It’s not often a partner at a successful venture capital fund leaves to do anything except retire (although there is some evidence to the contrary). But Will Price, a general partner at Hummer Winblad Venture Partners, has resigned from his firm and, as of today, is the CEO of widget startup Widgetbox.

The company has raised $14.5 million from Hummer Winblad, Sequoia Capital and Northgate Capital. Hummer Winblad has been around since 1989 and has invested $620 million of so in startups. Price feels that Widgetbox is poised to take advantage of the huge surge in widget usage. And if the AOL acquisition of Goowy and the recent Slide valuation is any indication, there’s lots of room to grow for Widgetbox.

I asked Price to write a guest post telling us why he made the decision to leave a very safe and very lucrative job and enter the very unsafe and risky world of startups again. His post is below, although it can largely be summed up in this post, too. If you want to follow Price’s regular updates, his blog is here.

My name is Will Price and until yesterday I served as a General Partner at Hummer Winblad Venture Partners, an early stage venture capital firm that was founded in 1989 (investments include TheKnot, Napster, HubPages, Omniture, Powersoft, Hyperion and others). While passionate about the firm and the venture industry, I am leaving Hummer Winblad today to take the CEO role at one of the startups I invested in – Widgetbox.

Michael Arrington kindly offered me the chance to explain my decision to leave venture capital and to join Widgetbox as the CEO. While the detail follows, in summary the combination of my personal aspirations to return to an operating role and my passion for the widget market and the company (which I helped seed fund) made this a no-brainer move for me.

My logic:

The best markets and the best companies ride the tide of history. Widgets are such a market.

The Web’s tide is open, distributed, standard, user-defined, and, in many ways, the most powerful force of the modern era. Widgets are not a fad, or web 2.0-hype, but fundamentally they are the unit by which users are assembling and defining their web experience.

Widgets are portable applications that are user-defined, user-assembled, and consumed independent of the source of the underlying content, commerce, and application functionality. The combination of user-control and decentralized interaction to important services represents an important paradigm shift in how users discover, select, and consume the best of the web.

In Nov 2007, Comscore reported that 650m global uniques, or 65% of the web universe, interacted with a widget. The growth in widget adoption and social media speaks to users’ unmet needs and frustrations with traditional web models. Today, brands, developers, media companies, and established Internet players are racing to understand the forces driving user behavior and the power of a more componentized and distributed web. While widget penetration is at 65% of Internet users and growing, spend in the widget category in 2007 was less than $20m, or 0.1% of the total online ad spend
market.

The 650x differential between spend and the record growth in user adoption is very powerful to consider. Users are always ahead of the market, as evidenced by the systemic under-allocation of ad dollars on-line; 21% of media consumption is on-line vs. 7% of ad spend. However, this 3:1 imbalance is steadily eroding and the widget market will prove to be no different and no less transformative. Traditional portal models that aggregate users and resell that aggregation are fundamentally at odds with the emerging paradigm of user and community defined experience and distributed consumption.

Marketers need to fish where the fish are, however, in an early market there are often more questions than answers. While widgets are enjoying end-user success, the commercial relevance of widgets remains unclear to many. Are widgets a new marketing channel? If so, are they effective? How do you build them, buy them, track them? What is the unit of value; an impression, an install, an engagement…? What type of ecosystem will form around the phenomena? In order to move beyond fad status, an economic model for the widget ecosystem needs to be better developed and measurable value delivered to both end-users and marketers.

Widgetbox, along with Slide, Rockyou, Goowy, Clearspring, Gigya, and others, is working to enable users, developers, brands, media houses, and incumbents to ride the tidal wave of web componentization.

Widgetbox, backed by Hummer Winblad, Sequoia Capital, Northgate Capital, and Michael Dearing, is the web’s largest gallery of widgets. Widgetbox’s growth in the past year has been extraordinary, with a current monthly audience of 30m uniques, 400m monthly widgetviews, and widgets installed across 230,000 domains.

For those of you who read my blog, you know that I am passionate about the venture capital industry and its importance in supporting innovation and entrepreneurship. As a General Partner at Hummer Winblad, I enjoyed the exposure and access to some of the key innovators and drivers of the new economy; company’s like Omniture, Move Networks, Mulesource, Widgetbox, and many others. At 36, however, I felt a persisting and important pull to embark on a new journey of growth, discovery, and learning.

In my career to date, I have found that if you follow your heart, work tirelessly, and fish in good waters, good things will happen. For Widgetbox and our colleagues in the space, good things will continue to happen if we stay true to the web’s architecture of openness, distribution, and standardization and to users’ passion for empowerment, expression, and need for community.

On Monday AOL will announce the acquisition of San Diego-based Goowy, a startup founded in late 2004 and which launched, incidentally, in my living room in late 2006 (we had a TechCrunch party where Goowy, Meebo, Sphere and other startups launched). The size of the deal is not being disclosed.

Their first product was a Flash-based webtop or alternative operating system. But later they went into the widget space with their YourMinis product, and that is the reason AOL has acquired them.

AOL SVP of Social Media, Messaging and Homepages David Liu said this was a deal they’ve been considering for the last nine months, and that they plan to integrate Goowy’s technology into both user-facing AOL products (to widgetize them) as well as their Platform A advertising network. Expect Platform A to launch significant new advertising products in the widget space soon, Liu says.

This is a significant win for Goowy founder and CEO Alex Bard, who has run a tight operation over the years. The company has just six employees and raised a single round of financing from Mark Cuban in April 2006 (the size of that round remains undisclosed, but it was almost certainly under $1 million). He says the Goowy team will remain in San Diego for at least the short term.

Goowy competes with a number of startups in the widget advertising space, including Widgetbox, ClearSpring and Gigya. VideoEgg, Slide and RockYou also compete in this area.

AOL has been busy acquiring promising young startups – they bought Israel-based Yedda last November as well.

Personalized desktops are a crowded space. Startups compete for attention against the big three of myYahoo, iGoogle and Live. TechCrunch last covered Yourminis in November 2006 with Michael describing it as a solid product, however it’s not a name many would recall in the space.

Since then Yourminis, a service from Goowy media has taken a different approach to most of its competitors. Today, with the assistance of Adobe’s Apollo platform and some clever thinking Yourminis delivers a triple play of widgets: online personalized desktop widgets, actual desktop widgets and blogs widgets.

The emphasis on widgets delivers a different experience for Yourmini’s personalized desktop. Where as you might be stuck with a 2 or 3 column layout at iGoogle, Yourmini’s layout is as fluid as you want it to be; users can drag, drop and resize widgets on the desktop to their hearts content. It’s also pretty; users have the ability to fully customize colors or upload wallpaper delivering a superior aesthetic appearance.
Yourmini’s newly supported ability to place widgets on the actual computer desktop using Apollo is a nifty step. The extensive range of widgets may not defeat a Mac user’s library, but it would go close to having a superior range to Google Desktop or Windows Vista Sidebar, and as they are the same widgets as used on the online desktop they’re good looking as well.

The ability to export widgets to any blog or website rounds out the widget triple play. There are other sites and services that offer this functionality and the ability to embed widgets is either embraced or disliked depending on the person you’re speaking to. Then again, it’s not a separate widget offering but the same widgets as are available on the personalized desktop with the same level of customization; this has definitely a positive.

One of the most compelling things about the widgets on Yourminis is the depth of customization. Depending on the particular widget, options can include text size, what to include with a feed (headlines/ X text etc..), colors, image background and feed settings. It’s a focus that really helps Yourminis stand out from its competitors. Yourminis have been nominated in the Webware 100 awards and rightly so. It’s a really good offering with a little something for just about everyone.

And yes: they also have a pretty TechCrunch widget as well.

YourMinis is a Flash-based customizable homepage product that will compete for users with a number of similar products that use Ajax – Netvibes, Pageflakes, Google, Live.com and more. This was launched by a startup called Goowy, which created a flash-based productivity suite (email, calendar, IM, etc.) last year – see here for our Goowy coverage.

Goowy CEO Alex Bard gave me a demo of the product at the Web 2.0 Summit this week. YourMinis is a solid product, offering completely customizable modules like RSS feeds, Flickr photos, YouTube videos, POP Email, etc. Users can create multiple tabs to better organize information, and any tab can be turned into a public URL and shared with friends. They have also published an API and allow third parties to create modules which will be available to all users.

YourMinis also has a browser extension that makes it easier to add information to the site. Videos, photos and RSS feeds can added to a user’s YourMinis page by simply clicking on a button added to the browser. This is particularly useful for subscribing to RSS feeds – a module is automatically added to YourMinis based on the auto-discovered feed.

There are other interesting features on the site as well that are worth exploring, and YourMinis is certainly a showcase for what can be done with Flash.

San Diego-headquartered Goowy (a Mark Cuban investment) just publicly launched the enhanced IM and storage products that I tested last month. Goowy users now have Meebo-like IM funtionality built directly into their Goowy desktop, and 1 GB of free online storage via a partnership with Box.net.

Goowy has also rolled out significant enhancements to their email client, including a three-pane view that looks and feels a lot like Outlook. Goowy is turning into an excellent desktop replacement – users can choose to use a Goowy email account or Pop in whatever email service they currently use (including Gmail). CEO Alex Bard tells me that over 100,000 people have logged in and used the Goowy email client in the last 90 days.

Everything is currently free…Goowy will layer in paid premium services down the road. You can also try Goowy without registering through their demo account.

Goowy is slowly rolling out its new web instant messaging and online storage services to users. I showed screen shots (provided by Goowy) earlier this month, and have now had a chance to use the features directly. My overall impression: Goowy is turning into a very nice Flash-based desktop replacement, but has some issues to work out on performance.

Instant messaging compatibility is good (think Meebo – which I’ve written about here). You can use MSN, Yahoo, ICQ and AOL accounts or talk to other Goowy users directly. Setup was easy, and it worked flawlessly. A number of emoticons are supported. My only complaint is that the first message you send to anyone says “(Sent using goowy web messenger. Check it out at http://www.goowy.com )” which is annoying.

Goowy IM does not yet support group chat, although CEO Alex Bard says that is coming. Another nice feature is the ability to pull a chat window out of the browser window and into its own resized window on the desktop, to look and feel more like a standard IM client.

Online storage (see image at end) is a very nice feature add as well. They haven’t built this themselves. Instead they are using the box.net API on the back end. Goowy is giving every user 1 GB of free storage, with 5 GB for $5/month coming soon. Given the new pricing benchmarks set by Amazon recently, I expect these prices to come down over time. Goowy storage has a straightforward uploading tool, and files can be tagged and set to private, public or shared.

The only issue I saw with the storage feature was on performance – it was very slow. This is understandable given that the product is still in very early private alpha and I would expect speed to increase dramatically prior to public launch. Box.net needs to add support for a client based uploader too, at the earliest possible date.

Goowy is backed by Mark Cuban (as is Box.net) and other investors. Traffic continues to rise steadily and they seem to have a very loyal user base based on comments left on this blog from previous writeups. It’s way too early to say what Goowy’s fate will be, but I am encouraged to see them (as well as Netvibes) begin to distance themselves from the pack.

Goowy is turning into a lot more than just another ajax/flash home page – its a full on desktop platform that is shaping up to be the best competitor to Microsoft’s Live.com.

I’ve written about Goowy, which is Flash based, a number of times (scroll down after clicking link), and had a chance to see a current product demo at an event last week.

Goowy is now preparing to roll out additional functionality, including integrated instant messaging (look out Meebo) and online storage (via a partnership with box.net, using box’s new API). If you are a Goowy user, look for these features to be included with your account over the next couple of weeks.

Instant Messaging

Goowy is releasing instant messaging functionality to its users. It will work with Yahoo, MSN, AIM, ICQ and any Jabber client. There is also a Goowy to Goowy IM network, and the IM is integrated into file sharing, email, etc. Web based IM is definitely the “in” thing right now, with Gtalkr, Google, Meebo, e-messenger and Mabber with their own product offerings. For Goowy, this is yet another feature to give users an excuse to move to them for a full desktop experience.

File Storage

Goowy has integrated with Box.net’s API to offer customers the ability to upload and store files with the Goowy service. Theres a limit on file size – 5 mb – that’s too small, although they are giving users a full 1 GB for free. Files may be shared with a group of friends or publicly, and folders and sub folders, as well as file tagging, is supported. They have also integrated a Flash media player to play music files directly on Goowy. Goowy is also offering premium accounts with more storage and no file size limitations.

As Goowy continues to roll out new high end features, users are steadily migrating to the site (see Alexa chart). The revenue play for them is (in addition to premium features) to get users to stick to the site for a long time, checking email, using the calendar, instant messaging, etc. This stickiness can generate a lot of ad impressions, and revenue, for the company.

Alex Bard’s flash-based desktop replacement Goowy, based in San Diego, has impressed me from the start. We originally profiled Goowy on August 17, 2005 and again a couple of weeks ago.

Today Goowy released further functionality. First, they increased storage from 100 MB to 2 GB. While that storage is only for use with email now, they will soon be releasing a virtual file storage product, allowing users to really put that 2 GB to work.

Second, Goowy released a flash-based desktop application that allows you to access core Goowy features without going to the site. Email notifications, RSS updates, calendar items, etc. are included. The look and feel is very much like Konfabulator, but we’ve noticed no performance issues on our machine as we did with that service.

If flash is your thing (and maybe even it if isn’t), Goowy is for you. Let us know what you think of it.

Goowy is a browser based desktop tool built on Flash. See our August 17, 2005 profile of Goowy for additional information.

Until recently, Goowy’s main draw (other than it is extremely fast) was a very nice email application. Goowy also allows access of your regular email account in the Goowy UI via pop.

New Features

Goowy has launched new applications on their flash platform.

The two key new beta products are a calendar and a basic RSS reader. The calendar application is tightly connected to email, and the feature base is as good as most ajax calendars we’ve reviewed. With these additions the suite of products is now becoming much more useful.

In the near future Goowy will also be creating a virtual file storage product and allowing email pop into and out of Goowy. Virtual file storage will have an optional desktop application allowing for simple drag and drop access of files into Goowy.

They’ve also made the strategic decision to open their API to developers for the creation of new desktop widgets.

Pricing

Pop email access (in and out), email and file storage beyond 100 mb to the 2 gb range and other Goowy premium products will be priced at around $20 per year. The core products will remain free

Company: Goowy
Founded: August 2004
Launched: April 2005
Location: San Diego

Overview:

Goowy has rebuilt a number of commonly used applicatons (like email) in Flash. It includes traditional web services such as email, contacts, calendar, games and widgets. Goowy is highly interactive and, as you’d expect with a flash application – fast. Visually it is a very beautiful site as well, and I wasted a good amount of time today playing around with the applications (including some very addictive games).

Goowy is one of the first full featured internet applications that uses Flash 8. For more detail, see Mike Schleifstein’s post on Goowy, although I disagree with some of the conclusions in this post – Ajax, xforms and other technologies are gunning for some of these same applications right now.

Flash-heavy sites are, however, currently quite trendy, and Goowy seems to be one of the best implementations. While flash can be heavy work for some simple stuff, Macromedia’s current efforts with Flex (as Mark Birbeck tells me) will make Flash a lot easier by using a high-level language on the server.

Once you’ve registered for the service, a virtual desktop appears that allows you to access the various applications. The email application is excellent. You are assigned a goowy address (ours is techcrunch@goowy.com), and it also allows users to POP into Goowy from other accounts. Alex Bard, Goowy’s CEO, tells me that they are expanding email capabilities in the near future.

Alex also tells me that Macromedia has been very supportive of Goowy, which explains how they have grown to 30,000 users with virtually no marketing:

Macromedia has been a great partner to us. They have supported us in both marketing and development. We have been mentioned in several Macromedia press releases including the most recent Studio 8 release. In addition we have been their site of the day several times (most recently on Aug 9th). In addition we are working with them on more awareness / marketing initiatives in the near future which are very exciting.

Alex also wrote to me about upcoming features:

We have some very exciting functionality in our development lab right now. In the next 30 days we are releasing an advanced calendar and some other “fun” features. In addition we have virtual desktop storage, wireless integration, video streaming, widgets, open APIs, and more in development. It is going to be an exciting time for goowy over the next 6 months.

Goowy’s business model includes advertising and, later, premium subscription pricing and licensing of the platform. They have 8 employees.

Team:

Alex Bard – CEO
Gary Benitt – COO
Jeremy Suriel – CTO / Chief Architect
Sashi Bommakanty – VP Product Development

Additional Links:

Javed Mandary (interview with Alex Bard), Oman3D, Psychopalaestra