Update: The leaderboard has launched. See it here.

Blog search engine Technorati’s founding CEO is gone, its traffic party has ended and its core search functionality is under long term fire from competitors like Google Blog Search, Ask.com and Sphere (among others). Constant strategic shifts haven’t helped much either.

But Technorati still has one stronghold left – it controls the definitive, editorially unbiased list of top blogs. The list is based on unique incoming blog links over the previous six months. More links = a higher position on the list. To get a top 100 spot, a blog currently needs about 3,700 unique links.

But links from other blogs may no longer be the best indicator of the popularity of a blog, particularly today when blog links can be obtained by simply opening up the checkbook and paying. Also, Technorati clearly counts spam and other blogs, which can have a significant impact on rankings.

That’s a statement that will be hotly debated. But tomorrow bloggers will have a new top 100 list to aim for – the Techmeme Leaderboard.

The list will be created based on the blogs that created the most headlines on Techmeme over the previous thirty days (so it will change frequently).

TechMeme has become the definitive site for tech blogging news, and its sister sites Memeorandum (political news), WeSmirch (celebrity gossip) and BallBug (baseball news) hold a similar esteem in their markets. It’s about time founder Gabe Rivera started to release some of the great statistical data he’s been collecting since launching the original site in 2005.

To be exact, top blogs will be ranked on presence – “the percentage of headline space a source occupies over the 30-day period.” Discussion links are not taken into consideration – only full headlines are counted.

I think this is a much better way of ranking the very top blogs than the Technorati approach. Technorati has deep flaws, for reasons stated above. Techmeme, by contrast, has zero spam and tends to mirror what the tech blogosphere is writing about perfectly.

I am somewhat biased, however, as TechCrunch is currently in the no. 1 spot, whereas Technorati only ranks it no. 4. Also, our sister site CrunchGear is ranked no. 28 on the Techmeme Leaderboard list.

Look for this sometime tomorrow, and hopefully we’ll see leaderboards for the other Techmeme sites soon, too. Until then, check out the screen shot above, which only includes the top 30 blogs. Click for a larger view.

So what do you think is the better way of ranking blogs – Technorati or Techmeme’s approach? Or do you have a better idea? (don’t tell us, just build it)

Update: Dave Winer (his Scripting News is no. 36 on the list), posts the entire current top 100 list.

Update 2: Ben Metcalfe points out that a third of the sources on the list are not blogs, they’re mainstream news sites. He makes a good point wrt to how much of an apples-to-apples comparison this is with Technorati. What I think is also interesting, though, is that perhaps its time blogs and mainstream news sources go head to head on lists like these. As a group we are continuing to kick them in the pants.

The list of companies offering free, Web-based word processors just got longer. Today, Adobe is entering the Webtop game (watch out, Microsoft Office) with its announcement that it will purchase Boston-based startup Virtual Ubiquity, the company behind Buzzword. Terms were not disclosed, but Adobe had previously invested in the startup through its $100 million venture fund. Adobe’s new browser-based word processor (Buzzword is currently in open beta) joins a crowded field that already includes Google Docs, Zoho Writer, Glide Write, ajaxWrite, ThinkFree, and . . . well, you get the picture.

But all that competition is not deterring Adobe. “The current Web 2.0 apps leave a lot to be desired,” sniffs Adobe product manager Erik Larson. “They do not live up to desktop apps.” Neither yet does Buzzword. But it does take several new steps toward closing that gap. Built on Adobe’s Flex development platform (which takes advantage of the ubiquitous Flash player), it’s fonts and typography easily match the fidelity of Microsoft Word. (Altough you don’t get as wide a choice of fonts right now in the beta, Adobe should be able to fix that). An Adobe AIR version that will operate offline is also in the works for sometime next year. (Google Docs will have similar offline capabilities when it is integrated with Google Gears, while Zoho has already done so).

“This is not an HTML editor,” points out Rick Treitman, Virtual Ubiquity’s CEO and a former exec at Lotus. “It is the first paginating editor that lives on the web. It is laying out the page and figuring out line breaks.” Buzzword also lets you insert tables and images, see every historical revision of a document, and share it with others. You can invite others to read it, to leave comments, or to edit the document. And, yes, it does have spell-check.

Buzzword’s drawbacks are that it is still slower than a full-fledged desktop application (not so much when typing, but when doing things like cutting and pasting); it doesn’t support hyperlinks (unconscionable for a Web-based app, though this is on Treitman’s to-do list); and there is no easy way to export a document to a blog or other Web publishing system other than cut-and-paste.

Soon, though, Buzzword will be integrated with another Adobe service launched in limited beta today called Adobe Share. This is a file-sharing app that is geared towards document sharing. You get one gigabyte of storage free and you can embed a Flash preview of your documents into any Web page, from which anyone can download and print a PDF (think Scribd or DocStoc on steroids).  Even Microsoft is getting in on the game, accepting sign-ups today to an upcoming beta of an online document-sharing service called Office Live Workspace.

The worlds of the desktop and the Web are becoming more interchangeable every day. Now, if only Adobe could figure out how to turn those documents into actual Web pages, we wouldn’t have to mess with workarounds like embedded documents.

Bay Partners and Bessemer Venture Partners have teamed up with Salesforce to invest $25 million in businesses building on the recently announced Force.com application platform over the next three years. Investments will be around $500,000 each (some convertible notes). However, others may go as high as $2 million depending on the company’s stage and needs. The investments are a boon to the evolving Force platform and sure to lessen the appeal for a host of other database-driven application platforms.

The partnership will provide Bay and Bessemer early leads to new companies and Saleforce’s assistance during due dillegence. Bay and Bessemer were attracted to the platform due to Salesforce’s existing 35,000 customer base and 50,000 developers. Force.com already has 350 partners with 725 applications as well.

Bay looks to be taking the lead in the program and will be leveraging their significant experience SaaS investments. They have already invested in many Appexchange integrated companies (Xactly, Eloqua, Cornerstone, eProject) and are looking to get in earlier this time around. Notably, Bay has also invested in Facebook’s platform by setting aside funds for 50 investments (they’ve closed three).

The investment program has been underway over the past couple of months. Bay has been looking at 12 deals and already committed to one. The deals are judged on a case by case basis. Although, they will be looking for fully developed products, with strong metrics (revenue, customer stickiness).

The Force.com venture program is being led by Neil Sadaranganey and Salil Deshpande from Bay Parntners and Byron Deeter from Bessemer Venture Partners. Companies interesting in learning more about the program can send inquires to saas@baypartners.com.

Burlingame based BitGravity officially launches their website and content delivery network (CDN) this evening, although the company has been busy working with nearly fifty existing customers for months to work through any last minute issues. We first covered the company when one of its employees sent a live video stream from his car (using BitGravity) during a drive from San Francisco to Los Angeles.

They are focused on delivering high volume rich media (streaming video and audio files) and large software downloads with a near zero buffer time and very low lag time.

Their flagship customer is Revision3, which has a number of popular high definition video shows (such as Diggnation and The GigaOm Show) that a lot of people watch right when a new show becomes available. Given how well those shows tend to stream, it’s the best endorsement BitGravity can get. An example GigaOm Show episode (recorded during the TechCrunch40 conference) is embedded below.

CEO Perry Wu says the company has a lot more planned in the near future. They say they’ll be working specifically with big networks to stream live events and other popular content, and to look for bandwidth-heavy streams that include, for example, 360 degree views of concerts and sporting events.

The company has raised a seed round of capital but will not yet disclose investors or the size of the round.

Random spam is never welcome. But when it comes from a company that I co-founded, I think it’s worth criticizing in writing.

Edgeio’s classified listing platform has been doing well. We use it for our CrunchBoard job board, and many other blogs and websites have begun to use it, too. The company recently started reaching out to bloggers to discuss business development deals. Which is fine. But what isn’t fine is random mass emails out to top bloggers (including our own Duncan Riley) to pitch the product.

I emailed Keith Teare, my co-founder and the company’s CEO, who says this was a simple mistake and was only meant to be sent to people they’ve already had direct contact with. That’s fine, but as I said I’m going to call them on this since I’m a stockholder and my name is associated with the company.

Part of my promise to readers is to call things like I see them. Conflicts of interest are disclosed on our about page. And when a company I’m involved with does something I think is particularly smart or not so smart, I will point it out here on TechCrunch. File this one under “not so smart.”

Buddystumbler is a newly launched (out of beta) social networking site that focuses on Instant Messaging (IM) contacts.

Users create profiles that include the typical social networking features of photos, descriptions, and interests. Buddystumbler then offers an interface that enables searching of user profiles, interests and location, sort of part Meetro, part Facebook. The search option itself feels more like a dating site, asking whether you’re a guy or gal looking to hook up with a guy or gal (their choice of words), although keyword and tag searches are also available.

Once connecting with someone on Buddystumbler, users can contact their new found friends via a supported chat platform, by leaving a message or giving them a “High 5.” Platforms supported include AOL, Yahoo, MSN and Google.

Sunnyvale based founder Han-Shen Yuan created Buddystumbler to allow “more people to interact with each other, in communicating online,” by which I presume he meant IM. If you’re heavily into instant messaging (and generally speaking that will mean you’re more likely younger than me) Buddystumber may be worth a look.

iWon, the site owned by IAC that attracts people with the promises of instant prizes, is revamping it’s look, going from a very 1.0 portal to a Flashy, casual-games site, complete with spinning wheels, slots, and lots of bright colors. The games are also now going to become widgetizable so they can live on people’s Facebook or MySpace pages. (And you thought you could avoid the shrill marketing come-ons just by avoiding the site).

iWon’s business model is to lure people in with cash prizes, get them to play online games like Sudoku, Slots, or Solitaire, and show them ads. Games can also be created specifically for ad sponsors.

This was iWon 1.0:

and here’s iWon 2.0:

I can’t decide which one’s lamer. Still, iWon needed to do something. According to comScore, its monthly unique visitors dropped from 5.2 million last year to 2.2 million in August. Although average time spent on the site shot up from 33 minutes a month to 53 minutes, that’s what you’d expect as the casual visitors tired of the offerings and the only ones left were the hardcore iWannaBeWinners. In beta testing, the new site has already proved to keep people playing five times longer than before. But is it the same people over and over again, or will the makeover be able to attract enough new visitors to turn things around?

The following is a concept video produced by LonelySandwich.com demonstrating cut and paste on the iPhone. It’s a feature that’s sorely lacking on the phone; it can do so much but without copy and paste it can never really be a 100% computer replacement (although for me it’s a 75% of the time laptop replacement.)

It’s a old mockup so I don’t think it will be coming soon, but the video itself is worth watching

Computer Science Professor Randy Pausch, who has been diagnosed with terminal pancreatic cancer (see his blog for details), gave his last lecture at Carnegie Mellon University last week. He gives excellent advice on how to live your life and achieve your most outrageous dreams. It’s a must see for entrepreneurs, and really anyone looking for a refresher course on living life to achieve your maximum creative potential. My favorite quote from the video is when he talks about brick walls impeding your march towards goals. They’re to stop other people, he says, and overcoming them just proves to you how much you want something.

Thanks to Paul Bragiel, the founder of Meetro, for sending this to me and a recommendation to spend an hour and a half watching it. I’ve now seen it twice, and think it is worth sharing with our readers.

LivePetitions, an Italian startup, just launched with Italian, British and U.S. localized websites. It’s meant to be a much cleaner and functional online petition service than PetitionOnline, the big player in online petitions.

Users can quickly create an online petition, set an optional end date and enter categories and tags. Various required and optional fields can be added (email, name and zip code are default settings, along with a comment field), but those can be removed and anything else added. The creator and any signers can also choose to import their Gmail or Yahoo address books and notify their contacts of the existence of the petition.

The company makes money by placing ads on the petition pages, although those can be removed by paying a fee, which also allows customization of the petition page with a logo and other stylistic changes. A domain name for the petition can also be purchased so that the petition does not point to a livepetitions.com sub domain. One of the better features – a couple of options to embed a widget promoting the petition on third party blogs and other websites

It’s a good service with lots of flexibility and an easy to use interface. It does suffer from a few translation snafus (a lot of the English content is improperly translated, or not translated), but it is certainly better than existing options. Like other services, signatures must be from unique email addresses, which allows for a lot of fraud. It probably won’t become a big business, but it will be useful for the proactive types who like to stir the pot and get people behind whatever causes they are currently promoting. I expect the inevitable Facebook application to be released shortly.

So Facebook will finally allow users to group friends and control information flow based on friend type. For guys like Robert Scoble, who have 5,000 friends (the limit), this may be a way to finally sort through the real friends from the fans. It’s a much needed feature that people have been requesting for a long time.

It also shows the steady maturity of Facebook from a college network to a full on world network, where friendships, business contacts, family and other types of relationships need to be more fully described. And this is also as much about privacy as it is about organization – users will be able to limit the information that certain friend groups receive.

A few existing applications are going to be affected, like Slide’s Top Friends application, the most popular third party app on Facebook. Lots of other applications will likely need to be tweaked to work properly when this launches (so many of them access the friends list). And this will shut down at least one “startup” we’ve been tracking that was creating this exact feature as an application. At least they can quit now and stop putting good time and money after bad.

Building Facebook applications is a big dice roll. If it’s too popular or too obvious of an idea (even if it hasn’t been done yet), Facebook is just as likely to compete with you as pay a few bucks and just buy you (they are probably more likely to compete with you than buy you, actually).

Some developers will probably wonder if getting a cash grant from Facebook’s just-announced fbFund will lessen the likelihood of direct competition from the company. Only time will tell.

Update: Wired is writing about a slew of Facebook ad networks and the almost inevitable fact that Facebook will be competing with them directly, too. We’ve covered most of these: SocialMedia, VideoEgg, Lookery, fbExchange, and RockYou. Also mentioned are Cubics and Appfuel. Lots of brave souls racing to build a business before Facebook comes in and stomps all over the scene.

Sure, you can always sell those old iPods (working or not) on eBay, but it’s far easier to use BuyMyBrokeniPod, a site that promises to buy any model of iPod, working, broken or in between, with no questions asked. You even get an estimate of the price before you send it to them.

Since launching earlier this year, the guys who run the site say they’ve purchased more than 1,000 iPods from happy customers. The average price paid for a working iPod is $100 (range from $10 to $330). A broken one fetches an average of $30 (range from $2 to $216). You have to pay to ship the unit to them in Colorado, and they pay you via paypal or check.

The price they’re offering on my slightly used (and currently bricked) 8GB iPhone is $213. My last generation 60 GB iPod is worth $63. That’s competitive with eBay prices, without the hassle. And if your iPod is broken, these guys may be one of your only choices.

Broken iPods are sold in bulk to third parties or broken down for parts. Working iPods are refurbished and resold directly to to resellers.

The site is full of happy customer testimonials. If any readers have direct feedback, let us know.

See CrunchGear’s coverage of TheGadgetLocker’s iPod Recycling Program as well.

NetBank, one of the first online banking startups and a survivor of the first web bubble, was closed Friday after intervention from the US Office of Thrift Supervision and the Federal Deposit Insurance Corporation (FDIC).

NetBank had been in trouble for some time with failed mortgages and serious operating deficiencies. The service, which floated at $12 a share in 1997 hit a high of $249/ share in April 1999 until settling to a price of $15 a share in mid 2004. The company was delisted from the NASDAQ on August 3 this year and last traded at $0.068 on the OTC board on Friday.

An interesting comparison can be drawn between NetBank’s model and a number of verticals being targeted by startups today. In 96 internet banking was new and the big players were only just starting to roll out internet banking services, and even then they weren’t very exciting. Services such as NetBank offered a product suite that was innovative at the time; however the major players saw a demand for online services and eventually caught up. It’s not too dissimilar today to the various Google Maps mashup services that have launched, only to find Google 6 months later offering the same features themselves. We’ve seen it a little bit with MySpace add-ons and I suspect we’ll see it with Facebook in the months to come as well.

Existing NetBank accounts have been acquired by ING Direct. NetBank joins the veiled halls of the TechCrunch Deadpool.

Google has launched YouTube Adsense video units that let users monetize a YouTube video embed with text or image ads.

The product is not dissimilar to one of the multitude of slide products currently on the market, essentially you use the unit as a display point for your favorite content (in this case from YouTube). Site visitors get to play videos from your list with the ads displayed when these videos are played, and like Adsense you get paid when people click on the ads.

As Google Operating System points out, it’s not clear as yet exactly what videos will be available; whether it’s a run of site option excluding premium videos that don’t allow embedding, or just particular content partners, like the creators currently part of the YouTube advertising program.

According to Google, the YouTube units can be delivered by category or perhaps more interestingly: contextually, “Bringing users to your site more often and keep them there longer with highly relevant, frequently refreshed video from popular content providers.”

International payments processor Xoom has raised $20.29 million Series E in a round led by DAG Ventures and joined by previous investors Fidelity Ventures, New Enterprise Associates and Sequoia Capital.

Xoom’s international payments platform allows users to transfer money to overseas accounts; think Western Union without the excessive fees, and you can use funds in your PayPal account for the payment.

I’ve used Xoom in the past, and it’s a great service that steps in when Paypal withdrawals (or in some cases Paypal altogether) isn’t available in the country you’re paying to. The fees are reasonable, varying between 4% for a small payment down to 1.1% for larger payments. The service is also a convenient way to make international wire transfers that compare well in price to most major banks.

The Series E round takes Xoom’s total funding to in excess of $50 million.

(via PEHub)

As we all know by now, the latest software update to the iPhone may in some cases turn it into a useless brick—if you happen to have put hacked software on it or unlocked it (ahem, John) in order to make it work on a non-AT&T carrier (such as T-Mobile, in the U.S.). Apple, of course, is free to try to lock in customers to its partner AT&T and to control what software will work on the phone. That’s just the way the cell phone business works. Right? It’s all about customer lock-in and reducing churn.

But Steve Jobs might be better served here to take his own advice and think different. Because, as he has so elegantly demonstrated with the iPhone, these devices are finally becoming little computers. So it shouldn’t be a surprise that consumers will expect them to act like computers. They will want to modify them to their exact, quirky predilections. They will want to use them any way they want, as a general-purpose device.

That is why PCs took over the world. They could be tuned a million different ways to the needs of a million different customers. You don’t ask Apple permission to download software off the Web for your Mac. And you would never agree to buy a laptop that only worked with only one broadband provider. Why should the iPhone be any different?

The uproar today may be limited to hackers and the digerati. But soon everyone will want the same thing. And if they don’t get it from Apple. They may look somewhere else. Google Phone anyone?

In an interview with 60 Minutes, Redfin CEO Glenn Kelman said that “Real Estate is by far the most screwed up industry in America.” That may or may not be true, but one thing is certain: a lot of people have had negative experiences with realtors and wish there was a better way to buy and sell houses.

And whenever we write about how screwed up that industry is, the realtors come out and start trolling in the comments. The profession seems to attract a fairly outgoing group; individuals that like the sound of their own voice. That may explain the success of Active Rain, a blogging platform for real estate professionals. It launched in June 2006, and by March 2007 had 20,000 bloggers, 12,000 of whom were real estate agents.

Now the service is in litigation with Move.com, a company with a collection of websites (including the official site of the National Association of Realtors). In late 2006 ActiveRain entered into discussions to raise money or be acquired by Move.com. In January 2007 the two companies signed a nondisclosure agreement. Two months later Move.com sent Active Rain a letter of intent to acquire the company for $30 million, although it isn’t clear that either side actually signed the letter and made it binding.

Then things started getting interesting.

According to a lawsuit filed by Active Rain, Move.com kept telling the company the acquisition was on track, and also kept asking them for lots of information about their business. Active Rain said they complied, occupying weeks of the owners’ and officers’ time. Move.com supposedly told Active Rain that the deal had been unanimously approved by Move.com’s board of directors and that the closing was contingent only on the tweaking of a few minor details.

Then the coup de grace: Move.com asked Active Rain for, effectively, a database download, including “highly sensitive information about its members and its network.” On May 3, 2007 Active Rain complied and sent the data.

Within “hours” Move.com notified Active Rain that they were pulling out of the deal. A few days later Move.com announced that they were “rolling out free blogs for realtors” and competing head on with the service. A press release on the new product was issued in August.

The $33 million lawsuit is pending. Move.com filed a answer denying some of the claims and demanding a jury trial.

There isn’t much more to go on at this point. Active Rain look like absolute fools for trusting Move.com with their core customer information before a deal was locked up, and Move.com look like serious jerks. It will be fun to see how this sorts itself out. Meanwhile, the good guys continue to disrupt the whole shady realtor business model. I hope, in the end, they win.

Hey, guys. I, John Biggs (not Mike) will be in Tokyo for CEATEC next week. If you’d like to meet up for some sake and iPhone fondling and/or Web 2.0 talk, please drop me a line at john @ crunchgear.com. My schedule is still kind of up in the air but I hope to have an evening free for karaoke. See you soon!

Two big private equity deals today. Shareholders finally approved the $8.2 billion buyout of Avaya by Silver Lake Partners and the Texas Pacific Group (not bad for an IP phone company that once was part of Lucent). And 3Com, the perpetually money-losing maker of computer networking equipment and competitor of Cisco Systems, has agreed to be acquired by Bain Capital and Chinese networking company Huawei Technologies for $5.30 per share in cash, or $2.2 billion total. For 3Com, that’s 1.7 times last year’s revenues, and for Avaya it is 1.6 times.

The price for 3Com is a 44% premium to Thursday’s closing share price of $3.68. Huawei Technologies will gain a minority stake in 3Com as part of the deal.

This 3Com deal marks the ascendancy of China in the networking equipment market, partially because networking is still very much a growth market in China and partially because Ethernet switches and the like have become such commodities that only the Chinese can compete. The deal also marks the latest of a string of low-margin tech giants getting bought out with private equity money going all the way back to Silver Lake’s acquisition of Seagate in 2000. But like all private equity deals, those too were fueled by low interest rates. The Avaya deal was brokered earlier this year, before the recent subprime credit crisis threatened to put a damper on the buyout trend. How many more of these do the markets have an appetite for?

The REAL ID Act of 2005 is a $17 billion privacy and civil rights nightmare that requires all fifty states to issue standardized ID and drivers license cards. Luckily, it has been stuck in bureaucratic limbo. Congress mandated the cards, passed off the strategy to Homeland Security and stuck the states with the tab for actually paying for all of this.

Not much has actually happened to push the REAL ID Act forward since it was passed, mostly because no funding has been allocated.

Seven states have passed laws refusing to implement the law and another ten have passed resolutions asking Congress to revisit the issue. The ACLU has a website called Real Nightmare that tracks the progress of the legislation (and opposes it). Cato Institute Director of Information Policy Studies Jim Harper has written a book called Identity Crisis which outlines the reasons why it will hurt our country and its citizens. There are House and Senate bills before Congress now that would repeal the Act.

So why are Microsoft, AOL, Yahoo, Red Hat and many other large technology organizations that are members of the ITAA calling for the government to fund the program immediately and push it forward?

Probably because they stand to gain a lot of money from lucrative government contracts outsourcing the technology and security aspects of the program. The estimated direct costs of the program are $11 billion (with another $6 billion in estimated compliance and opportunity costs to the country) – much of that money would end up in the hands of the ITAA members who would bid for the work.

If the REAL ID Act becomes reality, U.S. citizens would be forced to provide copies of their birth certificate, social security card and other identification documents to the government to get the card. All of that data would be scanned and entered into fifty interconnected databases, one for each state. That would be a prime target for hackers, either through a direct attack or by attempts to compromise DMV employees for access. Jim Harper, who wrote the book linked above, says our identity theft problems today would be nothing compared to what would happen when (not if) that database was hacked. He also wrote about the ITAA issue yesterday, and the ACLU chimed in today.

The fact is that the REAL ID Act will cost billions, will do nothing to protect the country from terrorists, and no one stands to gain anything except for the technology and security companies who land the big contracts to build and maintain the system.

It is a shame to see these companies beg for handouts from the government, at the expense of their real customers (all of us).