I went to a birthday party this weekend where I ran into a Facebook guy, a smart guy who asked me to go off the record. In fact, the whole party was supposed to be off the record. So I ignored the off the record part by insisting that I already knew the thing I was being told, and then I told him on the record what I thought was about to happen for Facebook. This being my usual m.o. which is to insist on not being NDAed except for things I don’t really want to talk about anyway, like the next version of Office.

That way, I can just make up what I want to have happen, never breaking any confidence and yet at the same time painting as plausible picture of assumed reality that it is hard to deny or in fact slow down. So here’s what I told the Facebook guy: the company has at most 3 months window to absorb FriendFeed and open the Everyone News Feed, and if that’s true (again, making all this up) then the messaging about how that’s going to work must begin immediately, like in two weeks. Then I went home and saw MG Siegler’s post and Scoble’s remake of Frenzy on FriendFeed.

OK, so I was off by two weeks. The noise about the death of FriendFeed is already off the charts, and the proof is in the lack of rejoinder from the FriendFeed team. As in: of course FriendFeed is not dead, and here’s what we’re going to do to remake Facebook in the next few weeks. Actually, that is indeed the message from Twitter, what with Lists and ReTweets and the return of Track just as soon as, well, sometime next year or so. No need for FriendFeed real soon now, because these Lists will soon be carved up and meshed together into an authority stream by the 3rd party developers.

The following is an excerpt from Adam L. Penenberg’s new book, Viral Loop: From Facebook To Twitter, How Today’s Smartest Businesses Grow Themselves.

Simply by designing your product the right way, you can build an insanely fast-growing business from scratch. No advertising or marketing budget, no need for a sales force, and venture capitalists will flock to throw money at you.

Many of the most successful Web 2.0 companies, including MySpace, YouTube, eBay, Flickr and rising stars like Twitter are prime examples of a “viral loop”—to use it, you have to spread it. The result: Never before has there been the potential to create wealth this fast, on this scale, and starting with so little.

In Viral Loop, Penenberg tells the fascinating story of the entrepreneurs who first harnessed the unprecedented potential of viral loops to create the successful online businesses—some worth billions of dollars—that we have all grown to rely on. The trick is that they created something people really want, so much so that their customers happily spread the word about their product for them.
One such business was Hotmail. After their 20th venture capitalist meeting, Sabeer Bhatia and Jack Smith, former hardware engineers at Apple who first came up with the idea for webmail, finally raised seed money from famed VC firm, Draper Fisher Jurvetson.

Editor’s note: This is a guest post by Vivek Wadhwa, an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Executive in Residence at Duke University. Follow him on Twitter at @vwadhwa.

I spent Columbus Day in Sunnyvale, fittingly, meeting with a roomful of new arrivals. Well, relatively new. They were Indians living in Silicon Valley. The event was organized by the Think India Foundation, a think-tank that seeks to solve problems which Indians face. When introducing the topic of skilled immigration, the discussion moderator, Sand Hill Group founder M.R. Rangaswami asked the obvious question. How many planned to return to India? I was shocked to see more than three-quarters of the audience raise their hands.

Does the world really need another URL shortener? Apparently, the U.S. government thinks so. It just launched http://go.usa.gov as a link shortening service for government employees. It shortens links from any .gov, .mil, or .si.edu site.

For instance, http://go.usa.gov/llX takes you to a page on Nasa’s site with some nice satellite imagery showing the Fall colors in Wisconsin. And http://go.usa.gov/liO is a link to www.Recovery.gov (I think you save two characters n that one). The idea is that if you see one of these short links you know it is coming from a government employee, which doesn’t exactly make it official but is supposed to make it more trustworthy.

More evidence that venture exits and fund raising are related. We already know that venture exits were anemic in the third quarter of 2009, and now the National Venture Capital Association has released data on how much money venture funds themselves were able to raise. It was not a lot in historical terms.

According to the NCVA’s data, venture funds raised $1.6 billion in the third quarter, down 82 percent from a year ago and down 21 percent from last quarter. What’s more is that about $1 billion of that was accounted for by one VC firm, Khosla Ventures. Although, the NCVA only notes Khosla’s bigger $750 million fund, so it is not clear if it is including its smaller seed fund as well in these figures.

Kids these days. It seems like they’re writing HTML before they learn how to talk. And a lot of them are starting companies before they graduate from high school. Here’s a list of some of our favorite teen entrepreneurs. And please keep in mind that there are lots of startups we’ve yet to hear about. So if you are a young entrepreneur, make sure to leave a comment below and add your bio and startup information to CrunchBase.

The list:

The Associated Press is yapping again about the “exploitation of news” by search engines, news aggregators and, well, the Internet itself. The CEO of the AP, Tom Curley, told a media industry powwow in Beijing:

We will no longer tolerate the disconnect between people who devote themselves — at great human and economic cost — to gathering news of public interest and those who profit from it without supporting it.

I am temporarily lifting our ban on AP stories to make a point. The remarks seemed to be directed at Google, among others. But if you follow the link above, it will take you to an AP article hosted on Google. Is Google stealing it? No, Google already licenses stories from the AP, so it is already “supporting it.”

What’s really behind all the bluster is that the AP is in the midst of renegotiating a new licensing deal with Google, and is using vague public threats to try to get more money out of them. It’s really kind of sad.

As long as advertisers pay for clicks, there will be click fraud. And the more people combat it, the more sophisticated the attacks become to get around the defenses that advertisers, search engines, and others put in place. But a recent click fraud ring discovered by click-fraud monitoring service Anchor Intelligence suggests that the practice is evolving to a scale never seen before.

Anchor Intelligence identified a click fraud ring being run out of China which involved 200,000 different IP addresses and racked up more than $3 million worth of fraudulent clicks across 2,000 advertisers in a two-week period. That money was never paid out and the ring has now dissipated (or moved onto another scam), but who knows how long the ring was in operation before Anchor noticed. The operation was called DormRing1 because it was centered in dorms at technical universities in China such as the Shanghai Technology Institute.

“We have seen 200 fraud rings,” says Anchor VP Richard Sim, “and this one by far trumps them all. I think it is indicative of how sophisticated the click fraud is getting. We are seeing the sheer scale and size of these rings growing.”

WIth the rise of Web phones like the iPhone, Android, Blackberry, and Palm (Verizon’s CEO says that 40% of its new phone sales are such smartphones), mobile advertising promises to be a huge growth area. The Kelsey Group, a market research firm, projects that the mobile advertising market will balloon from $160 million in 2008 to $3.1 billion in 2013.

Of course, that is just an educated guess which will turn out wrong. But there is no doubt that mobile advertising will be much bigger in four years, perhaps even ten to 20 times bigger than it is today. Where will all of that mobile ad money go to? Here I think the Kelsey group is more on target. It projects that mobile search will go from 24 percent of the total mobile ad market last year to 73 percent of the much larger pie in 2013, according to a recent research note put out by Citi analyst Mark Mahaney, which is where I’m getting all of these numbers.

Today, the Federal Trade Commission made good on its threat promise to change the way it regulates endorsements from bloggers by releasing its final revisions to the guidance it gives advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act. Last May, we reviewed the proposed FTC guidelines that will now change the disclosure rules around paid endorsements and testimonials, and thus how brands use online endorsements in their marketing, advertising, and communications programs.

This amendment marks the first time in 29 years since The Guides were last updated in 1980.

As a result of the evolving level of influence inherent in the social Web, and web in general, the notice incorporates several amendments to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in advertising and blogging, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. Fines for violating the new rule will run up to $11,000 per incident.

Schools try to keep up with the current technology trends, especially in Silicon Valley, the home of technology innovation. You would think that schools in Silicon Valley would be the most up to date on technology—with the latest computers, projectors, drawing boards—but coming from a first hand perspective, as a student at a local school, it’s the complete opposite. I go to a high school where there are no technology classes that even teach students the basics of web development, or video production, or anything of that matter.

Our school just upgraded our computer labs to brand new computers, Windows XP machines, that of course, block Facebook, YouTube, and all those other good “time wasting” sites. Just this year, all the teachers computers got connected to projectors so that teachers can show presentations, documents, etc. Also this year, our school finally got WiFi, but it is password protected and not open to students.

A few days ago, Seesmic CEO Loic Le Meur (@Loic) sent out a retweet with a link to a screenshot of his CTO’s Seesmic Web client showing 1,200 Tweets across nearly 20 columns. The joke was that his CTO was trying to achieve a “world record” for how many Tweets could be loaded up into a Twitter client at one time. (It’s not a world record. Competitor TweetDeck can display an unlimited number of Tweets and columns as well). If you click on the screenshot and pan across the enlarged version of it, there you’ll find a dialog box with Loic’s old avatar doing a hang-10 while kite surfing. The juxtaposition is comical, if a little sad—poor @Loic lost in the overflowing stream of Tweets his company is trying to tame.

The image reminded me of another screenshot (see below) that I once took of an earlier Twitter client called Twhirl, which Seesmic bought before developing its current product. About a year and a half ago, I complained that Twhirl took over my desktop when I first installed it with a constant stream of pop-up messages. I wrote in that post:

This highlights a bigger problem with the Web today. There is too much to pay attention to and not enough ways to reduce the noise.

It’s 18 months later and the problem hasn’t been solved. The screenshot I took back then still resonates because the noise is worse than ever. Indeed, it is being magnified every day as more people pile onto Twitter and Facebook and new apps yet to crest like Google Wave. The data stream is growing stronger, but so too is the danger of drowning in all that information.

The value of venture-backed exits (which is almost entirely M&A these days) might be down about 50 percent in the third quarter, but total M&A activity (including public companies) is seeing a noticeable uptick.

We ran some numbers on Crunchbase, which keeps track of all announced acquisitions, and in the third quarter $31.8 billion worth of acquisitions were announced, double the amount from the second quarter and up fourfold from the $7.6 billion low in the fourth quarter. That number was even up 23 percent from the year before.

This guest post was written by San Francisco Mayor Gavin Newsom, who was elected to the position in 2003 and reelected in 2007. Newsom is also running for governor of California in the upcoming 2010 election. In this guest post, Mayor Newsom announces a contest to create apps using city data from DataSF.org,.

Last week, we announced a City App Store to highlight and centralize software applications developed from government data available on DataSF.org. The response from the community has been overwhelming.

We have received a number of new civic apps that are now featured in the DataSF App Showcase. We’ve added Mom Maps, a new iPhone app that helps you find kid friendly locations in San Francisco, Dadnab a text messaging service that gives you transit directions, and then there’s EveryBlock, which has just added a new feature. The site breaks down what types of services people are requesting from the city by neighborhood, zip code and day.

This type of innovation is exactly what we were hoping for when we launched DataSF.org less than six weeks ago.

We were not sure what people would create with the data, but we knew that many of our talented developers wanted to help improve San Francisco. Now, our community is coming together to help fill our app store with even more civic apps.

The Center for Investigative Reporting’s California Watch reporting team, Spot.Us, Craigslist founder Craig Newmark, MAPLight.org, the Gov 2.0 Summit, Sun Light Foundation and others are announcing today that they are joining forces to sponsor the first DataSF App Contest on Nov. 7.

Despite a couple large IPOs (LogMein and A123Systems) and a steady but tempered flow of mergers and acquisitions, financial exits for venture-backed companies remained anemic in the third quarter of 2009. Data released by both Dow Jones VentureSource and the National Venture Capital Association/Thomson Reuters show declines in both M&A and IPO dollars. VentureSource counts $2.9 billion in combined M&A exits in the third quarter, 49 percent lower than a year ago. The NCVA tallies up a $1.8 billion total, which is down 46 percent.

The two organizations have different sets of data, but they show similar trends. For example, VentureSource counts only the two IPOs mentioned above, whereas the NCVA also counts Cumberland Pharmaceuticals. That’s down from five venture backed IPOs in the second quarter.

Editor’s note: This guest post is written by Shelby Bonnie, the CEO of Whiskey Media. He co-founded CNET in 1993 and was the Chairman and CEO from 2000 to 2006. He served as Chairman of the IAB from 2001 to 2003.

OK, Advertising Week just ended… does anyone else feel like the online advertising industry is the orchestra, playing on while the Titanic is sinking?

We have a problem, folks. And I, for one, think we should start to fix it by killing off the CPM, once and for all.

I have been in the Internet media space for 16 years and will start by stating the obvious: The CPM has done more to stunt innovation and drag down quality products than any single thing on the Internet. Maybe it works in other mediums, but it sure as hell doesn’t work on the Internet. Having been both a small and big publisher (now small again), it’s been my experience that the collective focus on CPMs and counting eyeballs by marketers, agencies, and publishers has led to a whole mess of unintended consequences that have produced a series of “solutions” that work for none of those parties. And perhaps more importantly, it’s been terrible for users.

All campaigns start with the best of intentions: “let’s do something creative, engaging, and unique!” But unless someone really senior from the agency or client side intervenes, the road for a campaign always leads to the media buyer and the dreaded spreadsheet, where the two most important columns are impressions and cost. Ironically, there’s usually some good stuff in campaigns, but they are thrown in for free as “value adds.” At some point, publishers decide that if all clients care about is impressions, then OK, we’ll give them impressions. The output is an industry that overproduces shallow, superficial, commoditized impressions. Why do we have so many bad sites that republish the same junky content–content that’s often made by machines or $1-per-post contractors? Why do sites intentionally try to get us to turn lots of pages with tons of top 10 lists, photo galleries, or single-paragraph summaries of someone else’s story?

What do entrepreneurs want from venture capitalists? A new Cornell study by Ola Bengtsson (now an assistant professor of finance at University of Illinois Urbana-Champaign) and Frederick Wang looked at the stated preferences of entrepreneurs as expressed in comments and ratings on VC-ranking site The Funded. The study, which is based on opinions from roughly 1,500 entrepreneurs about 526 U.S. venture capital firms, tries to assess what they value the most from VCs.

In general, entrepreneurs view independent venture capital firms more favorably than strategic, corporate, or government VCs. They do a pretty good job of identifying which VCs have the best track record (which Bengtsson checked against VentureEconomics data), but just because a VC has a good financial track record doesn’t mean he or she will be the most helpful. And one of the things entrepreneurs value the most from a VC is quick feedback (positive or negative) when they are doing due diligence because time is money, and startups don’t have much of either.

Bengtsson shares some of his conclusions:

There is no question that mobile browsing is taking off. The latest data from Opera shows that nearly 32 million people used its Opera Mini mobile browser in August, 2009, a 147 percent increase over the year before. In terms of pageviews, Opera Mini delivered 13.9 billion last month, a 235 percent annual increase. That means that each person is loading 436 pages a month on their cell phones, or 14 a day. A year ago, Opera Mini users were uploading 323 pages a month, or 10 a day. So both the number of people browsing on mobile phones and usage is going up.

But is Opera Mini the “world’s most popular mobile browser,” as Opera claims in a press release? What about the mobile version of Safari, which is the only browser allowed on the iPhone or iPod Touch. Apple has sold a total of 50 million iPhones and iPod Touches (30 million iPhones, and 20 million Touches), which both come with the Safari mobile browser.

Many of the widgets scattered across the Web are made in Flash, but Adobe doesn’t participate in the widget economy. Today, it is taking a first tentative step towards changing that with the release of a new Distribution Manager for widgets created on the Flash Platform. In addition to making it easier for people to share the widgets across 70 Web and mobile destinations, it will track their usage, and serve as a widget ad network as well.

Adobe is obviously interested in getting into the advertising end of the business, which is why it recently announced it is acquiring Omniture for $1.8 billion. Rather than just getting paid once for the tools to create Web apps and content, it wants to get a piece of those recurring advertising dollars too. The widget distribution play is along the same lines, except that for now Adobe is doing it through a partnership with Gigya, the widget distribution and advertising network. What that means is that any money Adobe makes will be split more ways, but in return it achieves faster entry into the market.

The S&P 500 is up 58 percent from its lowest point last March, the worst of the economic recession seems to be behind us, and even perennial stock market bear Jim Grant is calling for a barn-burner of a recovery, yet predictions of the next stock-market crash are already here. And you can find them on Twitter. Individual traders love to talk stocks on Twitter so much that they have given rise to a whole offshoot service, StockTwits. In fact, some argue that Twitter is becoming a pump-and-dump playground. But it is really no different than the Internet stock boards of old, which mixed honest financial discussion with attempts to manipulate the market with misinformation.

Either way, traders are flocking to Twitter because if there is one area where real-time information is really valuable, it is in trading stocks. The question is, who do you trust and who should you listen to? There are countless stocktwits who are now being joined by more professional prognosticators. One is BAM Investor, which markets its financial model to hedge funds. BAM stands for Behavioral Analysis Of Markets. It uses fractal theory (and the Fibonacci sequence!) to predict emotional mood swings in the market.

About five days ago it predicted that the current stock market rally would crash by 50 percent. It also thinks that Crude Oil is heading down to $56/barrel. But it is bullish on natural gas, predicting a 400% “melt-up”.