Xobni, a plug-in that tries to improve email organization in Microsoft Outlook, has raised $7 million in a second round of venture financing.

Xobni’s most prominent feature is an inbox sidebar that shows profiles of people you’re corresponding with. By making related content (phone numbers, past messages, files exchanged, and more) immediately accessible, Xobni helps you avoid fruitless or time-consuming searches through giant piles of email; Microsoft founder Bill Gates (somewhat hyperbolically) called it “the next generation of social networking.” Xobni also makes it easier for other web services to interact with Outlook, including Yahoo Mail, LinkedIn, and Facebook. I believe VentureBeat Editor Matt Marshall is the only Outlook user on our team, but he praised Xobni for improving his email efficiency.

The San Francisco startup faces plenty of new competition. For example, I’ve been impressed with Postbox, another startup that wants to tackle email overload. A German Outlook plug-in called Lookeen even brags about being a better search tool than Xobni. But that alone should tell you that Xobni is making a big splash — it’s been downloaded 1.5 million times. One of the company’s goals for 2009 is moving into bigger, “enterprise”- level companies. The fact that Cisco joined the new round is certainly a vote of confidence in this direction.

Xobni, which was incubated by Y Combinator, previously raised a $4.26 million first round. Prior investors Khosla Ventures, First Round Capital, Baseline Ventures and Atomico participated in this round too.

With an initiative called BizSpark, software giant Microsoft is making a new pitch for startups to run their business on Microsoft’s tools.

It’s an enticing free upfront three-year package, bundling together software, support and promotion for no upfront cost — requiring merely a $100 payment when you leave the program. It’s an aggressive move by Microsoft to ensure that technology startups at least consider using Microsoft’s tools when they are putting together their initial infrastructure — and comes a time when competitors are bidding for the business of those same startups by offering them low cost, often open source alternatives.

Dan’l Lewin, vice president of strategic and emerging business development, says that Microsoft has already put a number of startups through a trial of the program, and the company plans to enroll thousands of startups in 83 countries in the next six months or so. The participants are nominated by BizSpark’s hundreds of “network partners” — including the National Venture Capital Association, The Indus Entrepreneurs and other economic development agencies, university incubators, hosters and investors — and must meet three criteria: They must be a private company, less than three years old and making less than $1 million in annual revenue.

If they meet those criteria, companies will get a free three-year license to Microsoft software and servers including Visual Studio, Windows Server and Microsoft SQL server. They will also get access to business and technical support from the aforementioned network partners, and they will be promoted on the Microsoft Startup Zone site. Microsoft already been targeting startups through the Startup Zone (and related programs such as the Startup Accelerator), but Lewin says that was aimed at venture-backed companies with global ambitions. It sounds like BizSpark will be reaching a much broader range of companies.

With the negligible cost, BizSpark presents a pretty irresistible offer to startups, especially in tough economic times — assuming you’re willing to build on Microsoft’s platform. Less charitably, you could look at this as Microsoft’s effort to stay relevant in a world where startups can choose to build on many competing platforms, and as more and more startups are moving towards a cloud computing model, where Microsoft is playing catchup to companies like Amazon, Google and Rackspace. When asked why Microsoft  is launching BizSpark, Lewin cites a lyric from the Talking Heads song Once in a Lifetime: “Same as it ever was.”

“Microsoft has always been about the developer community,” he says.

He adds that BizSpark isn’t about forcing companies to use Microsoft products exclusively, so the initiative will support interoperability with other platforms and services.

There are already some notable startup names signed up, including Xobni, which offers a powerful way to organize your email in Microsoft Outlook, and ZocDoc, an online medical appointment-making service backed by big names like Amazon’s Jeff Bezos, Khosla Ventures and Salesforce.com’s Marc Benioff.

ZocDoc chief executive Cyrus Massoumi says Microsoft approached him to join the program at this year’s TechCrunch50 conference, where ZocDoc had a booth. The startup has now been part of BizSpark for about six weeks, and although the service was already built on Microsoft’s platform, Massoumi and chief technology officer Nick Ganju say the program has already paid off by connecting them with expert help when needed, and helping them increase the site’s security and scalability.

The free software is nice, Massoumi says, but he’s even more excited about “being able to get access to people at Microsoft who are building these products. This is stuff that we couldn’t buy.”

Before the advent of the written word, the story goes, humans had to either store all their memories in their own heads, or by oral tradition passed down through designated members of their tribes. With trade came notation of facts and figures, and later alphabets, books and libraries. With them came the modern brain, which treats recorded knowledge as an extension of itself.

Throughout these developments, previous generations have grumbled that each new advance leaves us worse off — take this month’s issue of the Atlantic, which includes a feature story titled “Is Google Making Us Stupid?” by Nicholas Carr. Yet Google’s search-and-retrieve functions are only the tip of the Internet iceberg, when it comes to memory. A whole new generation of efforts to move our memories online is in the works, and may represent one of the biggest upcoming movements in computing.

Pensieve, an IBM technology, is the latest project to unveil itself. The idea, being able to snap pictures of business cards and people with your cell phone for later retrieval, sounds almost identical to Evernote, a company I reported on a month ago when it came out of private beta. That doesn’t mean IBM is copying; rather, that IBM is taking the most obvious tack first. Business cards (as well as receipts and other short, printed matter) are easy for image recognition software to read.

The problem right now is that the low-hanging fruit is fairly limited. Recording is easy — so easy that a Microsoft researcher has been doing it for nine years, saving photos, videos, web pages, and nearly everything else he interacts with.

Each of those capabilities is now duplicated for regular people. “Life casting” became a minor fad with Justin.tv last year, and more recently Qik’s had its public launch. Other companies like Kyte also offering video and picture feeds from your mobile phone, all of which can potential be saved. Emails have always been possible to save, although companies like Zimbra and Xobni have since added much more functionality, while Xoopit helps search through mail. For web pages, there are bookmarkers like Del.icio.us, and upcoming services like Twine, whose private beta I’ve started using to save my web ramblings, although the service itself still needs plenty of work.

However, there’s still a lot missing. First, you need an integrated storage spot for all this material. Hard drives die, photo sharing services go down, email accounts are hacked. It’s likely that in the future web companies will exist that offer ironclad storage for all your data — meaning the complete, unedited record of your life. Storage services abound right now, but users will want something special for storing their lives.

Almost as important are editing services to narrow all the incoming data to points, which can be disseminated across Facebook feeds, weblogs and other public forums. If you really did record your whole day today, you’d have to spend a lot of time searching out the moments that mattered and tagging or annotating them for immediate use or later retrieval. The more automation exists, the more people will record parts of their life.

Search and editing, in fact, are choke points that may stunt the growth of a memory industry. But then, there are trends that suggest otherwise. Image recognition, driven by advertising uses, is advancing rapidly under the care of companies like Blinkx and Viewdle. Voice recognition has stalled researchers for years, but companies like SoliCall and VoiceBox may yet offer a working solution.

Once software can recognize pictures, video and audio in addition to text, the work passes on to the growing ranks of semantic startups. Twine itself isn’t just a storage point for web pages; it’s attempting to add structure through automatic, intelligent tagging so that when you’re trying to find something you’ve saved, it’s easy. (A similar effort not yet out of stealth is called Qitera.)

Such startups will represent the first set of technologies that can truly help establish external stores of memory. Simulating short-term memory early startups like ReQall and Jott, both now available on the iPhone, already help with day-to-day reminders.

Our long-term memories are the tougher nut to crack, but there’s a wealth of opportunity in automated journals, work streams and research logs, not to mention data mining services that can help us manage our time better (RescueTime is an early example). And a true integrated service may be closer than it seems; take a look at Numenta, which is working on a “hierarchical temporal memory system (HTM) patterned after the human neocortex.”

And when all these things exist, what will happen to our memories? As the Atlantic article suggests, we may find that the net effect is to “scatter our attention and diffuse our concentration,” — or, as it argues in another part, we could spur a “golden age of intellectual discovery and universal wisdom.” The result may well depend on the quality of the efforts.

Microsoft’s Kevin Johnson moves to Juniper Networks — Microsoft’s lead on the failed Yahoo acquisition has called it quits, heading for the top post at software and device firm Juniper Networks. Johnson was the president of Platforms and Services, which meant he oversaw most of Microsoft’s web initiatives.

Xobni’s first employee heads to the Xobtuo — Gabor Cselle, a vice president and the first official employee at email startup Xobni, has resigned, stating that he wants to start his own company. Given his past experience and expertise, the new venture will almost certainly be email-focused as well.

Hackers continue to step up attacks in 2008 – Security firm Sophos has published research on the first half of the year, showing that malware levels continue to rise on the web. Businesses, also, are increasingly being used as both targets and launching points for attacks.

Humanoid robot soon for sale — No, it’s not the next-gen Realdoll. A French company called Aldebaran Robotics is preparing to sell its NAO humanoid robots for about $15,000 each. That’s far cheaper than the competition from Fujitsu and Honda. Of course, quality is the real issue, which is why you should actually use the money to go buy a whole herd of Pleos.

Space: The last (solar power) frontier — Sending up satellites to harvest solar energy and beam it back down to earth might be a bright idea, according to this New York Times Op-Ed. The solar crowd already contains many space cadets, so the scheme should work well.

Amazon doubles net with soaring sales — The web retailer bucked the market trend and posted unexpectedly strong results, reporting doubled second-quarter profit on a 41 percent increase in revenue.

Google’s Schmidt says the iPhone is good for Android — Top exec Eric Schmidt told an interviewer that he believes the iPhone is good for Google’s upcoming Android platform, at Fortune’s Brainstorm Tech event. The device, he said, has forced competitors to step up and make their own versatile handsets combining GPS, a camera, a computer and a browser.

Cisco acquires Pure Networks — The communications and IT giant paid $120 million for Pure, which was funded by Bessemer Venture Partners, Ignition Partners, Mayfield and Intel Capital, according to John Cook.

Passwords safe, San Francisco accuses admin of IT terror — The bizarre tale of a San Francisco city employee imprisoned for refusing to hand over the passwords to a city network continues, even now that the man has passed the password to smooth-talking mayor Gavin Newsom. The new accusation is that the felony suspect rigged the network to “implode”.

Classic Nintendo controllers at risk of extinction — The judge in a patent case relating to three of Nintendo’s older controller designs will ban sale of the controllers this morning. Nintendo can temporarily get out of the ruling by posting a bond, which it will do, along with filing an appeal.

Photo credit for Kevin Johnson: Fortune magazine.

Big Facebook profile changes are coming, sure to impact developers — Facebook has been experimenting with a ground-up redesign of its user interface for months, that it hopes will improve communication among users. Now, the company is providing Facebook application developers with more details on the changes — and how those changes are going to affect applications. The new home page will have a tabbed interface for news feed, personal info, photos, and something tentatively called “boxes.” The “box” tab will house Facebook applications (see screenshot, above), although the apps will also appear in various forms within the other tabbed sections. Perhaps most significantly, the news feeds themselves will include a new range of ways for applications to share stories with Facebook users who haven’t already added the application. If you’re interested in the many, many changes happening, see this detailed post by Justin Smith of the blog Inside Facebook and application company Watercooler. The official preview site here.

Meanwhile, Facebook is seeing an overall drop in the number of new applications that grow quickly, and a probably-related drop in the number of developers working on the platform — even as the site continues to grow around the world. So these profile changes are part of a far-reaching initiative by Facebook to make the site more usable; the company has previously, for example, placed ever-more restrictive measures on app developers, to try to curb abusive practices like spam-emailing users. All in all, these changes will likely benefit Facebook users, the company, and the higher-quality applications, as another top Facebook app developer, Jesse Farmer notes here. The open question about the profile redesign is how Facebook is going to manage explaining the changes to its users.

News Corp. earnings report: MySpace, FIM miss revenue targets — News Corp. executives admitted yesterday that they weren’t monetizing MySpace and other social networking properties like they’d aimed to — bringing in $900 million in revenue versus $1 billion. Surprisingly, quarterly revenue actually declined from $233 million to $210 million. A number of pundits have jumped on this news to surmise that social networks may never monetize very well, as you can read over on Techmeme. But overall, monetization has actually been improving across a number of fronts at MySpace, as Silicon Alley Insider details, even if it’s not as fast as News Corp. chief executive Rupert Murdoch wanted. For example, MySpace is actually earning 49 percent more money per-user compared to last year even as the user base continues to grow, partially through efforts like better-targeted ads. And many forget that monetizing social networks is not just about banner ads. We’ve covered companies that are creating new ways of doing things like distributing music or creating sports communities — companies that are helping to drive ticket sales for live events, apparel sales and other non-banner-ad forms of making money. Basically, social networks are in the process of becoming businesses and there are lots of unexplored opportunities. Here’s another one: Online video, which benefit greatly through being distributed on social networks, also have the opportunity to make money, as blog HipMojo notes.

Fuel cells coming soon to your GPS device? — MTI Micro has introduced a methanol-based fuel cell prototype, essentially a new and longer-lasting form of battery, for GPS devices.

Comcast may introduce a new fee system targeting people who habitually download large files — More here.

Email organizer Zaplets technology bought by email startup Xobni — Zaplets was developed in 2000 to turn long strings of back-and-forth emails into single emails, with the most recent information being displayed most prominently on each message (which sounds not unlike Gmail to me). Zaplets’ parent company, FireDrop had raised more than $100 million, with venture investors including Kleiner Perkins Caufield & Byers. It went bust, some of the patents ended up with an “enterprise process management” company called MetricStream — and have now been bought by email analysis startup Xobni. Zaplets’s problem was that it was ahead of its time, Xobni chief executive Jeff Bonforte tells Techcrunch. So, look for Zaplet technology in Xobni.

MeeVee bought, finally — The Burlingame, Calif. company offers a sort-of TV Guide-style site for online videos. But gaining only around 1.1 million monthly active users after raising $27 million since it was founded in 2000, MeeVee decided last month to try to sell. It has reportedly succeeded, selling to Live Universe for an undisclosed price.

Xobni, the San Francisco company we raved about last year that offers a way to better organize your email from Outlook, is launching publicly with its test version.

Its key feature is a sidebar in your inbox that shows you profiles of the people you’re corresponding with. It makes information easily accessible, such as their phone numbers, past correspondence and files you’ve exchanged with them. We mentioned last week its work to join Microsoft and Yahoo’s email offerings.

It’s a download, which is its main obstacle for adoption, because people are lazy. But Xobni thinks it’s useful enough to overcome that.

Founder Matt Brezina said 140,000 people have signed up for a test account, but he’s let only 50,000 use it so far. Now the beta is open for everyone.

The company has spent a lot of time debugging the service, and making it lighter. There was a point when I was forced to uninstall the service because it slowed my Outlook too much. It’s now a lot faster.

Xobni is using viral marketing to spread the service. When you download it, and it starts indexing your email, it will notify you of interesting factoids, such as who you most frequently correspond with, who responds to you the most quickly, and who within a particular domain name responds to you the most quickly. It then gives you a way to email those people, to invite them to download Xobni too.

Notably, Xobni is also working with third party developers to allow them to build applications with Xobni. By allowing third party integration for its APIs, Xobni becomes a trojan horse for those third parties to access Outlook integration through a plugin. Microsoft Outlook doesn’t offer a friendly set of APIs for people to plug into Outlook, and so Xobni hopes to be come the place developers come to for such access. Salesforce is a good example. If you’re emailing someone, Xobni could show you — through an integration with Salesforce — how many sales calls you’ve made to the person, and how many dollars in computer sales you’ve made to them. Xobni will announce such partnerships over the coming weeks.

1. Amazon S3, VentureBeat go down
2. Montalvo Systems vs. Intel, with chip for handheld devices
3. Fox Interactive to introduce “music Hulu for MySpace”
4. Yahoo’s board moving against Yang
5. Google searchers are wealthier, buy more online
6. Xobni hires Jeff Bonforte away from Yahoo, to be its new CEO
7. Stormfisher raises $350 million for biofuel project
8. Cable veteran Philip Balboni moving to online news site
9. Nielsen buys Audience Analytics
10. Air commuter conference coming up this spring
11. Report: Online Community Best Practices
12. Wal-Mart chooses Blu-Ray

Amazon S3, VentureBeat go down — Online data storage service S3 went down. Affected startups include SmugMug, 37Signals, Twitter and many others. Lots of coverage on Techmeme. Earlier today, VentureBeat was down because of separate hosting problems.

Montalvo Systems taking on Intel, focusing on a chip for handheld devices — It has designed a chip for smartphones, notebook computers and other portable devices, that should run software that works on Intel or AMD chips. The company’s plans have been outlined in some detail by Michael Kanellos at CNET (our previous coverage ).

Montalvo’s chips, however, will fundamentally differ from the latest Core or Opteron processors from Intel and AMD in that the cores on its chip won’t be symmetrical, i.e. identical to each other. Instead, Montalvo’s chips will sport a mix of high-performance cores and lower-performance cores on the same piece of silicon, similar to the Cell chip devised by IBM, Toshiba, and Sony, according to sources close to the company.

Bay Partners, U.S Venture Partners, NEW-IndoUS Ventures, Leapfrog Ventures, CMEA and Adams Street Partners.

Fox Interactive to introduce “music Hulu for MySpace”– The project, which is still being put together, intends to sign up all the major music labels as content providers — who would get equity. The music would be distributed on widgets and contained in a portal page, similar to video-sharing site Hulu, which Fox is a part of. The music on MySpace would be DRM-free and ad-supported. PaidContent has the scoop.

Yahoo’s board moving against Yang — Founder and chief executive Jerry Yang and a small group sympathetic members are trying to avoid a sale to Microsoft at all costs. But Yahoo Chairman Roy Bostock is leading an informal group of board members and billionaire Ron Burkle who think that Yang may be ignoring his fiduciary duty to maximize shareholder returns. The New York Post has more.

Google searchers are wealthier, buy more online — Hitwise numbers here. See chart for more.

Xobni hires Jeff Bonforte away from Yahoo, to be its new chief executive — Bonforte was previously a vice president who helped lead the growth of Yahoo Messenger. Company blog post here.
Stormfisher raises $350 million for biofuel project — It turns agriculture and food-industry byproducts into methane gas, which reduces the levels of waste in landfills. The investor is private equity firm DenHam Capital, which has already sunk many millions into biofuel projects.

Cable veteran Philip Balboni moving to online news site — He’s leaving New England Cable News to join online international news company Global News Enterprises LLC, which is slated to launch in April with more than 70 international correspondents. The new company has taken on around $8 million from angels. (Photo via Columbia University.)

Nielsen buys Audience Analytics – The web measurement company says the Provo, Utah-based startup will improve its ability to handle large quantities of audience measurement data
Air commuter conference coming up this spring — Tech commentator Esther Dyson and publisher Imaginova are teaming up to organize the fourth annual Flight School from July 4-6, an event that brings entrepreneurs together to talk about innovation in aviation and space travel. The focus is still on “air taxis” — basically, smaller planes making local flights on-request — but Flight School’s scope will be broader this year, Dyson told us. Since the conference began, air taxis have become a marketplace reality through companies like DayJet, and commercial space flight is becoming more and more practical too, Dyson said. She added: “When I was a kid, I took it from granted that I would go to the moon. Now it looks like I’m going to have to work pretty hard to get there.”

Report: Online Community Best Practices — Forrester analyst Jeremiah Owyang delivers the report (buy here). It’s tagline is “Communities Are A Powerful Tool, As Long As You Put Members’ Needs First.”

Wal-Mart chooses Blu-Ray — More here. Meanwhile, Toshiba may be ready to give up on HD DVD.