TechFlash: Seattle's Technology News

Zulily CEO Darrell Cavens wasn't looking for fresh capital. But when the former Blue Nile executive received interest from August Capital for his company's new private-sale shopping service, he decided to pull the trigger. Zulily today is announcing a new $6 million round, which follows a $4.6 million round from Maveron last December.

"We've been very, very excited about the momentum we are seeing," said Cavens, who launched the online private shopping service for kids' apparel, toys and other goods earlier this year. "It certainly wasn't due to us needing it, which is a good place to be." The money will be used to fuel growth, with Zulily expected to nearly double its staff of 40 by the end of the year.

Shakil Haroon, GM with Brazil's Spring Wireless. (Marcus Donner/PSBJ)

Shakil Haroon, a former manager in Microsoft’s mobile business, is the Seattle-based general manager for Spring Wireless, a Brazilian company that makes mobile software applications for big companies. The company established its U.S. headquarters in Seattle last year.

Haroon's past experience at Microsoft and current work in enterprise mobile software gives him a unique perspective on trends in the world of smartphones and mobile devices. Continue reading for edited excerpts from our conversation.

Microsoft this morning filed its annual Form 10-K with the Securities and Exchange Commission, a treasure trove for anyone digging for nuggets of information about the company. The first one that jumped out at me: Microsoft made more money selling companies than it spent buying companies in its last fiscal year.

The company says it spent $267 million to acquire five entities in its 2010 fiscal year -- a small fraction of its available balance of more than $31 billion in cash and short-term investments. That was down from $925 million on nine companies in fiscal 2009.

Meanwhile, the company says it sold three companies "for total consideration of $600 million" during the year. One of those companies was Razorfish, the advertising agency picked up in Microsoft's $6 billion purchase of aQuantive in 2007, which Microsoft sold to Publicis Groupe for $530 million last year. The other two aren't identified.

Ever wanted to track down a funny line from a TV show, movie or comedy act? If so, then you'd feel right at home with Entertonement founders David Aronchick and Fouad ElNaggar who started their Seattle company three years ago after reciting lines from the 1980s classic thriller "War Games." The 15-person Internet startup now has thousands of audio clips spread among dozens of channels, including those devoted to comedian Will Ferrell, the hit movie "The Hangover" and even Nintendo's "Super Mario" franchise. Entertonement is attracting about 10 million visitors each month as it looks to become the one stop destination for sound bites. We caught up with Aronchick, a former Microsoft manager, for the latest installment of Startup of the Week.

What’s your elevator pitch — in 140 characters or less... Entertonement is the YouTube for sound bites. Our goal is to let people express themselves through the universal language of pop culture -- also known as sound bites.

Best Buy is getting into the broadband wireless business -- with the help of Kirkland-based Clearwire. The companies today announced a partnership by which the giant electronics retailer will utilize Clearwire's 4G network for a new service called Best Buy Connect. The service is slated to begin next year, and it marks the first time that Clearwire has inked a wholesale agreement with a company outside its group of strategic investors. (Including Comcast and Sprint).

"This agreement paves the way to providing one-stop shopping and support for mobile broadband as more people become more connected across all kinds of devices. We believe consumers will appreciate the added advantage of relying on Best Buy Connect for both 3G and 4G mobile broadband services beginning next year," said Jed Stillman, vice president of Best Buy Connect, in a statement.

Wordsmiths and linguists could spend countless hours debating the origins of quirky names of Internet companies. After all, this is an industry which has transformed words like Yahoo and Amazon and introduced monikers like Cheezburger and Zillow. But have you ever really wondered how startups come up with their names?

Chris Johnson -- also known as The Name Inspector -- digs into that issue in his latest post in which he analyzes more than 400 names from Seattle 2.0's Startup Index. What does Johnson find? Interestingly, he notes that Seattle startups tend to prefer phrase names -- monikers like BuddyTV, ActiveRain and BigOven that combine two words together.

A big thanks to the more than 400 of you who joined us Wednesday for one of our favorite annual events, the TechFlash Summer BBQ and Ping-Pong Tournament, at the Showbox Sodo. The action on the tabletops was top-notch, the crowd was great, and we had fun catching up with people from across the Seattle tech community.

And who knew someone would come dressed up as a tree?

Team Banyan Branch, Spirit Award winners at the TechFlash BBQ and Ping-Pong Tourney. (Photo by Marcus Donner.)

That was the team from social media agency Banyan Branch (pictured at right), which took home the coveted Spirit Award thanks to their unique display of corporate pride -- coming out ahead of the stylish homemade getups worn by Blue Box Group and the, um, eye-catching matching pants sported by the team from online real estate firm Findwell (pictured below).

But the big winner of the night was a familiar name, ping-pong wizard Valeri Kim, representing tech consulting company Akvelon, who successfully defended his TechFlash title to take home the championship in the expert bracket. He overcame Minh Le of Silicon Valley Bank in a rematch of last year's final.

Valeri Kim, representing Akvelon, successfully defended his TechFlash title with a championship in the expert ping-pong division. (Marcus Donner photo)

Despite the loss in the final, Le's second-place finish earned him one of the best prizes of the night -- three hours of free lessons at the Washington Table Tennis Center in Bellevue, which brought some masters of the sport to the event to entertain the crowd with an incredible exhibition on a side table (starting at the 1:50 mark in the video above).

The Ping-Pong and Foosball tourney at the Showbox SoDo.

Oh, what a night. More than 400 people crowded into the Showbox Sodo for the second annual TechFlash Summer BBQ, Ping-Pong and Foosball tournament. Here's a look at some of the scenes from the big event, courtesy of photographer Marcus Donner.

We're broadcasting live from the TechFlash summer bash. So, just in case you can't make it out for the fun, check out the live stream below. Things get rolling around 4 p.m. with the first ping-pong matches and foosball games.

Who do you think will take home the big prizes in ping-pong, foosball and the coveted "Spirit Award?"

Dashwire has raised $515,000 in a convertible bridge financing round, money that the Seattle upstart will use for undisclosed partner deals scheduled for this fall. Dashwire, which provides a mobile phone backup service that allows users to sync contacts, photos, music, text messages and other mobile content with an online Web service, raised $1.1 million from Trilogy Equity Partners and others last fall.

Led by former Microsoft product manager Ford Davidson, the four-year-old company already has some key partnerships sealed. Last fall, Dashwire entered into an agreement with Best Buy to power its newly-launched mobile phone backup service m:IQ. Davidson said that deal is progressing, with the company last month rolling out the service for Android devices. (It's also available on Windows Mobile, Symbian and Blackberry devices).

Walking around the packed gdgt live event in Seattle last night, we were surprised at the large crowd pushing into Microsoft's booth -- until we realized that the company was demonstrating Windows Phone 7, giving people a glimpse of something they won't see in stores for a few months.

These were hard-core technology users, the types of people that Microsoft would like to win over to help turn around its mobile business. So we took the opportunity to ask for their impressions.

Dark clouds still hang over the venture capital industry despite a slight improvement in initial public offerings and mergers & acquisitions. Cambridge Associates and the National Venture Capital Association today issued a report showing that 10-year returns -- perhaps the most important measurement of the industry --were a negative 3.7 percent for the period ending March 31.

Sources: Cambridge Associates, Dow Jones, Standard & Poor's, Thomson Datastream.

As shown in the chart above, VC returns for the 10-year timeframe were worse than the Dow Jones Industrial Average which was up 2.3 percent for that period. Venture returns still outperformed the Nasdaq, which was down 6.3 percent, according to the U.S. Venture Capital Index. But the negative returns over the 10-year period could cause trouble for venture firms as they contemplate raising more capital in 2011 or 2012.

HemaQuest Pharmaceuticals has raised an additional $4 million in financing from Latterell Venture Partners, bringing total funding in its series B round to $16 million. The Seattle company is working on therapeutic treatments for sickle cell disease, with the new cash to be used for two of its drug candidates (HQK-1001 and HQK-1004) to moved through Phase 2b clinical trials. Other investors in the company include Aberdare Ventures, De Novo Ventures, Forward Ventures and Lilly Ventures.

The Walt Disney Company's acquisition of fast-growing social gaming startup Playdom for as much as $763 million will be closely watched in Seattle. After all, both Playdom and Disney maintain operations here.

The Disney Interactive Media Group -- which traces its roots in the region back to the old Starwave -- provides much of the back-end technical infrastructure for the company's digital media offerings. Meanwhile, Mountain View, California-based Playdom, which has more than 35 million active monthly users, maintains a game studio in Seattle and expanded its presence here earlier this year when it acquired Bellevue's Offbeat Creations.

Frisch

Kevin Frisch, who previously worked in marketing positions at Blue Nile, Snapfish and ProFlowers, has joined Seattle upstart Doxo as vice president of marketing. Doxo is working on new technologies that allow consumers to easily switch to paperless billing, helping large corporations like wireless carriers and utilities save money in the process of eliminating the paper waste.

Doxo is a well funded startup having previously raised $5.25 million from Jeff Bezos' venture capital arm, Bezos Expeditions, and the venture capital firm Mohr Davidow Ventures. The company is led by Steve Shivers who previously worked at Qpass and InfoSpace.