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from the L.A. Times

Category: E-Commerce

Elevator Labs: an L.A. start-up building L.A. start-ups

Hello Music

Elevator Labs is one of a growing numbers of start-ups in Los Angeles hoping to raise the profile of L.A.'s tech scene.

But this start-up isn't making any one specific product. Rather, Elevator Labs is in business of building start-ups.

With $20 million in funding to feed Elevator Labs, the new firm is an incubator looking to start L.A. companies based off of ideas thought up by its founders, two former Virgin Digital executives, Zack Zalon and Brendon Cassidy.

The first idea to make it to market and available to the public is Hello Music, an online marketplace that offers musicians discounts on recording and performance gear and studio time.

Hello Music's discounts are offered directly from manufacturers and studio owners and on a limited basis. It's not an online storefront that regularly stocks anything, but rather a deals site aimed at unsigned artists who'd normally be left out of such discounts, Zalon said.

For more than a decade, Zalon and Cassidy have been working together, first at Virgin Digital for more than seven years and for the last five years, running a company of their own called Wilshire Media Group that focuses on product design and development for the entertainment industry.

Elevator Labs, unlike Wilshire, is focused on bringing the ideas Zalon and Cassidy come up with to life.

"What Virgin, and Richard Branson in particular, is incredibly good at is taking ideas that other people have and executing them very well," Zalon said. "Ideas are really great but it's execution that really makes the difference. That's the big thing we learned while working at Virgin and we've been primarily doing the same thing with Wilshire Media Group.

"Now, we're investing in ourselves. Hello music is the first but we have other projects coming and we're working to build, incubate, fund and execute and launch L.A. companies."

Although the ideas behind the companies will originate from Zalon and Cassidy, the two entrepreneurs won't be running every company that comes out of Elevator Labs.

"We literately are starting the companies from nothing but an idea, putting the right people in place and we're hands-on effectively operating the companies until they are ready to go and be launched to the public," he said. "Ultimately, we have a team of entrepreneurs that we're working with to hand the company over to so they can operate the company on their own. And if a company can't run on its own, we won't launch it."

Zalon said entrepreneurs looking for a Y Combinator-like experience of mentorship or a start-up school won't find what they're looking for at Elevator Labs.

Instead, he pointed to Bill Gross' Idealab in Pasadena and Applied Minds in Glendale as examples of companies that create companies in-house, outside of a more traditional incubator model that welcomes and educates a rotating cast of entrepreneurs.

"If an L.A. entrepreneur sent me an email I'd definitely want to find a good place to point them," Zalon said. "But we're not a venture capital firm and we're not a start-up accelerator.

"Elevator Labs likely won't even impact a lot of consumers, but what were hoping we can do is impact the community of entrepreneurs here in L.A. by working on our ideas and making them successful here in L.A. and contributing to the success of L.A. as a city where innovation takes place. The success that we have will hopefully attract more funds, more entrepreneurs to Los Angeles."

The next business Elevator Labs hopes to launch is FatCloud, which Zalon calls a "supercharger for Microsoft.net," a set of software tools that is looking to simplify creating and managing applications built by developers using PCs.

A start-up factory isn't a new idea, but that's not the point, he said.

"Really, what makes Elevator Labs different is Los Angeles itself," Zalon said. "I believe there is a culture in Los Angeles that gets embedded in the products that are developed in Los Angeles. If we don't show off the talent that is here in L.A., the creativity, the entrepreneurs here, they're going to keep taking off to the Bay Area or New York to start their companies.

"And while there is a huge amount of creative activity around technology, interactive, et cetera in Los Angeles, most of that action is taking place in the traditional space of film and entertainment. We want to be one of the companies that shows that L.A. can also be innovative in the other sides of the tech industry."

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Image: Screen shot of Hello Music, a deals site for musicians. Credit: Hello Music/Elevator Labs

Best Buy: Free Nexus S phones with 2-year contract, one day only

Best Buy free Nexus S offer

Have you been eyeing the Nexus S smart phone? If so, today might be a good day to move on that.

All-day Wednesday Best Buy is giving away Nexus S phones to those who sign a two-year contract with either AT&T, Sprint or T-Mobile for the device at a Best Buy store or on Best Buy's website.

Normally, the Nexus S sells for $199.99 or $99.99 from Sprint.

The phone -- built by Samsung and featuring Gingerbread, the latest version of Google's Android OS for phones -- is essentially the same across the three carriers, except that the Sprint version of the Nexus S is a 4G handset, while AT&T's and T-Mobile's Nexus S runs on 3G networks.

All three versions of the phone come in a blacked-out colorway, feature a 4-inch screen, a 1GHz processor, front and rear cameras and 16GB of memory.

The deal ends online Thursday, and in-store when a Best Buy location closes.

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Image: A screenshot of Google's and Samsung's Nexus S website advertising Best Buy's one-day free Nexus S deal. Credit: Google /Samsung

Federal scrutiny could stymie Groupon IPO

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Groupon's $750-million initial public offering might have to be delayed until late September because of questions from federal regulators over the financial data the group-buying coupon website has provided so far, according to a report from CNBC.

Groupon detailed a bit of its IPO plans in a June filing with the Securities and Exchange Commission and in the documents said, among other things, that its IPO would be made up of both new shares and shares belonging to current investors.

On Wednesday, "unnamed people" familiar with the SEC's standard review of the company's filings were "reporting that the process may take longer than usual for Groupon due to 'nonstandard financial measures' the daily coupon company used," CNBC said.

However, the financial news cable network also said that an analyst it spoke with said a September IPO wouldn't be abnormal as the SEC usually takes about 3 months to review such documents before a company issues public stock for the first time.

CNBC said that one of the accounting metrics it has been told the SEC is taking an extra look at is Groupon's gross profit.

"Used as a gauge of revenue, this is the amount Groupon keeps after giving a portion of each sale to its merchant partners," CNBC said. "But the figure excludes marketing and administrative costs, raising questions about its usefulness."

Officials from Groupon were unavailable for comment on Wednesday.

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Photo: The Groupon logo is displayed on the company's website in Chicago on June 2, 2011. Credit: Scott Olson /Getty Images

Munch On Me, a deals site for restaurants, expands to West L.A.

MunchonMeWestLA

Munch On Me, a San Francisco-based start-up, is hoping to be the first thing you think of when that ever-recurring question arises: "What do I want to eat?"

The company's website, MunchOnMe.com of course, is a foodie's take on the hot streak of deal-offering sites that have popped up in recent years (sort of like Groupon, LivingSocial and Woot!). But, unlike other deals sites, Munch On Me isn't waiting for others to take part in a bargain before one can nab a discount out in the real world.

Munch On Me offers specific food items -- just individual items, not entire meals -- for a week, at  discounts that vary by restaurant. Usually, each week, three or four items are up for grabs and as soon as users buy an item, they can redeem their discount.

The start-up, coming out of the Mountain View, Calif., tech incubator Y Combinator, launched this week in West Los Angeles and is offering three discounted items -- a "specialty donut" at Stan's Doughnuts, a $5 wine tasting card at the Pourtal Wine tasting bar and a Stand Dog (hot dog) at The Stand.

And to kick things off for Munch On Me, the first three discounts are sizable: 100% off. Free. Gratis.

Free is exactly the kind of deal co-founder and CEO Jason Wang would have loved to have been offered a bit more while in college at UC Berkeley, where met the company's other three co-founders: Richard Din, Andy Zhang and Tony Li.

"In college, I ate out just about every meal and I had to think about what am I going to eat for every meal, every day," Wang said. "When I got out of college, I got a job at Google and they feed you breakfast, lunch and dinner and it made me realize I didn't have to think about that anymore. And that made me realize how helpful something like Munch On Me could have been to me in college and for everyone else who doesn't work at a company that feeds you."

After about nine months at Google as a risk analyst, Wang and his friend Din, who was working as a  software engineer at Electronic Arts, broke out on their own and hired Zhang to lead Web development and Li to handle sales.

The site launched appropriately in Berkely and the East Bay area as its first market in February and is currently offering weekly deals there and in San Francisco, as well as in San Jose and the South Bay.

"So far, the response has been really good," Wang said. "We've had a lot of restaurants wanting to return and do more deals with us and often, when people get a deal from us, they'll buy something else at the merchant, too, because our deals aren't full meals. We usually do an appetizer, a drink, a meal, a dessert, all at different places."

After some success in the site's first three markets, rolling out to West Los Angeles was a no brainer, he said.

"West L.A. is dense, and the food is really good, and our users have been asking for us to add West L.A. for a while now," Wang said.

The company is hoping to launch into Seattle sometime in August and sometime after that in Orange County, Chicago, New York and San Diego. The planned expansion will call for more new hires; part-timers who can meet with restaurant owners, shoot photos of food and write up copy on all the edibles that are featured, he said.

The team is also working on building out a mobile website, as well as apps for Apple's iOS and Google's Android, Wang said.

"Our market is really the whole world, because everybody eats," he said. "We're just getting started, but we want to be the go-to service when you ask yourself everyday 'what am I going to eat today.' People turn to Facebook for social networking, LinkedIn for professional networking, Amazon to buy things, Craigslist to sell things -- we want to be that for food."

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Image: A screen shot of Munch On Me's first meal deals in West Los Angeles. Credit: Munch On Me

Google AdWords credit card available for advertisers

Google is testing a credit card for customers of its advertising service on its search engine.

Google has rolled out a credit card for customers of its advertising service.

The AdWords Business credit card is the tech leader's first and will be used to offer a select number of Google advertising customers a line of credit at an 8.99% interest rate with no annual fees. The MasterCard can be used only to buy advertising through AdWords, Google's unit that sells ads on its popular search engine.

"We are beta testing the AdWords Business credit card with a small group of our U.S.-based advertisers," a Google spokesperson said. "AdWords is a tremendous driver of growth for small businesses, so we think it makes sense to give them a more attractive way to pay for AdWords."

Initially, the credit card will be made available only to a few of Google's customers in the beta testing stage, which is the typical way Google launches new products (just as the tech giant has done with Google+ and Gmail before). Invitations -- yes, you need an invitation -- went out to customers Wednesday.

The card, Google confirmed, is geared toward small businesses that might want to push heavy ad campaigns ahead of busy sales season but lack the funds to do so.

World Financial Capital Bank is the issuer of the Google credit card. Reuters was the first to report on the Google credit card.

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Image: A screen shot of Google's search engine. Credit: Google

Harry Potter partners with Google, snubs Apple and PayPal

Pottermore.com will be the only place to purchase eBook versions of the Harry Potter films.
Google has joined forces with the most famous wizard in the world, Harry Potter, which could mean a big boost for two of its services while also resulting in a huge missed opportunity for Apple and PayPal.

The partnership with the new Pottermore website by Harry Potter author JK Rowling will make the e-book version of the seven Harry Potter books available on Google's eBooks reader. The deal also makes Google's payment service Google Checkout the official third-party form of payment for Pottermore.

By partnering with Google eBooks, Rowling has found a way to put her seven highly-in-demand books on smartphones, tablets, e-readers and computers without having to split the sales with companies such as Apple or Amazon, who typically keep about 30% of sales.

Rowling's distribution method gives publisher's more leverage when it comes to selling e-books, said Craig Vodnik, chief blogger for BuildingKeystones.com, a blog about digital product e-commerce.

"It could be a really, really big deal if this works out based off the titles she's written and she's just so well-known," he said. "From the publisher's perspective it's a big deal because it could give them some control over how they distribute their products."

Vodnik said Google landing Rowling is similar to when Apple finally got the Beatles on their iTunes catalog.

"The Beatles sold so many albums and had so many songs," he said. "Rowling is the same in that perspective, but she is much more current and she could put out more titles. She could actually be more influential over the next 20 years."

In what must have been the trade-off in the deal, Google's payment service Google Checkout appears to be the only way besides debit or credit cards to purchases the books from Pottermore. The inclusion of Google Checkout is a huge snub for PayPal, the original and most used third-party payment service online. Instead, Google Checkout will be exposed to millions of Harry Potter fans looking to buy digital versions of the wizard stories.

In the last few months, Google has been strengthening its push into the e-commerce and mobile payment fields, announcing recently it had begun testing a service called Google Wallet, which allows consumers to pay using their Android phones using a technology called NFC.

The Harry Potter books could become the most purchased e-books upon their release if the franchise's performance at the box office and at book stores are any indication. The final Harry Potter film had the best opening of all time, scoring $168.6 million in the U.S. and Canada in three days. Four years ago, the last Harry Potter book had a similar release, selling 8.3 million copies in its first day, according to Guinness World Records.

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Image: A screenshot of Pottermore. Credit: Pottermore

Isis signs-on American Express, Discover, MasterCard and Visa

Isis

Isis, the mobile-payments venture from AT&T, Verizon and T-Mobile, scored a major win Tuesday, signing deals with credit card powerhouses American Express, Discover, MasterCard and Visa.

The deal will give Isis the ability to link smartphones to credit cards from four of the biggest names in the credit card industry, and it pushes the venture past both Google Wallet and Sprint's own wave-and-pay service, which are both set to work (for now) only with MasterCard.

All three competing services offer the same thing -- using a smartphone as a mobile wallet allowing consumers to pay for goods by waving phones over scanners (a technology also known as near-field communication), rather than having to pull a credit card out of a purse or wallet.

Sprint, the third-largest mobile carrier in the U.S., has said it's working to launch its service before the end of the year. Google Wallet is up and running -- but only about 1 in 100 MasterCard-accepting retailers currently allow mobile payments and only the Nexus S 4G phone (available from Sprint) can be used.

Isis, which was announced last November, is slated to launch in 2012 in Salt Lake City and Austin, Texas.

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Image: In a screen shot of an Isis video, a woman demonstrates making a purchase with her cellphone. Credit: Isis

Adobe buys e-signature company EchoSign

Adobe EchoSign

Adobe Systems has taken over EchoSign, an electronic signature automation firm in Palo Alto.

EchoSign, founded in 2006, has about 3-million users and allows users to place digital signatures into business documents that can then be tracked digitally as they get sent to intended recipients without ever printing out or faxing a paper document.

The company says its cloud-based technology is legally equivalent to printing out and signing a document by hand and it works on desktop computers, mobile phones and tablets. Neither Adobe, based in San Jose, or EchoSign said how much the purchase deal is worth in announcing the deal on Sunday.

"Together, our aim is to make electronic signatures the standard way for people to sign documents and automate contracting," Jason Lemkin, EchoSign's chief executive said in a blog post. "Adobe's PDF solutions and document exchange services platform have helped organizations turn inefficient, paper-based workflows -- like overnight envelopes – into streamlined electronic ones."

EchoSign's technology will be integrated with Adobe's Acrobat PDF reading and editing software and other paperless document exchange services "including SendNow for managed file transfer, FormsCentral for form creation and CreatePDF for online PDF creation," Lemkin said.

Kevin M. Lynch, Adobe's vice president and general manager of Acrobat digital enterprise solutions, said in a statement that EchoSign will help push "significantly reducing the time, cost, and complexity associated with getting a document signed" electronically.

"With just one click, the EchoSign electronic signature solution automates the entire signature process from the request for signature to the distribution and execution of the form or agreement," Lynch said. "What’s more, there's nothing to download or install."   

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Amazon.com launches Kindle textbook rentals with up to 80% off

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Amazon.com launched Kindle textbook rentals, promising "tens of thousands of textbooks" at discounts of as much as 80% less than purchase price on Monday. 

Students can rent a textbook for as little as 30 days or up to 360 days, with fees differing depending on how long the book is rented, Amazon said in a statement.

Rentals can be read on Amazon's Kindle eReaders, as well as Kindle apps for Macs and PCs, as well as smartphones and tablet computers running Apple's iOS, Microsoft Windows Phone 7 and Google's Android operating system.

Once the rental period for a textbook is up, students can choose to either purchase books or rent them again if needed for a period as little as one extra day, the Seattle-based online retailer said. 

Among the publishers offering rentals through Amazon are John Wiley & Sons, Elsevier and Taylor & Francis

"We've done a little something extra we think students will enjoy," said Dave Limp, vice president of Amazon's Kindle unit. "Normally, when you sell your print textbook at the end of the semester you lose all the margin notes and highlights you made as you were studying. We're extending our Whispersync technology so that you get to keep and access all of your notes and highlighted content in the Amazon Cloud, available anytime, anywhere -- even after a rental expires. If you choose to rent again or buy at a later time, your notes will be there just as you left them."

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Photo: An Amazon Kindle e-reader on top of an Apple iPad, which can run a Kindle app for reading e-books. Credit: Kodomut via Flickr

Amazon.com's rumored tablet could launch in October, report says

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Amazon.com has been rumored for months to be working on a tablet computer, and now the Wall Street Journal is reporting that a tablet from the world's largest online retailer could go on sale as soon as October.

The Amazon tablet would feature a 9-inch touchscreen, a bit smaller than the Apple iPad's display, and would be released along with two new versions of the company's popular Kindle e-readers, according to the Journal.

One of the new Kindle models would have an electronic-ink touch screen, putting it on par with newer e-readers such as the Barnes & Noble Nook and the Kobo eReader Touch Edition. The other new Kindle, the Journal said, would stick with a keyboard, as the current Kindles have, with no touch-display features.

The Amazon tablet, meanwhile, would run on Google's Android operating system -- no surprise there. The company has been setting the stage for such a move for months. In March Amazon launched its Appstore for Android, one day after Apple sued the retail giant alleging trademark infringement over the name of the online storefront, which sells apps for smartphones and tablets running Google's Android OS.

On Monday, Amazon launched a Digital Bonus program that gives consumers $15 worth of credit to buy apps, music and books in digital formats from Amazon when they buy an Android device through Amazon. This is a promotion to get Android owners thinking of the Seattle-based retailer as the place to go to get digital content for their new Google-powered gadgets.

The main competitor to the Amazon Appstore for Android isn't Apple as much as it is Google's own Android Market which sells apps, movies and e-books, too.

Apple's iPod wouldn't have been as appealing without iTunes there to sell users music. The iPad, in the same way, wouldn't be as attractive without the App Store (built into iTunes and on devices) there to sell users games and other apps as well as books and magazines and tons of other content.

Amazon is already selling content for Android devices, it just doesn't yet sell an Android device of it's own. That, if the rumors pan out, could change soon.

Amazon is a retail company first and foremost: Books, CDs and DVDs have been its lifeblood. The company has been able to duplicate that success in digital goods -- e-books, MP3s and now streaming and downloadable movies from its Amazon Prime service.

The Kindle has been a huge success for the company and is the most widely used e-reader on the market. Amazon has never said how many Kindles it has sold but in May it disclosed that its customers now buy more e-books than dead-tree print books.

The Journal report, which cited unidentified sources, said Amazon's tablet would be built by an Asian manufacturer and would not have a camera. Those moves, if true, could help keep down the device's costs and make it more comparable to Barnes & Noble's Nook Color tablet than an iPad.

Could releasing an Amazon tablet put the retailer at the forefront of selling mobile apps? Amazon hasn't disclosed any of its plans in this area, but many pieces of the puzzle are already in place.

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Photo: Jeff Bezos, founder and CEO of Amazon.com, introduces the first Kindle at a news conference in 2007. The e-reader launched at a price of $399. Current Kindle models sell for as little as $114. Credit: Mark Lennihan / Associated Press

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