eBay has released a copy of its complaint against Craigslist (document above). eBay lodged the lawsuit last week in the Delaware Court of Chancery claiming that Craigslist executives took actions that unfairly diluted eBay’s economic interest.

From the document itself, the tipping point would appear to be eBay’s move to offer Kijiji, its classifieds service in the United States. Craigslist viewed Kijiji as a competitive activity that canceled some shareholder rights held by eBay since it became a Criagslist shareholder in 2004. The short story is that eBay believes Craigslist went to far when enacting the competitive activity clause.

New Relic is looking to capitalize on the growing number of Ruby on Rails application deployments, having recently raised $3.5M from Benchmark Capital for their Rails Performance Management (RPM) product.

RPM is a combination of installed software and cloud services that helps developers understand performance problems in their RoR applications. A Rails developer first installs a standard plugin that continuously sends performance data to New Relic’s servers. He or she can then use an RPM dashboard to identify the specific points in their code that are causing bottlenecks.

Several brand name Rails developers are already using a beta version of the RPM service, including Rails core developer Rick Olson. While the company is reluctant to disclose its current enterprise-size clients, they are obviously going after the several billion-dollar-plus businesses already using Rails in production.

New Relic was founded by Lewis Cirne, who in 1998 started a company that offered similar monitoring software for the then-young Java application industry. Cirne successfully sold that company and has brought several of his old colleagues with him to this new Rails venture.

Other startups working to make Rails deployment less painful include Heroku, which offers online development and one-click cloud deployment, and Engine Yard, which offers managed Rails service infrastructure.

Adobe is making a big play to make Flash the de facto viewing environment not only for Web apps on your PC, but also on your mobile phone, your TV, and any other screen you can think of. It is announcing the Open Screen Project to make it easier to develop applications across devices—using Flash, of course. David Wadhwani, general manager of Adobe’s platform business (which includes Flash/Flex, AIR, and Cold Fusion), says:

We believe it is time for an industry-wide movement for a consistent way to develop across the Web for PCs, mobile devices, and TVs.

To help the project along, Adobe is:

1. Opening up the runtime to its Flash player for the first time so that anybody can create their own customized player. Specifically, it is going to open up the SWF and FLV/F4V specifications. In the past, developers had to sign agreements not to create derivative Flash players because Adobe wanted to avoid the fragmentation that Java experienced during its early years. But now it feels that Flash is a strong enough standard to withstand the introduction of some new evolutionary branches.

2. Removing licensing fees for Flash on mobile devices. While Flash is free on PCs, cell phone makers and other device manufacturers must pay a royalty fee. This was a $52 million business for Adobe last year. (Versions of Flash are on 500 million mobile devices already, and that is expected to grow to one billion over the next 12 months). That business (which represents only 2 percent of Adobes overall revenues) is going away. Starting with the next major release of Flash (and AIR) for devices in 2009, it will be free to device manufacturers. That should help Flash spread even more.

3. Publishing the APIs for porting Flash to other devices. This currently also incurs a royalty fee. By opening it up, there is no reason why every device shouldn’t come with Flash pre-installed.

4. Publishing Adobe protocols for pushing content to devices like Flash Cast and AMF. Adobe will also work with wireless carriers on protocols for over-the-air software updating. (This is actually a hard problem because most software downloaded to a mobile phone gets stored in read-only-memory, where it pretty much stays until the device is replaced. Getting mobile software to update as easily as desktop software is the key to making sure mobile apps keep up with the times.

On the application creation side, Adobe increasingly will be adopting a widget approach. There is not much difference between a widget that runs as a module on a Web page and a mobile app that runs on a small screen. Wadhwani explains:

These things can expand up. Developers are looking to optimize for these small screen sizes. Instead of squashing it down from a desktop experience, it is easier to start small and build up.

The same approach can be used for apps on other devices as well, such as set-top boxes.

The promise of the Open Screen Project to developers is the age-old dream of being able to write an application once and deploy it anywhere across any device. Adobe and its slew of partners in the Open Screen Project (Nokia, Sony Ericsson, Qualcomm, Samsung, Motorola, LG, Toshiba, NTT Docomo, Chungwa Telecom, ARM, Intel, Marvell, Cisco, NBC Universal, MTV Networks, and the BBC) are not alone in this desire. Notably absent from Adobe’s list of partners is Apple, Google, and Microsoft. Each has its own ideas on how this cross-device compatibility will work.

Apple thinks you should just buy Apple products that work seamlessly together (Mac, iPhone, Apple TV). Steve Jobs also notably snubbed Adobe by refusing to put Flash on the iPhone. Maybe his engineers can now make their own version that satisfies their exacting standards.

Google has never been a big fan of Flash, preferring the speed of Ajax in its Webtop apps. On the mobile front, it is betting on Android, its own open operating system. And it also develops mobile apps the traditional way—one device at a time.

But the company with the most overarching and different approach to Adobe’s in this regard is Microsoft. It is pushing its own alternative to Flash: Silverlight. (Although it has licensed Flash Lite for Windows Mobile as a stopgap measure until Silverlight works on mobile devices). More radically, Microsoft differs on how to make apps work across devices. It’s answer ultimately will be Live Mesh. As I wrote last week when Microsoft officially unveiled Live Mesh.:

The basic foundation of Mesh is this feed-centric programming model. A Web developer can build an app using any programming language or tools he likes (Python, Ruby on Rails, Flex) and then sync it across devices and other applications using two-way feeds as the basic data and communication channel. The promise for developers, says product unit manager Abhay Parasnis: “If you Mesh-enable your application, we will let you extend it to other devices.”

In many ways this effort is a counterweight to what we are seeing with Adobe Air or Google Gears, which are efforts to take browser-based apps offline. With Mesh, Microsoft is in effect reasserting the primacy of client-based applications. . . . Developers can customize their apps for whatever device they originally reside on—whether it is a PC, a smartphone, or a set-top box—and then Webify them by syncing them to other applications across the Web.

The more competition we get for ways to bridge applications across devices and screens, the more likely that we’ll actually start to see some of our favorite Web apps on something other than our laptops.

(Photo by AMagill).

Update on our post from earlier today - Meebo is now confirming that they have raised a $25 million third round of financing from Jafco Ventures, Time Warner Investments and KTB Ventures. Previous investors Sequoia Capital and Draper Fisher Jurvetson also participated.

Meebo was looking for a buyer through their investment bank, Montgomery & Co., but moved to a fundraising round earlier this month when there were no takers at the price they wanted. The rumored valuation on the financing was $200 million.

Meebo was pitching strategic partners hard to join the round, including eBay, Fox/MySpace and AOL. Time Warner/AOL obviously sees something they like. Last month the two companies started working more closely with the release of Open AIM 2.0.

This round also signals that Meebo will be looking to Asian expansion. Jafco is a Japanese based fund; KTB is Korean.

Chinese social networking site Xiaonei has raised $430 million in funding from Softbank, according to a report from VentureBeat.

Xiaonei was founded in December 2005 by Qinghua University graduates Wang Xing, Wang Huiwen, Lai Binqiang and Jacky, then was acquired by Oak Pacific Interactive in 2006 for an undisclosed sum. As of November 2007, the site was said to be the most popular social networking site among university students in China, with 15 million registered users and 8.8 million active users.

The company likes to call itself the Facebook of China, and we’d never guess why (note, shot as run through Google Translate, they don’t offer an English version from what I could see):

After negotiating over the past few weeks with Microsoft and signing a letter of intent to be acquired, e-mail startup Xobni has walked from the deal, according to a source close to the negotiations. The deal would have been a natural for Microsoft, which was offering to buy the two-year old startup for somewhere in the $20-million range. (The company has raised less than $5 million so far in venture capital from Khosla Ventures, Atomico, First Round Capital, Ron Conway, and Y Combinator).

But the deeper that Xobni got into the discussions, the less comfortable it felt about its eventual fate inside the Microsoft machine. The fear was that Xobni would end up nothing more than a feature of Outlook. Microsoft wanted the entire team to move up to Redmond, and was vague in its answers about what it had planned for that team, or the product. In the end, the body language just wasn’t there.

Xobni offers a plug-in for Outlook that makes it smarter and easier to use by giving you handy stats in a sidebar and showing you how your contacts are connected to each other. But the company has greater aspirations than to become a feature of Outlook, as its internal integration with Yahoo Mail suggests. The service is still in private beta, and is approaching 50,000 registered users.

Was Xobni crazy to walk away, or did it make the right move in the long run?

Microsoft is leaking that they are willing to increase their Yahoo bid to as much as $33 per share, up from the original $31/share offer. That original offer, which included payment in Microsoft stock, has fallen in value to just $29.12/share.

This is a surprise since Microsoft has previously stated they wouldn’t increase their bid. Analysts largely expected them to either walk from the deal or go hostile.

$33 may not be enough to get Yahoo to move the knife away from their nose, however. The WSJ says they want $35 – $37.

The people say that it’s unclear what final approach Microsoft will take, but that discussions between the two companies have been stymied by a stark divide on price. Microsoft has said privately in recent days that it’s willing to offer as much as $32 or $33 a share, well above the $29.12-a-share value of its original cash-and-stock offer as of Tuesday’s market close, these people say. But major Yahoo shareholders have signaled they want in the range of $35 to $37 a share, with Yahoo’s management and board similarly shooting for an offer in the upper $30s, they add.

Web chat startup Meebo has closed the funding round they’ve been working on with investment bank Montgomery & Co., a source tells us. Expect an announcement shortly.

The best information we’ve been able to gather says the company raised $25 million or so on a $200 million valuation. Earlier this month they abandoned efforts to sell the company, focusing instead on raising money.

Meebo was negotiating with strategic partners to join the funding round as well, including eBay, Fox/MySpace and AOL. From what we’ve heard, none of those companies invested.

To date Meebo has raised $12.5 million from Sequoia Capital and Draper Fisher Jurvetson.

Update to our January post: Super blogger Robert Scoble, who has argued that having advertisements on blogs destroys trust, added advertisements to his blog today along with a redesign. At least it’s clear now who scratches Scoble’s back – Seagate.

One thing I do like – the FriendFeed widget that shows his activity stream and comments from readers.

Meet Watercooler, a startup developing social network applications for all the usual suspects – Facebook, MySpace, Bebo, Hi5, and Friendster – that allow fans to rally around their favorite sports teams and TV shows.

The Mountain View-based firm raised a previously undisclosed $4M in Series A funding from Canaan Partners this past September. While it’s been developing Facebook apps since July 2007, it just recently launched a corporate website to provide a more unified front to its efforts.

While you may not associate the name “Watercooler” with the more famous app developers Slide and RockYou, as well as SGN and Zynga, the company has created over 700 community-building apps. Watercooler’s installs and active users earns it the #9 spot on Adonomics top Facebook developer list.

Watercooler’s apps focus on particular shows and teams, and give fans an opportunity to discuss recent events, share photos, and take quizzes. The applications can also communicate with each other, allowing for interaction between rival groups, even across the supported social networks. The company’s platform allows the company to produce these applications very quickly, each tailored to a particular show or team.

Amazon founder Jeff Bezos has invested $3 million into user-generated casual gaming site Kongregate through Bezos Expeditions, his personal investment vehicle. Kongregate CEO calls it a “super angel round,” although technically it is a B1 round (the startup raised $5 million in a round led by Greylock). Bezos Expeditions won’t be taking a board seat. Greer says:

If we had done another venture round, we would have had to raise $12 million to $15 million [to satisfy current the target equity stake that would be required by new VC investors]. We don’t need that to get to profitability. We still have $6 million in the bank of what we’ve raised so far, including Bezos’ money.

He really didn’t need the money, but when Jeff Bezos wants to invest in your a startup on good terms, you’d be crazy to say no. (LinkedIn founder Reid Hoffman, also an investor in Kongregate, made the introduction to Bezos). Greer says the process was very efficient. He flew up to Seattle and had one meeting with Bezos and his investment team. Greer explains why he thinks Bezos invested:

He looked at it the way he looks at the Amazon seller business. Amazon is a better place to sell your stuff than on your own site, and Kongregate is a better place to host your games. Community is really important. He said you should really consider developers your customers to the same extent that you consider players your customers. That was his big emphasis.

Kongregate lets anyone create their own Flash video games and splits revenues with game creators, starting at 25 percent of any associated advertising, up to 50 percent. ComScore shows 1.7 million global unique visitors in March (see chart below), with the average user spending 82 minutes per month on the site. (The company claims 3 million worldwide uniques and 349,000 registered hardcore users). The video above is one we shot of Greer at the Crunchies awards earlier this year, explaining what Kongregate does. (The figures he cites at the end of video of 2800 games and 1.5 million visitors are outdated, and now would be 4,200 and 3 million respectively, on an apples-to-apples basis. And only 63 million games have been played in total, not the half a billion he states in the video).

Greer also has a Facebook strategy up his sleeve which he plans to unveil next month. Kongregate will start launching the most popular games as standalone Facebook apps, starting with Dolphin Olympics, Jump Cat, Super Crazy Guitar Maniac, Ragdoll Avalanche, M.A.D, and Filler. (See exclusive screen shots below).

Drama over. The CrunchGear/TechCrunch Iron Man screening, which Marvel tried to shut down yesterday for no good reason whatsoever (more on that below), is back on.

We are adding another 30 spots on the wait list. At least most of the people on the wait list will get in, so if you’re willing to risk being turned away at the last minute, sign up there. Showing is at 7:15 tonight at the AMC Metreon in San Francisco.

We’re still trying to figure out exactly what happened, but Marvel is now saying that Oracle, which is promoting the movie, complained about the event. From our attorney: “He said this all arose from a misunderstanding. Paramount had not informed Marvel about your deal. Oracle had booked the theatre for a different screening at the same time. People at Oracle were upset thinking that their event was turning into a TechCrunch event and that there would be too many people, conflicts over who would get in, etc.”

I was already slightly annoyed at Oracle for spamming comments on our original post (see comment 50 here). But to try to derail the event is just…villainous.

Marvel also apologized, and we accept. I’m not annoyed at all that we incurred an extra $2,000 in legal expense on top of the ticket price.

See you tonight!

Update: Just got a call from Ira Rubenstein apologizing. He also confirms that he left this comment. All is forgiven at Marvel, even the legal fees. It’s Oracle I’m aiming at now.

A little NSFW near the middle. Be warned.

It’s business time, TC readers. Tomorrow we welcome those with emailed invites to Red Sky at 47 E. 29th Street between Park and Madison.

We’d like to thank our sponsors again. If you got an email for the wait list spots, congratulations. If you didn’t, there’s always next time. See you tomorrow! Hopefully Marvel doesn’t shut us down. After all, Matt Hickey is coming dressed as No-Pants Spiderman.

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AOL may have the widest-reaching advertising network in Platform A, but it is not seeing the financial rewards of that reach. In fact, Time Warner today announced that during the first quarter, AOL’s overall advertising revenues grew just 1 percent. Total revenues at AOL slid 23 percent because the access business continues to go away, but everybody knows that and the focus now is on whether AOL can reinvent itself as a pure Internet advertising company.

AOL spent about $1 billion over the past year on companies like Tacoda and Quigo to buy its ad network market share. Those businesses aren’t quite kicking in yet partly because of delays in integrating their sales forces But the bigger problem was that gains in third-party ads sold on other sites were almost completely offset last quarter by an 18 percent drop in display ads on AOL-owned properties. AOL makes a lot more margin on ads it sells on its own sites than on ads it sells on other sites. That is why it is trying to boost its own pageviews by upgrading its sites and is the reason why it bought Bebo for $850 million earlier this year. The more ad inventory AOL can sell on its own sites, the better its margins will be.

AOL’s deal with Google on paid search advertising, like IAC’s. is also helping to shore up its overall advertising sales. Although, it is not clear what the exact impact was because the company did not break out the numbers.

The most publicized improvements to email in recent memory haven’t been browser-based, they’ve been extensions like Xobni and Xoopit that latch onto your existing mail client and provide auxiliary services.

This tactic makes good business sense – who wants to try convincing Yahoo Mail, Hotmail, and Gmail users to take a leap of faith and walk away from these BigCo solutions for an unproven startup? As things stand, that migration is necessary without a way to integrate 3rd-party technologies into those popular webmail services.

Zenbe is one company willing to go out on a limb, build a completely stand-alone webmail solution, and push the envelope on what’s possible with email. The service, which is currently in private beta but available to the first 500 readers who sign up here, makes advances in a number of areas. It also provides a glimpse at what “email as a platform” really means.

The app’s most superficial improvement is a beautiful user interface. Spend a few minutes clicking around Zenbe and you’ll find that it really does deserve the “zen” moniker.

But good looks are far from its only selling point. You also get fully integrated calendar, task list, and address book capabilities, easily accessible through an ever-present sidebar. There’s a Xoopit-like tab with which you can browse all the files contained across your emails. These files are viewable by type: images, documents, spreadsheets, audio/video files, and events. As with emails, you can star files to indicate their importance; you can also hover over them to see previews. And there’s a Facebook tab in the sidebar that lets you see your friends’ most recent updates.

Zenbe’s big idea, however, consists of a feature called “ZenPages” that are intended to help you organize your email into projects or topics. Instead of just putting messages into folders (which Zenbe doesn’t have anyway; it’s a tag-based system like Gmail), you can assign messages to ZenPages with specially designated tags. For example, I can assign all messages tagged with “techcrunch50″ to a TechCrunch50 conference ZenPage.

Once there, I can do a lot of useful things with them. First off, I can invite others (whether Zenbe users or not) to my ZenPage and they can view all my relevant emails. If they so choose, they can also share relevant messages using the same ZenPage. This lets groups collaborate around email without having to CC each other on every single one. Calendar events can also be shared this way.

In addition to sharing emails and calendars, you can install a range of other default widgets: a group task list, an agenda, a discussion thread, and a list of relevant links. But here’s where your imagination should take off: Zenbe also plans to allow 3rd-party apps onto these pages, ones that have direct access to users’ emails.

Zenbe is already showcasing a set of 3rd-party integrations, including widgets for YouTube, Flickr, Picasa, Google Chat, and Google Maps. But none of these actually leverage any email data. For one that did, imagine a TripIt that sat within a ZenPage and automatically parsed all of your flight itinerary emails. This would cut out the step of manually forwarding your emails to the service.

Email data is highly valuable and pertinent information for users, so it doesn’t take a great stretch of the imagination to think of other possible email-parsing apps. Maybe someone could even use the platform (once rolled out in full) to solve the email overload problem, or finally build a real social network around email.

Zenbe comes with 4GB of storage for each user. It currently doesn’t display any advertisements, and it only has plans to display them on ZenPages (it sees an opportunity to provide sponsored template ZenPages for certain project types).

IAC reported first quarter earnings this morning, and broke out the financials of what the new IAC would like after the pending five-way breakup of the company is completed. (A March court victory against dissenting shareholder Liberty Media clears the way for the spin offs). What’s clear from the financial statements is that the new IAC very much owes its 22 percent jump in revenues and 15 percent jump in operating income to the $3.5 billion, five-year deal it struck with Google last fall to hand over all search advertising on Ask.com and other sites to the search overlord.

In the Media & Advertising division—the new IAC’ largest and most profitable unit which includes Ask.com, Citysearch, and Evite—revenues increased 28 percent to $216 million and operating income skyrocketed 192 percent to $31 million. This was largely due to better revenues per search query due to the Google relationship, and a slashing of marketing costs. (Those annoying and expensive TV commercials finally got canned). Ask has been able to hang on to iits No. 5 spot in search market share (4.7 percent in March, according to comScore) and showed the biggest percentage gain (12 percent) in search queries of any search engine

These numbers show the benefits, at least in the short term, of handing your search advertising over to Google—something Yahoo is learning itself through its limited test with Google to do the same thing. The question is what happens in the long term when market share erodes and Google does not have to pay so much for the privilege of taking away the search advertising business from its fading competitors.

IAC’s other businesses did not do so well on their own. Match.com saw a 10 percent jump in revenues, but a 13 percent decline in operating profits. And the other businesses are just a mish-mash of underperforming assets.

Mobile phone ad platform provider AdMob has launched AdMob Mobile Analytics, a Google Analytics style service for mobile advertising.

AdMob Mobile Analytics offers businesses a free solution to maximize commerce, advertising and content on the mobile Internet. AdMob Mobile Analytics helps mobile site owners understand their audience, optimize their content and improve usability. The suite allows users to track site performance metrics such as unique visitors, duration of visit, page performance, as well as user details including geography, operator and device specifics. This information helps mobile site owners tune their sites to the specific consumers visiting their mobile Web presence.

Notably, the service is ad provider agnostic: users can track campaigns by any provider as well as ad campaigns from AdMob.

Wine Tasting is more of a traditional pursuit, like minded people gathering together to taste fine wine. Twitter wine tasting has been tried before, a wine tasting party that gathered web notables in person to try wines tried the concept back in March. But until now no Twitter wine tasting event has focused on providing wine over a broad geographic region with a focus back on providing feedback via Twitter.

Project Vino, an Australian wine site focused on community recommendations, tried the Twitter wine tasting model today. The site sent three bottles of Kirrihill (South Australia) wine to 12 prominent Australian Twitter users, with the only obligation being to tweet their thoughts to Twitter at the designated times.

Project Vino CEO Hugo Sharp had this to say on the event:

This event is one of the earliest instances of using Twitter to transfer an event as social and active as a wine tasting, into online realms. The end result? A resounding success. When you have a social drink which is best enjoyed sharing experiences with friends, it works perfectly with online communication tools.

As one of the twelve sent the wine it was both a fun, and an informative experience. It helps that the Kirrihill Wine was good, but the networking and good word of mouth will make the 3 cartons an easy spend. Reviews can be found via @projectvino. An experiement that was suppose to last 45 minutes kicked on well and truly past the testing time, a positive sign that the wine was well received.

Pics below are from a live stream of the event.

Pontiflex has received $2.5 million in Series A Funding in a round led by New Atlantic Ventures and Greenhill SAVP.

The company is involved in online lead generation, facilitating interaction between advertisers and publishers. They bill themselves as “the industry’s only open and transparent lead generation marketplace”, and feature real time campaign optimization and speedy campaign generation.

Pontiflex says it will use the capital to strengthen the company’s sales and marketing efforts to enhance their lead generation services.

As part of the deal Scott Johnson, Managing Partner for New Atlantic Ventures, and Brian Hirsch, Greenhill SAVP’s managing director, will join the Pontiflex board.

The DataPortability Workgroup founded in November 2007, is aiming to develop best practices towards letting users move, share, and control their identity, photos, videos and all other forms of personal data stored in social networks and other web services. The young organization now faces its second legal challenge to, of all things, its choice of logo.

In February, Red Hat sent a cease and desist letter claiming trademark infringement over their Fedora logo. Instead of fighting Red Hat in court, DataPortability simply held a new logo competition and announced the winner last week.

With that behind them, the group has been focused on drafting technical best practices guideline and getting community feedback.

Today, though, the new logo has been challenged as well – this time by Vivendi Mobile Entertainment’s trademark agent, who claims to be “very surprised to notice your new logo for Dataportability which is very close and similar to their logo.” They add:

The mere comparison of the two signs is self-explanatory and we are sure that you will understand that our clients could not leave you to use such a logo in relation to identical of at least similar services.

Vivendi is using their mark in connection with a service called ZAOZA, a self-described “simple and fun architecture that permits the legal peer sharing of exclusive and quality content.” They are demanding that DataPortability immediately stop using the logo.

Dataportability co-founder Chris Saad says they aren’t going to fight this challenge, either, because it’s too distracting to their core mission:

We’re going to speak with our lawyers, tweak it slightly and move on. These C&D tactics are really disappointing and counterproductive… We’d really rather everyone focused on the Technical Best Practice Drafts we released last week.

Once again, the lawyers get their way. Full letter is below.

Sample Trademark Logo Infingment Letter – Get more documents