Venture capital funding picked up in the first quarter to $4.7 billion, from the year ago period, according to both Dow Jones VentureSource and the MoneyTree Report (PriceWaterhouseCoopers and the National Venture Capital Association). Dow Jones says venture funding rose 12% from $4.2 billion in Q1 2009 (the number of deals jumped to 597 from 522), while MoneyTree noted a 38% increase to $3.4 billion (the number of deals rose to 681 from 635). Although deals were up versus the first quarter of 2009, they were down from the fourth quarter– Dow Jones logged $6.9 billion for Q4 2009 and MoneyTree recorded $5.2 billion.

In terms of number of deals, the software industry boasted the most with 144 rounds of funding, according to MoneyTree. However, that represents a relatively low number for the industry— in fact, it’s the lowest number of deals since the fourth quarter of 1995. Meanwhile, VentureSource also noted stagnation in the general Information Technology sector: “IT is losing ground in the venture landscape overall. IT accounted for 32% of the deal flow in the most recent quarter, continuing the downward trend that started in 2005.”

Looking at our Crunchbase data, we have a more bullish take on venture capital funding. According to our data, the total value of venture funding more than doubled to $12.8 billion, from $6 billion for the year ago period. However, as concluded in the other reports, that is a drop from the prior quarter ($15.3 billion for Q4 2009). In total, we recorded 1,201 deals.

(Image Source: flickr/Tao_Zhyn)

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A month ago, Jason Calacanis went on a rant about why everyone should boycott comScore. He felt they were using sketchy tactics to bully people into their pay-to-play model for measuring web analytics. He also noted that their free competitors like Quantcast, Google, and Compete would soon eat their lunch. Both Quantcast and Google (Analytics) offer direct counting of pageviews (but even these methods can be abused). But you may wonder how exactly Compete gets its numbers? It appears, that some sketchy tactics are (or at least were) employed, as well.

We were recently pointed to this post from last month by Ben Edelman, a Harvard privacy advocate. In it, he details the data the Upromise toolbar collects and sends out. This toolbar is used by college students looking for savings on various items across the web, and can be quite useful. But until a few weeks ago, it appears they were also sending web browsing (and more personal) data to Compete without anyone’s knowledge. Writes Edelman:

As shown in the “host:” header of each of the preceding communications, transmissions flow to the consumerinput.com domain. Whois reports that this domain is registered to Boston, MA traffic-monitoring service Compete, Inc. Compete’s site promises clients access to “detailed behavioral data,” and Compete says more than 2 million U.S. Internet users “have given [Compete] permission to analyze the web pages they visit.”

He continues:

Upromise’s installation sequence does not obtain users’ permission for this detailed and intrusive tracking. Quite the contrary: Numerous Upromise screens discuss privacy, and they all fail to mention the detailed information Upromise actually transmits.

The Upromise toolbar installation page touts the toolbar’s purported benefits at length, but mentions no privacy implications whatsoever.

If a user clicks the prominent button to begin the toolbar installation, the next screen presents a 1,354-word license agreement that fills 22 on-screen pages and offers no mechanism to enlarge, maximize, print, save, or search the lengthy text. But even if a user did read the license, the user would receive no notice of detailed tracking. Meanwhile, the lower on-screen box describes a “Personalized Offers” feature, which is labeled as causing “information about [a user's] online activity [to be] collected and used to provide college savings opportunities” But that screen nowhere admits collecting users’ email addresses or credit card numbers. Nor would a user rightly expect that “information about … online activity” means a full log of every search and every page-view across the entire web.

Shortly after Edelman’s post (and a follow-up PCMag.com post), Upromise changed their privacy policy to alert their users that this data is being sent out. But the company declined to state how long the issue had been going on.

Privacy implications aside, it’s interesting that this is one of the ways Compete was gathering data. And it would be good to know where else they get it from. On their site, they only vaguely note that they have “developed a unique methodology created by experts in the fields of mathematics, statistics and the data sciences to aggregate, transform, enhance and normalize data in order to estimate U.S. Internet traffic.” They also claim to have over two million members — but apparently, at least some of them (such as the Upromise toolbar users), don’t know they’re members.

I’ve sent a message to Compete asking them what other means (other toolbars, etc) they use to gather their data. In light of this Upromise fiasco, it seems wise that they should disclose that kind of information. I’ll update if and when I hear back.

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Even though the iPad is still more than a month away from shipping, iSuppli conducted a preliminary itemized parts breakdown. The results aren’t that surprising: Apple’s making a boatload on these things. Suppli concluded that the $499 16GB/no 3G model only costs $229 to manufacturer with the $829 64GB/3G model costing only $117 more to make even though it carries a $329 premium. Nice, eh?

These numbers can be broken down even further showing Apple’s insane margins. The 3G module only costs $24.50, but Apple charges $129 more for the option. The NAND memory chips are really the only difference between all three options, but their real costs of $29 for 16GB, $59 for $32GB, and $119 for 64GB are nowhere near proportionate with the iPad’s prices. All this data shows that Apple’s abandoning its long-held K.I.S.S. strategy.

So what if Apple got back on the keeping it simple bandwagon, only offered the high-end 64GB with 3G iPad and still sold it for $499? After all, the company would still be making at least $153 on each iPad sold. Would that turn around the iPad’s outlook?

Read the rest of this story at CrunchGear…

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Early this morning, Twitter began alerting certain users to reset their passwords because of a possible phishing attack. They later elaborated on it a bit but it still wasn’t clear exactly what was going on. Now they’ve felt the need to fully go into exactly what went down — and it’s fairly interesting.

On their Twitter Status blog (interesting that it’s not the main Twitter blog), Del Harvey, Twitter’s Director of “Trust and Safety” has a post detailing the attack. Apparently, Twitter figured out that some torrent sites have been being created for a number of years by some individual who then sells them to others looking to get into the business. The problem is that this person seems to have included a backdoor into these sites so that they could access them later when the site became popular. And because people often use the same login and password across the web, a bunch of Twitter accounts were then comprimised with this data.

To make matters worse, it seems that there were also other exploits on these sites that allowed other hackers to gain access to data. Harvey doesn’t name any of the torrent sites involved (and says they likely won’t even be able to figure out all of them), but notes that if you’re a torrent site user, you should probably change your Twitter password immediately.

Harvey titles his post, “reason 4,132 for changing your password” — but really it should be, “reason 4,132 for not using the same login/password on all sites.” Here’s the main nugget:

The takeaway from this is that people are continuing to use the same email address and password (or a variant) on multiple sites.  Through our discussions with affected users, we’ve discovered a high correlation between folks who have used third party forums and download sites and folks who were on our list of possibly affected accounts.

[photo: flickr/Daquella manera]

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