Facebook Buys Mobile Data Analytics Company Onavo, Reportedly For Up To $200M… And (Finally?) Gets Its Office In Israel

Big news for a Monday/late Sunday night (depending on where you are): Onavo, the Tel Aviv-based mobile analytics company, has just announced that it has been acquired by Facebook. Onavo will become the anchor for Facebook in Israel — its first office in the country. Terms of the deal have not been disclosed; we are trying to find out. Right now we’re seeing reports of between $100 million and $200 million.

Specifically, Israeli paper Calcalist is reporting $150-200 million; other sources tell us the range is more like $100-$200 million. Both Calcalist and another Israeli paper, The Marker, are writing that some 30 Onavo employees will join Facebook and work in the company’s new office in the country (which is Onavo’s office, for now).

Onavo, which was founded in 2010, has two parts to its business: a consumer-facing apps to help optimise device and app performance and battery life on iOS and Android devices; and an analytics business for mobile publishers to chart how well its own apps are performing, and to chart that against apps of its competitors. It had raised some $13 million in venture funding from investors like Sequoia, Horizons Ventures, Motorola and Magma Venture Partners.

The rationale for the deal is easy to see on a few levels.

Facebook has been focusing on building up its mobile business, which is seeing the most growth and is the platform that most users in developing markets are turning to first when signing up for and using the social networking service, so this means beefing up Facebook’s mobile operations in general. Indeed, the company’s co-founders, Guy Rosen (CEO) and Roi Tiger (CTO) even cite Facebook’s recent Internet.org initiative in the company’s short blog post announcing the deal (below). “Today, we’re eager to take the next step and make an even bigger impact by supporting Facebook’s mission to connect the world,” the pair write.

More practically, though, Onavo will give the company a much deeper technology bench to measure how those mobile services are working — who is using them, and how to make them work in the most optimised way on mobile devices. This can be applied in a number of areas both for basic user experience and commercial ends. (One commercial end: performance of mobile ads.)

It will also be a very strong play to attract more mobile developers to Facebook overall, much like Facebook’s acquisition of Parse last year. Just as Parse gave Facebook its first paid B2B service for developers, it will be interesting to see whether Facebook expand that B2B offering with its new Onavo assets. (For the record, an Onavo spokesperson has just declined to comment on these kinds of details.)

Facebook was reportedly interested in buying Waze, the social/mobile mapping company that eventually got sold to Google. One of the sticking points of that deal (reportedly) was that Facebook wanted all of Waze in Menlo Park’s HQ. Today’s deal shows that Facebook clearly isn’t adverse to having a presence in the country after all.

But Onavo is not the first Israeli company that Facebook has acquired. There have been two others: one also to further its mobile operations, with feature phone interface developer Snaptu (bought for up to $70 million in March 2011); and one to expand its photo sharing and storage platform, acquiring facial recognition specialist Face.com in June 2012 for $50-60 million.

More to come. Blog post below.

We are excited to announce that Facebook has agreed to acquire our company.

Three years ago, we started Onavo with the goal of helping today’s technology consumers and companies work more efficiently in a mobile world. We developed the award-winning Onavo mobile utility apps, and later launched Onavo Insights, the first mobile market intelligence service based on real engagement data. Our service helps people save money through more efficient use of data, and also helps developers, large and small, design better experiences for people.

We’ve built world-class products and a remarkably talented team which has pioneered important breakthroughs in data compression technology and mobile analytics. Today, we’re eager to take the next step and make an even bigger impact by supporting Facebook’s mission to connect the world.

As you know, Facebook and other mobile technology leaders recently launched Internet.org, formalizing Facebook’s commitment to improving access to the internet for the next 5 billion people — this is a challenge we’re also passionate about.

We’re excited to join their team, and hope to play a critical role in reaching one of Internet.org’s most significant goals – using data more efficiently, so that more people around the world can connect and share. When the transaction closes, we plan to continue running the Onavo mobile utility apps as a standalone brand. As always, we remain committed to the privacy of people who use our application and that commitment will not change.

We are incredibly proud of the talented team we have assembled, and, recognizing this, Onavo’s Tel-Aviv office will remain open for business and will become Facebook’s new Israeli office.

We’ll continue to advance the work we are doing in collaboration with Facebook’s great team. Thank you to everyone who has joined us on this journey. We’d like to extend a special thanks to our investors, who believed in us and in our vision from the early days. We’re excited for what’s next.

Ditto Defeats Patent Claim After Teaming Up With A ‘Troll’

Earlier this year, I wrote about a startup called Ditto, which launched a campaign on Indiegogo to fund patent battles against 1-800-CONTACTS and Lennon Imaging Technology — or, as Ditto characterized it, to “save” the startup from “patent trolls.”

Since then, Ditto’s story has taken a couple of turns. Over the summer, the company partnered with IPNav and its founder Erich Spangenberg. Spangenberg is an odd ally, since Ditto co-founder and CEO Kate Endress described him and IPNav as “one of the largest patent trolls in the country.” However, as outlined in an IndyStar article, he reached an agreement with Endress where IPNav is paying for Ditto’s legal costs, and if it wins, it gets a $1 million stake in the startup.

Endress said this approach seems to be working, with Ditto scoring a victory this week. As I mentioned above, the company was actually facing two suits, including one from Lennon, which is a “non-practicing” company that owns intellectual property but doesn’t offer any products or services of its own. A judge has granted Ditto’s motion to have Lennon’s lawsuit dismissed — I’ve embedded the motion and the court order granting the dismissal at the end of this post.

That still leaves Ditto’s case against 1-800-CONTACTS (which is owned by WellPoint). Endress has pointed out in the past that the larger company is suing her startup over a patent that it didn’t acquire until its CEO had visited the Ditto website. The Electronic Frontier Foundation said 1-800-CONTACTS was “little better” than a patent troll, while a company spokesperson sent me a statement claiming that 1-800-CONTACTS “offered to discuss an amicable resolution to the lawsuit through licensing or other options.” (Both sides accuse the other of misrepresenting their discussions.)

So the startup isn’t out of the woods yet. But when I spoke to Endress yesterday, she sounded optimistic — she noted that not only has partnering with Spangenberg given Ditto more resources for its legal fights, but it has also freed the Dittos team’s time to actually focus on building the business (a site where shoppers can virtually try on eyeglasses) again.

And although the Indiegogo campaign only resulted in about $10,000 of funding, Endress said that talking about her story has “resulted in nothing but good things” — she’d encourage other startups facing patent threats to follow Ditto’s lead rather than staying silent.

Oh, and when I asked about how Spangenberg feels about being called a troll, so Endress noted that when asked about using patents to attack other companies, he told the IndyStar, “I don’t stand accused. I stand guilty of that.”

“He’s not doing this out of the goodness of his heart,” Endress said. “He sees a big opportunity here.”

Ditto Motion To Dismiss by TechCrunch

Ditto Court Order by TechCrunch

 

The End Of The Library

A simple link. That’s all it took to unleash a hailstorm of angry emails, messages, tweets, and comments. Why? I dared wonder if libraries will continue to exist in the future.

I mean, it’s not that crazy a notion, right? (Ifyou’re a librarian, you’re not allowed to answer that.)

Last Monday, I linked to this piece by Art Brodsky for Wired from my blog. In it, he argues that beyond the recent hoopla around e-book pricing, the real problem with e-books is what they’re doing to libraries. That is, killing them.

As Brodsky notes:

Imagine walking into a library or bookstore and needing three or four pairs of different glasses to read different books manufactured to specific viewing equipment. Or buying a book and then having to arbitrarily destroy it after say, two weeks. That’s just nuts. But it’s the current situation we’re in with ebooks.

He’s referring to the fact that Amazon, Apple, Google, and others now have their own e-book stores which sell goods which only work on certain devices or within certain applications.

Also, while the economics of e-books at a library should theoretically be better (since there is no more physical product, and any replacements or new copies are just a download away), they’re actually far worse:

Take the example of J.K. Rowling’s pseudonymous book, Cuckoo’s Calling. For the physical book, libraries would pay $14.40 from book distributor Baker & Taylor — close to the consumer price of $15.49 from Barnes & Noble and of $15.19 from Amazon. But even though the ebook will cost consumers $6.50 on Amazon and Barnes & Noble, libraries would pay $78 (through library ebook distributors Overdrive and 3M) for the same thing. Somehow the “e” in ebooks changes the pricing game, and drastically. How else does one explain libraries paying a $0.79 to $1.09 difference for a physical book to paying a difference of $71.50 just because it’s the electronic version? It’s not like being digital makes a difference for when and how they can lend it out.

And so, with these things in mind, it’s hard not to imagine a future where the majority of libraries cease to exist — at least as we currently know them. Not only are they being rendered obsolete in a digital world, the economics make even less sense. One can easily envision libraries making their way to the forefront of any budget cut discussions.

I know this sucks. Libraries have been an invaluable part of human history, propagating our culture and knowledge over centuries. But recognizing the changing times and pointing out the obvious shouldn’t be considered blasphemy. It is what it is.

The internet has replaced the importance of libraries as a repository for knowledge. And digital distribution has replaced the role of a library as a central hub for obtaining the containers of such knowledge: books. And digital bits have replaced the need to cut down trees to make paper and waste ink to create those books. This is evolution, not devolution.

It’s hard for me to even remember the last time I was in a library. I was definitely in one this past summer in Europe — on a historical tour. Before that, I think it was when I was in college. But even then, ten years ago, the internet was replacing the need to go to a library. And now, with e-books, I’m guessing the main reason to go to a library on a college campus is simply because it’s a quiet place to study.

I do recall the last several times I went to a library in high school — it was to borrow some CDs. (Which may or may not have been subsequently ripped onto a computer…)

The point is, times have changed. And things continue to change with increasing speed. So where does that leave libraries?

Undoubtedly, some of the largest, most prestigious libraries will live on. But the people lurking in them may increasingly look like Gandalf in the bowels of Minas Tirith looking through the scrolls of Isildur.

Meanwhile, some other spaces currently known as libraries may live on as cultural and/or learning centers. Others like the notion of using libraries as some sort of newfangled technology demo pits. Tablets over here! 3D printers over here! One article even likened them to Apple Stores.

There is also the notion of libraries shifting their focus to go further up the stack, as it were, to help content creators earn a better living from their writing. Eli Neiburger of the Ann Arbor District Library has written extensively about this. (Multiple people dismayed by my original link, pointed me to Neiburger’s thoughts.)

But even Neiburger admits that this is likely only a possibility for niche and/or independent writers. The big name publishers and big ticket books are never going to go for this. And again, this may mean a future where libraries have less of a focus on actual books.

All of these prospects for the future of libraries sound nice on paper (figuratively, not literally, of course). But I’m also worried that some of us are kidding ourselves. These theoretical places are not libraries in the ways that any of us currently think of libraries.

That’s the thing: it seems that nearly everyone is actually in agreement that libraries, as we currently know them, are going away. But no one wants to admit it because calling for the end of libraries seems about as popular as the Dewey Decimal System.

It’s almost like some people want to interpret anyone talking about the end of libraries as talking about the end of learning — and, by extension, the end of civilization. The reality is that learning has evolved. It’s now easier than ever to look something up. And the connected world has far better access to basically infinitely more information than can be found in even the largest library — or all of them combined. This is all a good thing. A very good thing. Maybe the best thing in the history of our civilization. Yet we retain this romantic notion of libraries as cultural touchstones. Without them, we’re worried we’ll be lost and everything will fall apart.

So we’re coming up with all these other ways to try to keep these buildings open. Co-working spaces! Media labs. Art galleries? We’ll see. But it’s impossible to see a world where we keep libraries open simply to pretend they still serve a purpose for which they no longer serve.

I’m sorry I have to be the one to write this. I have nothing but fond memories of libraries from my youth. Of course, I also have fond memories of bookstores. And we all know how that has turned out…