Stealth Startups and Acquisition Rumors: Some Tidbits from King of the Web, Sparkbuy, PhotoRocket, Isilon, Widevine, and TechStars

Let’s get caught up on some Seattle tech gossip, shall we? It’s on my mind as I come back to town for the second time in as many weeks. Man, I miss this place and all its back-channel intrigue…

—Nick Hanauer of Second Avenue Partners told me a little more about the new social gaming startup he’s working on with his friend Rich Barton (and former aQuantive employees Scott Howe and Maggie Finch). King of the Web, as it’s called, is totally different from Zynga, the San Francisco maker of hit games on Facebook such as FarmVille and Mafia Wars, he said. Hanauer wouldn’t give many specifics, but he said the company’s games (the first of which might be released as early as January 2011) would include a real-world component. And that it will compete not with Zynga or Playfish, but with “anything you’d do on the Internet that would entertain you.” (The word “game” doesn’t do it justice, he said.)

—Sparkbuy raised $1 million in angel and venture capital last month. This is the new stealth startup from Dan Shapiro, the co-founder of Ontela (now Photobucket). Shapiro declined to comment on what his team has been building. If I had to hazard a guess, based on rumblings in the grapevine, I’d say it’s something like a price comparison engine for consumer electronics—laptops, mobile phones, and so forth. Maybe something like Kayak for laptops. Who wouldn’t use that? (Well, maybe Mac users.)

Shapiro did comment about the experience of being a second-time entrepreneur: “The luxury and terror of doing your second startup is you have only one item on your worry list: can I make this business work? It’s not necessarily much easier, but it sure does focus the mind.”

—PhotoRocket, the online photo-sharing startup led by Scott Lipsky, the former Amazon and aQuantive exec, has raised some more money ($1.3 million) and is in private alpha trials. From what I can tell, PhotoRocket makes it super easy to share photos with people in your network, just by clicking on the pictures. It’s hard to tell whether this really represents a breakthrough technology, and whether it could go mainstream. Still, would you bet against a guy (Lipsky) who sold his last two companies, one of them (aQuantive) for $6 billion-plus?

—TechStars Seattle demo day is finally here. Which companies will wow potential investors? Which ones could change the world? A few of the startups I’ll be looking at (no disrespect to the others): Giant Thinkwell (social game based on virtual celebrities); Deal Co-op (like Groupon, only different); and Cabin Fever Toys (led by former Cranium exec and Microsoft manager Adam Tratt). I’ll also be looking to evaluate the broader impact of this seed-stage mentoring program on the Seattle tech scene. That might take a while though.

—It sounds like Seattle-based Isilon Systems’ (NASDAQ: ISLN) rumored acquisition by Boston-area data storage giant EMC (NYSE: EMC) has stalled over pricing, at least for now. Sources outside the companies tell me the deal will probably still go through eventually, because Isilon’s network-attached storage technology fills a big need for EMC in its competition with NetApp, IBM, and other big firms. But Isilon’s price (rumored to be north of $2 billion) is too high. Will another bidder emerge to put pressure on EMC?

—Speaking of acquisition rumors, I’m hearing that Seattle-based Widevine Technologies might get bought by Google (NASDAQ: GOOG). This would make some sense, as Widevine’s digital rights management, streaming, and copy protection/tracking technology (for content owners and cable/Internet service operators) could fill a hole for Google TV in its competition with Apple and other companies looking to get ahead in online video distribution. But any deal is just speculation for now. Mostly.

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