FocuSoft Tech Blog

Something really, really bad went down at high flying startup Canopy Financial.

This is one of the high flying startups that had a lot of buzz the last couple of years. They’ve raised at least $85 million in venture capital with the help of an investment bank, Financial Technology Partners. Their most recent round, a reported $62.5 million, was funded by Spectrum Equity Investors.

Canopy debuted on the 2009 Inc. 500 List at #12 in terms of the fastest growing private companies in America.

In 2008 CEO Vikram Kashyap said his company had 2007 revenues of $9 million. More recently, we’ve heard, the company was saying they’d hit $60 million in revenue and $9 million or so in EBITDA.

All of this may have been lies.

Until recently all the venture capitalists involved proudly placed Canopy Financial on their portfolio pages. Now all trace of the company have been erased from the portfolio pages of investors GGV Capital, Spectrum Equity and Foundation Capital. And their investment bank has erased them from their trophy page as well. But here’s what these pages looked like very recently:

So what happened? Multiple sources have told us that Canopy was absolutely making up their financial statements, even forging audited statements with fake KMPG letterhead. And somehow the investment bank and all the investors never figured it out.

A call to KPMG before investing tens of millions of dollars would have been a good start, although I have the benefit of hindsight here.

Spectrum took the biggest hit, with their recent $62.5 million investment in the company. And we’re hearing that they’re now suing to try to recover some of that money. One of the early investors, GGVP, may have taken as much as $25 million of the recent round “off the table” from the Spectrum investment, and they’re now a defendant in the lawsuit, says one source.

Canopy’s website right now is a simple information page. All deep links are broken, and the old site has been taken down (we have a screenshot here from a few months ago).

We’ve reached out to just about everyone involved with the company for comment.

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Canopy Financial Accused Of Serious Financial Fraud, Investors Burned

We promised we’d start publishing some of the more entertaining emails we get in our inbox, in the probably ridiculous hope that publicly shaming people may actually lessen the flow of these absurd messages.

A couple of weeks ago we posted a harried email written by a reader looking for legal help (see No, Don’t Sue Facebook. Yes, Do Get A New Boyfriend).

Now we’ve got another one. Hachette Filipacchi Media, which publishes notable magazines like Elle, Car and Driver and Road & Track, wants a little help with their search engine rankings.

The company’s Digital Outreach Coordinator, Automotive Group sent us an email telling us how much they loved a recent CrunchGear post about Ford. They offered to “link to your site on our microblogs to improve your pagerank.”

Hey, great! We love links. But this link requires a little payback. They want us to link two pages on CarAndDriver.com to the anchor text “Ford Vehicle Buying Guide and/or Ford Flex Buying Guide.”

We get reciprocal link spam emails all the time (all sites do), but it’s rare for a large brand to engage in link farming so boldly. For that, we salute them (and we passed it on to Google’s Matt Cutts).

The full email is below, with the links as they suggest them. We’ve added nofollow tags, but since the email doesn’t specify that we can’t do this, we’ll expect our links back shortly.

From: [removed]@hfmus.com>
Date: November 18, 2009 4:18:11 PM EST
To: “‘tips@crunchgear.com’”
Subject: Question for Matt

Matt,

I read your article on Ford’s efforts to cut down on petroleum usage by using wheatgrass as an alternative in its third row storage container. This concept is extremely interesting and I would love to be able to either refer your post on one of my microblogs or link to your site on our microblogs to improve your pagerank.

What I would need from you is to place either in the article or really anywhere you think on your site that makes sense: Ford Vehicle Buying Guide and/or Ford Flex Buying Guide.

Let me know what you think!

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Email Of The Week: CarAndDriver Launches Bold Online Link Farm Strategy

Woot, the popular bargain site that offers one good (sometimes great) deal a day, has just launched a new portal at deals.Woot. The new site is a fairly major departure for Woot, which up until now has been driven by product selections from a team of Woot employees (aside from the main Woot.com site, which is often tech/geek focused, there are special subsites for shirts, wine, and a handful of others). Unlike these sites, Deals.Woot is run by its users — it’s essentially a Digg for bargains.

The new site features a list of top deals, as voted on by the community and chosen by the Deals.Woot algorithm. This will be going head to head against other deal sites like SlickDeals and FatWallet, which have well established communities. Woot already has plenty of fans, but it may take some time to build out a base of deal hunters.

But the very top of the site actually isn’t dictated by users. Instead, it’s dedicated to “Sponsored Deals”. Woot explains that these deals are paid for by advertisers, but that they’re still bargains:

OK, yes, companies pay a little something to be Sponsored Deals. But we don’t allow just any old crap in this section. Sponsored Deals are proposed to us by other retailers, manufacturers, and even other daily deal sites. If we find the deal compelling enough that our members will appreciate us bringing it to their attention, we’ll feature it here. Believe it or not, we have a reputation to uphold.

The site has been available for weeks before now, but was only available until members up until a few hours ago.

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Digg For Bargains: Deals.Woot Is Now Open To The Public

Now this is cool. Some of the hype over Google Wave has died down over the last few weeks, in no small part because most people have absolutely no idea how to use it (no, the 80 minute long video demo doesn’t help). Now it looks like the Wave team has another idea up their sleeves to show people the power of Wave: they’re using it to recreate famous documents.

This time they’re reconstructed the Declaration of Independence, complete with edits and comments from the founding fathers. My US History is a bit fuzzy, but there are plenty of obvious jokes nestled in here, and I’m sure the Googlers have included a few more subtle ones as well. Unfortunately, it looks like you’ll have to have a Wave account if you want to witness the creation of one of the United States’ most important documents. But we’ve tried to grab a few of the key moments in the screenshots below.

As a demonstration of what you can do with Wave, the document succeeds in some respects. But frankly it can still be confusing to tell what’s going on. For example, when the founding fathers are casting their votes, the Wave only says something vague like “Thomas Jefferson edited this message” — it’s up to you to figure out what he did.

According to a tweet a few minutes ago from Wave team member Lars Rasmussen, the idea to create famous documents came from Tim O’Reilly. Hopefully we’ll be seeing more of these soon.

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We Hold These Truths To Be Awesome: The Founding Fathers Give Google Wave A Try

It seems that flight delays could turn into a big business. FlightCaster, the startup that helps predict flight delays long before the airlines themselves usually do, has just landed a $1.3 million funding round led by Tandem Entrepreneurs and Sherpalo Ventures. FlightCaster previously recieved money as part of the Y Combinator program. Today the company is also launching a new API, which developers can learn about here.

FlightCaster’s goal is simple: it wants to let you know when your flight is delayed as early as possible. Using a variety of data sources and complex algorithms, the service will alert you whenever it thinks one of your flights will be delayed, along with an explantation of the factors that contributed to its prediction. And so far, it seems to be working — co-founder Jason Freedman says that four hours below takeoff, Flightcaster manages to predict ten times as many delays as the airlines do. And they manage to stay 90% accurate (which is on par with the airlines).

Back when I first wrote about the startup, I questioned how helpful knowing about a delay in advance really was. After all, FlightCaster’s notifications state that a flight will probably be delayed. But sometimes they’re not, so it isn’t wise to show up at the airport a few hours late. Freedman says the FlightCaster team had the same concerns, but that there are two discrete sets of users who value the service. The first group of users (which is where most people fall) just like having a heads up that their flight is delayed, mostly so that they can warn friends and co-workers that they might be late.

The second group loves FlightCaster for a different reason: they will change their plans if there’s a possibility of a delay. Freedman says these tend to be frequent fliers (likely business travelers) who don’t want to get caught in delay limbo and are willing to pay to swap flights even if a delay isn’t certain.

It’s this second group that will likely prove most valuable to FlightCaster. The company is currently in talks with a number of major travel sites (and even some airlines) to integrate their predictions. Freedman won’t get into specifics yet, but he says some of these partners are interested in helping frequent fliers rebook their flights as soon as there’s a delay alert.

Along with the parters FlightCaster is already talking with, other developers will be able to tap into the Flightcaster API for a fee.

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FlightCaster Takes Off With $1.3 Million In Funding And A New API

Though it has yet to take off in a major way, the idea behind video comments remains a potentially compelling one. And after seeing some success using its video platform to serve up videos on Twitter, Vidly thinks it can crack the case. And Grammy-winning hip-hop star Chamillionaire and the popular blog commenting system Disqus are helping them try to do that.

Launching today, Vidly Express is a way to use Vidly’s video platform on any site for visitors to add video comments or responses with the click of a button. And using celebrities like Chamillionaire is an obvious example to get the service some traction. As you can see on his own site, he’s already using it to good effect. But Chamillionaire isn’t just any celebrity endorser, as we learned first hand during this year’s TechCrunch50, he’s actually in tune with a lot of interesting things going on in tech — and uses the stuff, so his endorsement is a solid one.

Adding the Vidly Express widget to your site is as easy as copying a short script and pasting it in your code. Or if you have the Disqus commenting system implemented on your site, Vidly Express can be turned on with the flip of a switch. Disqus has actually tried video commenting before, with Seesmic, but since they’ve shifted away from the video space, Vidly is a more natural partner. And it’s better.

“While Vidy Express in DISQUS retains the familiarity of the Seesmic implementation, the major difference is that it takes advantage of distribution channels and network effects.  Video responses may appear in the user’s Twitter stream and soon on Facebook,” Vidly founder Chrys Bader tells us.

Back in August, Vidly changed its name (from Twitvid.io) and decided to shift its focus towards all kind of video and away from simply being a “video Twitter” service. But Twitter remains an important element of the service, and they recently launched the first HD video option for it.

Both Vidly and Disqus are Y Combinator startups.

[photo: flickr/anuj biyani]

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Ridin’ Vidly: Chamillionaire Helps Launch Realtime Video Responses, Vidly Express

Online video ad rates keep coming down, but that could be a good thing. BrightRoll, a large video ad network, is reporting that cost-per-thousand (CPM) rates for pre-roll video ads across its network are down on average by 37 percent from a year ago, but total revenues across its network are up 84 percent. Cheaper ads are leading to more spending by advertisers overall.

The chart above shows average CPMs on BrightRoll’s network indexed to 100 at the beginning of 2008. The average CPMs are now in the mid-teens, and seem to be leveling off. They were down 4.5 percent from last quarter.

BrightRoll says online video advertising started a rapid post-recession comeback in the first quarter of 2009 (which is about when video platform company Brightcove starting seeing an uptick in business also).

The third quarter saw an acceleration video advertising. BrightRoll tracked a 46 percent increase in the number of video ad campaigns, compared to the previous quarter, 31 percent more advertisers, and a 64 percent increase in requests for proposals (RFPs). If BrightRoll’s data is indicative of the industry as a whole, online video advertising should remain a bright spot this year.

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BrightRoll: Video Ad CPMs Are Down 37 Percent, But Ad Revenues Are Up 84 Percent

Remember that hubbub a few weeks back about Seth MacFarlane’s Family Guy advertising Windows 7? But the show was apparently deemed to raunchy so Microsoft replaced Family Guy with Warner Bros. Well, did you catch last night’s episode? There was a Family Guy segment that certainly looked like an advertisement and was then followed by a regular Windows 7 commercial. Check out the video after the jump. It makes you wonder if there is more to come and the deal isn’t dead after all.

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Family Guy Advertised Windows 7 After All

As a blogger, sometimes the most difficult part of writing a post is contacting the company it is about. First, you either have to search your contact list, or the web, to figure out who to reach out to. And then you might not get a response right away. And finally, if you do get a response, it may include misdirection or less information than you’d like. All of these things led to the idea for a new startup, Plato’s Forms.

To be clear, the communication problems run the other way too. Sometimes companies would love a better way to talk to journalists before they publish a story. Plato’s Forms would offer that communication pipeline. The idea is to make it easier for the two sides to communicate on any given story, so the correct information is shared with the readers.

And this communication isn’t meant to be necessarily be filtered through a PR agency (unless the company wants it that way), it’s more about direct interaction. This is meant to cut out all possible noise and just get to the signal of what trying to be communicated, in a timely manner.

Plato’s Forms would charge the companies a subscription fee to use this service, but it would be free to journalists. And this isn’t just meant for big enterprises, they envision that startups would use a tool like this as well.

Since the product won’t launch until next Spring, co-founders Darryl Siry and Ben Metcalfe didn’t have a demo to show just yet. But I’m told that the method of communication will not just be another email or IM tool. And the core of the product is the communication platform, so it will work with a number of different applications, presumably.

The company’s name is derived from the philosopher Plato’s Theory of Forms, Siry tells us. Basically, the thought is that humans can’t understand the true nature of things, but can only interpret it. And different humans have different interpretations. Plato’s Forms (the company) wants to get those more in sync.

Plato’s Forms has just closed a seed round of funding to the tune of $545,000 (but the note has been left open to accept up to $750,000). The round was led by a group of angels (including Siry) and Zelkova VC.

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Plato’s Forms Gets Seed Money To Open Dialogue Between Bloggers And Companies

When it comes to the mobile Web, increasingly there are only two mobile platforms which matter: Apple and Android. According to AdMob’s October, 2009 mobile metrics report, the iPhone/iPod Touch and Android phones accounted for 75 percent of mobile Web traffic in the U.S., as measured by all the mobile ad requests it tracks. That number is up from a combined 65 percent in September, 2009.

The iPhone is miles ahead of everyone else, but Android is quickly rising as a strong second. While Android phones managed to increase their share from 17 percent in September, 2009 to 20 percent in October, 2009, the iPhone and iPod Touch gained even more, going from 48 percent to 55 percent share. Meanwhile, during that same month the Blackberry ’s mobile Web traffic share went down from 14 percent to 12 percent, and Palm’s webOS shrank from 10 percent to 5 percent (Ouch).

On a global basis, the iPhone OS now accounts for 50 percent of all mobile traffic, up from 43 percent the month before. Android has an 11 percent global share, which makes it third globally after Nokia/Symbian’s 25 percent share. The U.S. makes up 49 percent of all the mobile Web traffic, according to AdMob’s stats. Thus strength in the U.S. translates to strength in the worldwide numbers.

As major new carriers come onboard, the numbers can shift dramatically. Since Verizon launched the Droid two weeks ago, that single device now makes up 24 percent of all Android mobile Web traffic. The HTC Dream, which is the oldest Android device, is the only one with more, at 36 percent of Android traffic. I wouldn’t be surprised if the Droid passes that within the next two weeks.

AdMob was recently acquired by Google for $750 million. Hopefully, it will continue to share this mobile market share data in the future.