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But this doesn’t tell all of the story on open-source M&A. If it were a matter of “buy open source, make it proprietary,” more would have done it by now. Some, like Red Hat, actually go in the opposite direction, as it did with Sistina, taking proprietary code and open-sourcing it. But the JBoss example is even more interesting, because it involves taking a pre-existing open-source project and trying to improve its financial yield by changing its business model.

Some acquirers will seek a return on their huge investments by turning the open source into an enhanced “enterprise” product line that, in a matter of months, creates lock-in no different from proprietary code. Some will sustain and encourage a community, balancing the community’s interests with the need to drive profits. Some software companies have grown by being good at acquiring and integrating startups. They have a new skill to learn in doing that with open source.

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So there you have it. Open source code has gained in value over the last two years, and that value is recognized in the high acquisition prices. The open source code, of course, remains freely available, but the code’s value withers if there’s no community of independent, critical users and developers driving it forward, with leadership to guide it.

All of which leads to Babcock’s conclusion:

Two years later, JBoss is thriving under Red Hat’s hand, with some geographies showing JBoss sales set to surpass Red Hat Enterprise Linux (RHEL) business, I’ve heard from sources both inside and outside the company. Red Hat cracked the code on open-source M&A. It took awhile, but it is paying dividends now.

XenSource was bought for the princely sum of $500 million despite offering virtually nothing in the way of revenue and a clear business model. Under Citrix’s proprietary hand, however, XenSource has gone from pocket change to what XenSource CTO Simon Crosby says will be $50 million in revenue this year. Crosby tells InformationWeek that “XenSource has close to 3,000 customers, compared with 1,800 at the time of the acquisition.” Considering that it made less than $10 million or so in sales off those 1,800 “customers,” XenSource may well be thanking the proprietary gods right now that Citrix gave it a new way to monetize adoption.

Squeeze too hard, and you risk alienating the community of customers, developers, and interested onlookers that made the open-source project successful. Squeeze too lightly, and you end up being popular and poor.

By all accounts, including Red Hat’s, Red Hat initially botched its JBoss acquisition. An exodus of JBoss employees resulted, prompting Red Hat to reconsider its approach to the company and its product. While Red Hat proceeded with applying its RHEL model to JBoss, it also (eventually) embraced JBoss’ model for working with system integrators, among other things.

InformationWeek’s Charles Babcock takes a fascinating look into the pros and cons of open-source mergers and acquisitions, and comes up with some interesting perspectives in the process. In sum, if you want to acquire an open-source software company, you’d better be very clear about what you’re buying, and how you’re going to pull value from it.

What do I mean by “private equity buyout?” Consider XenSource.

There is no one-size-fits-all approach to acquiring open-source projects, as the article points out. Indeed, sometimes a private equity buyout of sorts ends up yielding the most value.

The key is to understand what you’re buying (Code? Cash? Community?), and act accordingly. Don’t be misled by myths. Ultimately, an open-source acquisition is just like any other: if it’s not driving dollars, it’s not worth doing. Those dollars may be short or long-term, but if you’re acquiring an open-source project to be Top of the Pops on SourceForge, you probably deserve the failure you’re going to acquire.

One question arising from this: Why doesn’t Sun do this? Sun knows semiconductors as well as anyone, and it now knows MySQL better than anyone. Kickfire has a leap on the competition, but could Sun prove to be a spoiler?

For now, Kickfire is the best game in town when it comes to easy-to-deploy supercharged MySQL performance. Very cool.

Based on a patented SQL chip that packs the power of tens of CPUs into an exceptionally small, low-power form factor Kickfire delivers a quantum leap in performance efficiency–avoiding the hardware build out, power, and space costs of today’s data warehouse and database offerings. By delivering astoundingly fast query performance out of the box, Kickfire enables organizations to use MySQL for demanding business intelligence, reporting, and analysis rather than migrating to costly, non-open source alternatives.

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Kickfire is one of the coolest open-source (based) companies to launch within the last few years. Today, it announced that it has raised $20 million in series B funding to tell the world about what it’s doing.

What does Kickfire do? From a business angle, it has figured out a clever way to monetize MySQL’s excellent software. From a technical angle:

The core of the service is still retained in the Lite version. You can track what’s popular, get recommendations, and listen to your saved library of tracks. The big change is the interface. Built in Adobe Flex, it’s snappy, beautiful, and incredibly intuitive. It definitely takes a hint from the
iPod with simple hierarchical menus that snap back and forth, making it easy for new users to pick it up and get started.

Steve Spalding, who does consulting work for Grooveshark, tells me the company has every intention of keeping the downloadable Sharkbyte client around. They just wanted to fulfill one of the top user requests of being able to access the music library while at a work machine, or other places where an install is not possible.

(Credit:
CNET Networks)

Yesterday Grooveshark launched the newest iteration of its music service, Grooveshark Lite. It’s a big step forward for the company, ditching the need to download anything and creating a cleaner, tighter version of its player that runs right in your browser.

My favorite feature of Lite is the new playlist builder, which lets you simply click a button to drop a song into a stack that sits at the bottom of the player. You can rearrange the tracks endlessly, or simply remove them by dragging them off the playlist where they vanish into oblivion. While there’s no awesome explosion like deleting photos from Flickr’s Organizr, it’s very satisfying and a marked improvement from the previous iteration.

Grooveshark Lite lets you search and browse music from all over and play it right in your browser without the need to download or install software. (Click to enlarge)

With the move to the Web, Grooveshark joins a packed market of other music players. With services like Last.fm, iLike, Seeqpod, Pandora, Simplify Media, and MediaMaster among some of the more notable music discovery and sharing services, Grooveshark is the only one with a revenue model that pays users back. For more on that read our hands-on from September.

The third version of Yahoo’s all-in-one content application for smartphones debuted in January in beta form, and with it came tricks for greater customization. Users can add a variety of widgets to the carousel and quick links to the start page, and otherwise personalize the source of mobile content. The full list of supported Windows Mobile phones can be found here.

Windows Mobile users now have a green light to try Yahoo Go (video review) on their Windows Mobile phones.

Members who opt in to the “digital scrapbook” program will be able to store high-resolution photos, as well as videos up to 20 minutes long. They will also be able to surf the site without ads.

Multiply hit the 9 million member mark recently and will likely hit 10 million in July, still paltry compared to the likes of Facebook and MySpace. But executives say touting huge growth numbers would be contrary to the site’s aim of connections between family and close friends, not random strangers or even acquaintances. Its members, according to Multiply numbers, post 2 million photos, 19,000 videos, and 55,000 blog entries every day.

Multiply has also launched a tool that automatically uploads photos and videos to a private “locker,” from users can choose content to share with friends. All Multiply profiles are friends-only, as the site promotes an aim of friends-and-family communication and media sharing.

“It’s much more organized and meaningful than some explosive megasite,” Gersh said. “People are sticking around.”

Multiply, a social network that has done a fine job of flying under the radar since its 2005 launch, has announced a new paid-account program that focuses on media storage. Called a “digital scrapbook,” this premium feature will cost $19.95 annually.

The site also has a more “adult” focus than many social networks; the average age of active users ranges from the upper 20s to mid-30s. “We’ve never tried to be the hip, cool nightclub,” Vice President Michael Gersh said to CNET News.com.

02138 has occasionally faced off with Facebook: last year, the magazine published a scathing piece about Zuckerberg that exposed extensive personal details about the young founder’s life, leading to a brief legal spat.

In other news, readers of gossip blog Valleywag seem to agree that Mark Zuckerberg should be played onscreen by Arrested Development star Michael Cera.

If an anonymous source is correct, the confirmed screenplay-in-the-works about Facebook’s origins by West Wing creator Aaron Sorkin is tied to a forthcoming book about the social network by Bringing Down The House author Ben Mezrich.

Here’s the backstory: A partial book proposal from Mezrich, who has come under scrutiny for allegedly exaggerating details in his nonfiction works, leaked to a gossip blog this spring.

Sources close to Zuckerberg’s Harvard days have indicated to CNET News that the scant detail available in the book proposal is of questionable veracity; one went so far as to say the content contained “some real bull****.” At the time, it wasn’t even clear that the book proposal was legitimate, since neither Mezrich nor his publisher, Doubleday, are willing to confirm it, but sources who spoke to 02138 seem to indicate that it’s a done deal.

Independent Harvard alumni publication 02138 reported on Friday that the film rights to Mezrich’s book had been acquired by Sony Pictures Entertainment and producer Scott Rubin, who have been confirmed as the backers of Sorkin’s screenplay.

With a working title of Face Off, the plot concerns Facebook founder Mark Zuckerberg’s soured relationship with early Facebook executive Eduardo Saverin, who appears to have been in close contact with Mezrich for the book, while they were both undergraduates at Harvard. The proposal described Zuckerberg and Saverin getting caught up in Silicon Valley excess, partying like celebrities all over the world, until a showdown between them turned ugly.

In deciding its policies, the company created rules based on the Society of Professional Journalists’ Code of Ethics, discussions with journalism professors and others. Journalism experts also serve as referees, Herman said in an interview.

What about news that is biased because it omits information or context? The system has a way for readers to provide additional information that can help them assert their case.

A SpinSpotter toolbar, called Spinoculars, displays any edits that have been suggested on a news article or blog item on the Web. Readers can annotate headlines and text, comment on and rate other reader’s spin ratings of the item and e-mail their work to others.

(Credit:
Daniel Terdiman/CNET News)

But in a world where blogging has blurred the line between traditional journalism, opinion and gossip, won’t most text on the Web be subject to scrutiny? Items that set themselves apart as news, which is understood to be objective and accurate, is fair game, but blogs that are disclosed as opinion aren’t, he said.

SpinSpotter has developed a service that lets readers of news sites like CNN.com weigh in on whether the news presented is balanced or heavy with spin. Here, the words highlighted in red have been tagged by SpinSpotter users as being less than objective.

Seattle-based SpinSpotter launched an online service at DemoFall on Tuesday that lets readers judge whether articles on the Internet are objective and accurate or not.

(Credit:
Daniel Terdiman/CNET News)

“People no longer trust the media,” Todd Herman, founder and chief product officer of SpinSpotter, said during a presentation. About 66 percent of people consider the press “one-sided” while only 9 percent of journalists are concerned with the media’s credibility, according to a Pew Research Center study.

SpinSpotter also allows users to weigh in on the objectivity of other users. Here, you can see that the crossed-out words have been identified as unbalanced.

SAN DIEGO–Think the media is biased? Well, now you can do something about it.

The service works only with text online, so broadcast news isn’t covered, which is a shame. People would truly have a hay day with Fox News. But maybe that comment is too biased…

An algorithm is also used to identify instances of bias and inaccuracy and incorporates feedback from readers. Readers are directed to look for things like writers stating opinion as fact, lack of balance, unattributed adjectives, expert sources with a conflict of interest, and paragraphs lifted from press releases, which makes it “not quite news,” according to Herman.

Just like on Wikipedia, there will no doubt be debate among readers who have divergent political and philosophical leanings. But readers who abuse the system or demonstrate extreme personal bias will see their activities have less impact than others who play by the rules as their trust rating gets lowered, said Herman, who used to be a radio talk show host.

It’s an evolution on the Folding@Home application, the protein-folding scientific project that’s gotten a hefty processing boost from worldwide PlayStation 3 owners who run the small application when not using their systems to play games or watch movies.

What makes the service neat is that it figures out where you are and automatically jumps to that point when you start it up. The news feeds are pulled in from Google News, while the weather reports are served up in real time via the Weather Channel. As you move around the globe, both the news and weather changes by city, and both are continuously updated throughout the day.

Noam Rimon, Sony Entertainment of America’s senior development manager of R&D, provides a walk through the updated service in the video below.

Sony’s
PlayStation 3 got a small update early Thursday morning that added a new channel called Life with PlayStation. It merges news feeds, weather forecasts, and live Web cams on a giant world map.

A similar offering was provided by Nintendo for its
Wii system back in January of 2007 with both its News and Forecast channels, however in the U.S. the stories were limited to those from the Associated Press, unlike Sony’s offering which pulls them in from all over the Web.