10 times. That means nearly all of the tweets on the social network were coming from about one-fourth of the userbase. Power users dominate.

Barracuda Labs also analyzed Twitter’s growth over time, and the numbers are consistent with previous reports that show while Twitter grew like wildfire in early 2009, it has dramatically slowed down in recent months. Going back further to early 2008, the report estimates that the microblogging tool grew by just 0.31%. However, with the quick rise of media coverage and the influx of celebrities such as Oprah and Shaq, Twitter use grew by 20% in April 2009 before dropping off to 0.34% growth in December 2009.

While the news isn’t stellar, it isn’t all bad for Twitter — these metrics are moving in the right direction. A full 79% of users had less than 10 tweets in June 2009, but that number dropped to 73% by December. Eighty percent of users had less than 10 followers in June 2009, but that percentage dropped to 74% by December. If that trend continues, you’ll hopefully see a more diverse and active Twitterverse going forward.

[via MediaMemo]

Tags: Barracuda Labs, followers, stats, trending, twitter

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

It’s tough to get the printer’s ink out of news people’s veins. For many, journalism = printing, and in printing, each copy costs extra. It’s an analog, manufacturing mindset, and one to finally bid goodbye.

Of course, we all know how freely we can fling stories about on the web, but second copy value — and cost — has an evolving business model implication, as the news industry looks for new pillars of support. That business model implication is syndication. Syndication in the old world meant the syndicates — among them, King Features, Universal Press Syndicate and now-put-up-for-sale United Media —and it meant wires, like AP, Reuters, and AFP, all of whom built big businesses on the increasing margin in the second, third and fourth copies of editorial content created and redistributed. Other syndicators (think Lexis-Nexis and Factiva) have built big businesses, selling multiple copies of stories to corporations and governments for their workforces and to schools of every level and size.

Now, we’re beginning to see next-generation syndication embraced by digital news startups, and that’s good news, a good supplement to advertising and sponsorship revenues, to membership charges and conferences.

Take GlobalPost for example. GlobalPost CEO Phil Balboni embraced syndication as a revenue source from the site’s early planning and rollout. “I knew I needed multiple revenue streams to support our business, and syndication of our original content — in a world of rapidly diminishing international reporting — seemed like a no-brainer to me especially given our pricing flexibility.”

GlobalPost now gets about 12 percent of its overall revenue from syndication. It shares its correspondents’ posts with about 30 newspaper, broadcast and other news sites in the U.S. and worldwide. It counts among its clients CBS News, New York Daily News, the Times of India, Australian Associated Press, Pittsburgh Post Gazette and the Newark Star Ledger. Sites pay a monthly flat rate and can use their fill of GlobalPost stories. In addition to web use, print publications can and do use them in print as well.

GlobalPost isn’t alone. Politico added a syndication network, the Politico Media Network, to its bag of tricks early on. For Politico, it’s a multi-pocket pool play, leveraging a related advertising network around the syndication and its own partnership with Reuters.

California Watch, the new initiative of the Center for Investigative Reporting, is figuring out the contours of its syndication business. Early in its life, it has found daily newspapers, broadcasters, start-ups and the ethnic press to be eager customers of its work, with some big stories reaching audiences of two million or more. Early on, CIR has priced its work fairly inexpensively, in the low hundreds of dollars. As it is getting traction, it is thinking of syndication as a key business model and will test pricing models over the next year

The Chicago News Cooperative, the supplier of local news coverage for the Chicago edition of The New York Times, operates on a similar principle, able to sell stories to multiple customers.

The principle here is devilishly simple — but has not been well enough applied. It’s been described from the inception of the Internet: the second copy is free (or really close to free). It’s also part of a basic Newsonomics law, Law #9: Apply the 10% Rule. Let technology do the value multiplication, not expensive-to-hire-and-feed humans.

Every syndication dollar earned is another dollar that doesn’t have to be wrung out of highly competitive advertising markets. Importantly, the syndication dollars derive from what journalism organizations do best: create high-quality content. The big notion: create better-than-good-enough content, the kind of stuff that is beginning to flood the web. It’s another way to affirm worth: the more companies that want to use your content, the clearer the value proposition in the digital world.

So what’s old is new again. In addition, syndication offers the potential of selling beyond traditional media that may offer significant new revenues. For local news companies, established for more than a hundred years or a few months, it’s a destination-plus model. It’s not about readers coming to your site; it’s about getting people to read your content —and get paid for it. It’s also — witness the Politico model — a way to enable an ad network, related to syndicated content. In fact, I can envision a range of locally oriented sites — from the Yelps, Open Tables and Zillows to government sites to niche mom’s and family sites and beyond — that may find use for various kinds of content. The first step for would-be syndicators: inventory and categorize what you have, and talk to would-be customers about what they might want to use.

Some have said that in the digital world, news companies need to think of themselves both as creators and aggregators, doing what they do best and linking to the rest. Let’s amend that: creators, aggregators, and syndicators, doing what they do best, licensing with zest and linking to the rest.

TechStars is an early stage venture fund based in Boulder, Colorado. ReadWriteWeb was given an early peek at historical results data on TechStars companies, which the organization is about to release. The data shows acquisition and failure rates, as well as how many of the TechStar companies have gone on to receive angel or venture funding.

TechStars reports that nearly 6 of 10 of their companies have historically gone on to receive outside angel or venture funding (not including friends or family). Five other companies reported that they are now profitable without outside funding, so overall 27 of 39 (69.23%) TechStars companies have either raised outside funding after the program or bootstrapped to profitability.

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Of the 39 TechStars companies analyzed, 29 are still active (74.36%), 4 were acquired for > $2M (10.26%), 1 was acquired for < $2M (2.56%), and 4 failed (10.26%). One of the companies is listed as "other" (2.56%), but there is no explanation of what that means.

The data that TechStars reports is similar to a recent study by the blog Awesome Zombie, which did an analysis in December of similar early stage venture fund Y-Combinator. Awesome Zombie found data on 145 Y-Combinator companies from a variety of non-official sources, such as CrunchBase, news articles and discussions on Hacker News. It found that 82 Y-Combinator companies are active (24 having received further public investment rounds), 33 failed, 14 were acquired. The rest were stealth, unknown or "other" (e.g. merger or private investment).

The TechStars numbers are very encouraging for early stage companies. Nearly 70% of TechStars companies have raised outside funding or have become profitable on their own, which is comparatively better than the more high-profile Y-Combinator (with the proviso that the Y-Combinator data was unofficial and gathered by a third party).

TechStars attributes this success rate to its "mentorship driven approach." The program also only funds 10 companies per batch, which TechStars says is due to its focus on quality over quantity.

TechStars CEO David Cohen told ReadWriteWeb, "I think that the programs that will ultimately prove to be most powerful for their local entrepreneurial communities are those which follow the mentorship+community formula that we pioneered. It's powerful in so many ways when you get dozens of mentors involved in very hands on, meaningful ways with each company from day one of the program."

I happened to be in Boulder on Wednesday, where Elyssa Pallai and I met with a group of TechStars companies for lunch. The knowledge and passion for web technology exhibited by each person at the lunch impressed me a lot. If this group of young entrepreneurs were representative of the Boulder startup scene, then it's a city with plenty of vitality and smarts.

If you're a U.S. company interested in applying to TechStars, applications for their Boulder program are open for a few more weeks. TechStars also has a new Seattle program starting soon.

Text added to digital economy bill that could block sites such as YouTube echoes almost word for word a suggestion from the BPI

A controversial amendment to the digital economy bill that could block sites such as YouTube is copied almost word-for-word from a draft written by the BPI, which lobbies on behalf of the British music industry.

The BPI confirmed on Thursday that it drafted a letter which was circulated to government and opposition peers containing a suggested draft amendment to the 1988 Copyright, Designs and Patent Act. Earlier this month the Liberal Democrat peer Lord Clement-Jones added the text into the digital economy bill almost exactly as provided as part of amendment 120a.

However, the suggested changes – which won approval from peers and will now be considered by the House of Commons – have come under fire from the heads of the four biggest internet service providers in the UK, as well as the UK chiefs of companies including Google, eBay and Yahoo, who said yesterday that they threatened freedom of speech and could lead to British websites being blocked without due judicial process.

In response, the BPI said that the amendment a "clear and sensible" way to deal with illegal downloading – but not that it had been the source of the draft version.

Today a spokesman for the BPI insisted that the organisation was not embarrassed at the disclosure of the source of the amendment.

"This was a suggestion that we made to the government in 2009, with this wording. This version of the proposal was sent to the government and also to the opposition parties. The government decided it wanted to go a different way. The opposition parties, while not fully agreeing with it, saw it as a good framework for what they wanted to put down," the spokesman said. "We have consistently said that the digital economy bill should have sensible measures to deal with peer-to-peer file sharing."

The BPI's proposed amendment, in a letter dated 8 January, is almost identical to the version put forward by Lord Clement-Jones on 3 March. The key difference is the addition in Clement-Jones's version of questions about national security, and of tests to see whether the blocking of a site infringes human rights and freedom of speech, and whether an ISP has tried to "facilitate legal access to content".

Jim Killock, head of the Open Rights Group, a pressure group on digital rights which opposes the amendment, said that it was understandable that a lobby group such as the BPI would try to draft legislation – but that the Lords were at fault for not querying the source and intention of the amendment more closely.

"The BPI has got every right to do this," said Killock. "The question is why the politicians have said in such a complicated arena that they will take the BPI's ideas wholesale without consulting anybody else."

Killock said that ORG, Consumer Focus and Liberty had all provided draft legislation and notes to politicians for the bill - but that theirs took the form of "probing amendments", whose purpose was to show weaknesses in the draft bill which could then be revised.

"It's the politicians who have been irresponsible here. It shows that they're taking the BPI far too seriously," Killock said.

The BPI spokesman responded: " We made a proposal on this – and as is quite common – used statutory language to convey our point. This is something that all sides in the digital economy debate do." He defended the addition of the amendment to the draft bill: "[the peers] made changes to our proposal which was then tabled by them, debated fully in the House of Lords, before being agreed and made part of the bill."

“You would have to be stupid. You would have to trip to not succeed at this at some point.”

Those words may come back to haunt the former Bebo chief Joanna Shields, now that rumors are circulating that the social network is about to be dropped like a hot potato.

Back when AOL bought Bebo for $850 million, I was already speculating that the social network had slipped from its valuation high of $1.5 billion. Now it appears that the social network has lost users–down from 22 million a month to 14.6 million–and with it, it’s value to AOL.

What’s interesting is the predicament facing AOL. Due to some complex tax laws, it may actually make better financial sense for AOL to just shut Bebo down.

[Rules] let Aol write off the full purchase price of Bebo if they declare it worthless and abandon the asset. With Aol’s effective tax rate of around 45%, that’s $380 million and change in their pocket in taxes that they’d be able to avoid.

Selling Bebo would only help AOL if it had long-term capital gains it could apply any loss against–which it doesn’t appear to have.

Crazy huh? You buy something for $850 million, but can’t even hold a fire sale. It’s actually better to just set it on fire and let it burn!

Foursquare means business. The 1-year-old startup now has a huge brand — Starbucks — using its platform to test out an experimental customer rewards program.

Starting today, frequent Starbucks visitors who check in at retail locations using Foursquare will earn customer rewards. Although there’s no financial incentive or free coffee to begin with, customers can unlock the “Barista badge” after five checkins.

Of course that’s just the beginning; the coffee behemoth plans to use Foursquare as a testing ground for alternative reward strategies and to unlock “the pulse of the experience” for each store.

If you think this is a straight-up play to offer location-based mobile coupons, think again. The New York Times Bits Blog writes that the company is “hoping to use Foursquare to provide even more meaningful prizes, like invitations to special events, photo-sharing or online reputation scores.”

As Starbucks figures out how best to leverage the checkin, we have to step back and appreciate the magnitude of this decision. With Starbucks on board, there’s no question that Foursquare has all the tools necessary to appeal to — and reach — a mainstream audience. Plus, now that a second company (the first was Tasti D-Lite) is tapping into Foursquare as a loyalty program platform, the additional proof of concept will pave the way for other businesses to follow suit.

[img credit: Bits blog]

Tags: foursquare, MARKETING, starbucks

Fits.me, a virtual fitting room for internet clothing retailers based on robots (yes really) has won the European startup competition in Brussels, Plugg.

It’s actually even cooler than it sounds. By creating robotic shape-shifting manakins and testing how people reacted by seeing clothes on the robot with their dimensions, sales actually went up.

Only 7% of all clothing is sold online today, a $36bn market It’s $20bn for computers), because you can’t see how the clothes look on a human body. The fits.me trial with partners showed these pictures of adjustable manakins wearing clothes increased sales three times and dramatically reduced returns by 28%.

Fits.me means customers can try on clothing before buying from internet shops. They can see how different sizes fit their standard size – like in real-world fitting rooms.

The main reason why people do not buy clothing on the internet is the inability to try it on – the virtual fitting room solves this and increases sales. It also reduces returns associated with bad fit, increasing the profits. The cost of returns for a retailer is enormous because of the delay in receiving the returns – most returns are received back after the season has ended. The virtual fitting room solves this single most important problem for the retailers.

Fits.me wants to raise bridge financing of 700k Euro. Check out Fits.me on CrunchBase and DotOpen.

The audience award went to RazWar (Dotopen profile). The razor blade market producers higher and higher prices. RazWar is a slightly crazy but fun ecommerce startup selling shaving equipment to men which is quality but affordable.

You can check out all the videos and presentations from Plugg here.

RUNNERS UP:

“Inbox2 is a premium, connected lifestyle application that brings communication and the people you communicate with into a single, synchronized application on the desktop, web or mobile.”
NOTES: Email is a mess. Social Networks are a mess. inbox2 integrates social networks and email in one with powerful search. It’s launched a desktop app recently and had 25,000 downloads. An iphone app is coming out out. Very nice interface to email and links with social networks. It’s a desktop app but also a web interface. Not Facebook yet but can add easily. Sharing, search, prioritization.

Distimo (website - CrunchBase profile)

“Distimo offers tools and reports to make distribution of mobile apps easy and transparent.”
NOTES:This is a platform for app store analytics. There are now over 35 app stores and no end in site. Mobile developers don’t know which to choose or which one their consumers like. They connect to all app stores and analyse the data. Provide free analytics for app stores with a premium version for proferssionals. No surveys or panels, but market data. No code insert. Free app store analytics for developers. Currently have Blackberry, Ovi, Windows, Plam data Apple Android. Later adding carrier and indie app stores.

In alphabetical order, these are the rest of the companies that presented.

Anewsme.com: “Tired of one page readers at your news site? aNEWSme personalized recommendations engine is here for you!”

Apprupt (website - CrunchBase profile)

“An affiliate network for mobile apps that offers developers the chance to increase downloads, while publishers are enabled to monetize their traffic with relevant content.”
NOTES: This is an affiliate network for mobile apps. App stores have problems as uers can’t find apps and it’s hard for developers to promote their apps. So Apprupt stores feature selections of apps in niches, like financial content. Talking to lots of publishers across Europe.

Collibra (website - CrunchBase profile)

“Collibra brings together social software and semantic technology to close the gap between business and IT, reducing application integration complexity, mis-implementation risks and mis-communication.”

NOTES. Enterprise software company. Large companies use it to define the meaning of their key business concepts. The lack of shared business concepts leads to confusion in large businesses. Social and semantic tech allows companies to agree on the meaning of these defintiions creating a closed loop governance. Works for fast growing sectors like server management companies. Raised 850k Euro so far, Oracle and Deloitte are first customers.

Datpresenter (website - CrunchBase profile)

“Datpresenter provides learning and training software for professionals. Our platform is a hosted (SaaS) or installable next generation WebTV and Intranet TV presentation platform for delivery of rich media programmes & webinars.”
NOTES: Powerpoint presentations do not let you see the presenter. So this lets yo have a live presenter. For learning and training. Syncs with any video format.

English Attack (website - CrunchBase profile)

“English Attack! is the world’s first 100% entertainment-focused, 100% free online method for learning English.”
NOTES: 2 billion people what to learn English right now. Most are 15-35 years old. They are the new generation but don’t pay for content and like to do everything in short bursts. They are taught in an old fashioned way. EA is based on entertainment. Very adolescent friendly.

Gigswiz (website - CrunchBase profile)

“GigsWiz, a startup based in Helsinki, Finland is building set of statistics and analytics tools for the music industry.”
NOTES: Analytics tool for the live music industry. Sales of recorded music is going down but revenue from concerts is going up. Market is growing 10% annually. But bands have to make music and travel so they are limited on time. Often venues too big or small. So the idea is to use GigsWiz and choose a place that fits and optimise the time of musicians.

Hipui (website - CrunchBase profile)

“Hipui redefines mobile user experience and app development. We enable sensor interaction and advanced graphics outside native apps. Cross-platform code runs in cloud, which delivers the UI to devices.”

NOTES: Mobile are simple but apps are moving to the vloud. Hipui wants to build cloud computing for phones and let them access the native sensors on the phone, with rich interaction. Then you can build bigger apps. Cross platform. Works as a thin client. Experienced team. 3 patents pending. Product in Alpha.

“Lumo Flow is a seamless collaboration environment for businesses. Share documents, have discussions and get projects done. Secure and reliable.”
NOTES: Team collaboration made simple.

“Sclipo offers affordable & easy web learning apps integrated with social tools for millions of teachers & small organizations, who can not afford expensive and complex eLearning solutions.”
NOTES: Creating elearning web academies with video and live people. You “Rent” a Web academy and teahc people. Aim to make $100m from 1,000 academies.

Shotools (website - CrunchBase profile)

< "We help professionals to embrace social media as part of their organization."
NOTES: Another platform for social media analysis.

Smarkets (website - CrunchBase profile)

“Smarkets is a simple, smart way to bet on your favourite events.”

NOTES: Simple social gambling web site. Political site going live soon. See here for an extensive review.

- Stupeflix (website - CrunchBase profile)

“Stupeflix brings groundbreaking innovation to the online video world by providing the fastest, most scalable, flexible and affordable way to create high quality video content on a massive scale.”

- Submate (website - CrunchBase profile)
NOTES: Engage your users with a movie. Embed video created from content on your site. You have titles, ratings, revies, descriptions. Just add some small javascript code and you can create a video from the content. Great conversion rates on existing content and increases engagement. Fascinating.

“SubMate is social commuting: save your regular commutes and discover all the people you see everyday.”

- TweetMeme (website - CrunchBase profile)
NOTES: Foursquare gowalla are all very well but this is simpler. You just save the regular commuting trips you do and you are done. Its Foursquare for the rest of us. Launching today.

“TweetMeme provides the top retweeted stories as shared by users on Twitter & aggregated by category or channel. We also have the most used retweet button on the web! To find out more visit our site.”
NOTES: Customomised channels. Creating an advertising panel. Ad tweets are tweets inside videos or images. Sponsored definitions – define a product or brand. Featured tweets ads.

Start-ups that offer users big discounts via socially-charged local group-buying services are getting a lot of attention these days, especially from venture firms.

Today, it’s Washington, D.C.-based LivingSocial, which just announced a $25 million Series B round, led by U.S. Venture Partners.

The funding will be used to expand its footprint of cities, among other initiatives.

Sites such as LivingSocial feature a “daily deal” with a huge discount from a wide range of local businesses, such as restaurants and spas. They use social networking sites like Facebook and Twitter to turbocharge consumers into action.

This kind of thing has been tried before, of course, centering on users who group together to get discounts on items by purchasing them in bulk.

In Web 1.0, there were many group-buying sites, most of which failed badly. One of the more high-profile ones–Mercata–got $90 million in funding from investors, including Paul Allen’s Vulcan Ventures.

Still, the group-buying space is getting mighty competitive of late. Recently, Chicago-based Groupon grabbed $30 million from, among others, Accel Partners.

BoomTown, in fact, did a video interview with Groupon founder Andrew Mason last week, after which I was inundated with press releases from a half-dozen wannabe competitors.

Ironically, for businesses based on discounting, there seem to be no price cuts when it comes to group-buying start-up funding.

Here’s the full press release:

Social Commerce Leader LivingSocial Raises $25 Million Series B Round, Led by U.S. Venture Partners

Funding to Fuel Expansion to Dozens of Cities by Year End; Chicago, Denver, Raleigh Durham, and San Diego launch today

Washington D.C., March 11, 2010–LivingSocial, the social commerce leader behind LivingSocial Deals and top Facebook applications Visual Bookshelf and Pick Your Five, today announced that it has completed a $25 million Series B round of venture funding led by U.S. Venture Partners, with Grotech Ventures and Steve Case’s Revolution, LLC participating. With this round of funding, LivingSocial Deals is launching in four additional cities: Chicago, Denver, Raleigh Durham and San Diego, making the program live in 13 markets across the country, growing to dozens of cities by year-end. By signing up for LivingSocial’s free daily online service people are saving an average of 50-70% at their favorite places, such as the hottest local restaurants, spas, sporting events, hotels, and other local attractions, giving local merchants the Web prowess of viral marketing proven through LivingSocial’s explosive Facebook success.

“With more than a million people already using LivingSocial Deals, online group buying is a movement that is clearly resonating with consumers,” said Tim O’Shaughnessy, CEO of LivingSocial. “This round of funding enables us to accelerate our growth throughout more cities and combine our feet-on-the-street approach with our social channel expertise to offer our 85 million customers great deals at local businesses, while giving merchants a no-risk way to get customers through their doors.”

LivingSocial is the premier local activity discovery engine–the place where anyone can find out what’s “hot” in and around their city. As a result, it not only gives local merchants an innovative way to reach nearby customers, but also leverages LivingSocial’s unprecedented social media knowledge to grant merchants access to the company’s extensive community of more than 85 million people. With LivingSocial, merchants get the viral power of the Internet, the reach of the LivingSocial community, and the leverage of the iPhone platform.

LivingSocial today also launched an affiliate program for sites large and small, producing a revenue opportunity for affiliates, such as blogs and other sites, and broadening the advertising reach for merchants to the farthest ends of the Web. LivingSocial affiliates can generate revenue by delivering amazing discounts targeted to their loyal readers. Creating a centralized affiliate program gives participating merchants reach into new media, without requiring them to create, develop and manage individual relationships with an ever-growing cast of bloggers or other local content sites. More information can be found at http://livingsocial.com/affiliates.

“Local merchants deserve the ability to link online advertising spend with store visits, not just site visits,” said Ted Maidenberg, Principal at U.S. Venture Partners. “LivingSocial is at the forefront of a profound shift in the way local merchants engage with new and existing customers. This investment will allow them to continue to evolve the program and reach new markets so more merchants can reap the rewards of what LivingSocial has to offer.”

LivingSocial’s group buying service has grown rapidly since its launch in August 2009, expanding from Washington, D.C., to New York City, Boston, Atlanta, Austin, Seattle, San Francisco, Los Angeles, the Twin Cities, Chicago, Raleigh Durham, Denver, and San Diego, with more cities rolling out in coming months. Also, with the first social savings iPhone application, LivingSocial users can get savings on-the-go and be alerted when new deals are available through push notifications and even redeem directly from their iPhone. LivingSocial users throughout the country have already saved millions of dollars, with tens-of-millions more on tap throughout 2010.

“We’re really excited to bring LivingSocial to Chicago, Denver, Raleigh Durham and San Diego as these markets have such vibrant populations,” added O’Shaughnessy. “The deals we offer reflect the diversity and unique nature of each city, encouraging the exploration of nightlife, culture, entertainment, and outdoor activities.”

For more information or to sign up for your city, go to http://livingsocial.com.