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Eyealike, the startup that lets you use photo recognition to help find your ideal mate, is expanding to apply its image processing technology to a new market: advertising. The company says that the new system will allow businesses to place highly targeted advertising alongside photographs that appear on their site (which have long been difficult to monetize).

For now the image recognition is restricted to identifying physical traits of the people in photographs, with categories including age, gender, hair color, and skin color. In the demo I saw, the results were impressive: photographs with babies in them were paired with products for infants and toddlers, and makeup ads were shown near photos with women in them.

The company is also in early stages of identifying company logos in photographs (which could be paired with matching products), and eventually hopes to include support for more objects, like vehicle recognition and applications for travel.

Eyealike isn’t meant as a consumer product. Instead, it’s being licensed at an enterprise level, with a customizable backend that Eyealike will tailor for each customer’s needs. Provided the system works well, Eyealike shouldn’t have any trouble finding customers - sites like MySpace with billions of photos would love to more effectively monetize them.

The problem that Eyealike is trying to solve isn’t a new one, as numerous other startups have tried to implement their own versions of image recognition. Unfortunately, lackluster accuracy has long hampered this kind of technology. Eyealike claims that its algorithms work 90% of the time - an impressive figure that would undoubtedly lead to higher advertising revenues. But because the technology doesn’t have a consumer front-end, I was unable to try it out for myself. Eyealike says that it is in talks to implement its system in a large social network, so we may get to try it for ourselves soon enough.

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MySpace launches their self serve ad platform, called My Ads, tonight, which was first talked about a year ago. Like Facebook’s similar product, it allows anyone to quickly create a targeted ad and serve it on MySpace.

Unlike Facebook, which only allows text ads, MySpace is only allowing display ads for now (advertisers would like both, I imagine). Users can choose between a 728×90 or 300×250 ad unit and can create an ad with pre-built templates and a Flash tool, or upload their own.

MySpace ads are charged on a cost-per-click basis (Facebook allows advertisers to pay, at their option, on a cost-per-click or cost-per-impression basis). Ads are prioritized based on the maximum CPC rate stated by the advertiser as well as relative click information - meaning that, like Google, advertisers will pay less if their ads tend to be clicked on a lot. The back end optimization technology behind the product was originally developed by SDC, which was acquired by MySpace’s parent company in February 2007.

The key to MySpace’s ad platform is their hypertargeting technology. Facebook allows targeting as well, although it’s based on interest areas put in by users directly. So if someone says they like books, you can target ads to them based on that. What MySpace does is much different - they build out a profile of each user based on what they do on MySpace over time, with 1,200 different ways to categorize each user. So if you only want to target women who live in California between the ages of 25-30 who like motorcycles, i can. There are 2,842 of them on MySpace. And if I just want to target those in San Francisco, I can. There are 147 of them (the ad tool tells you all of this):

Will This Be MySpace’s Google Moment?

The big social networks are still trying to find their “Google Moment” - the point when (and if) they find a way to monetize these massive audiences they’ve attracted. Google was just a great search engine until they matched it with contextual advertising. MySpace and Facebook need to find their own revenue engine.

Facebook will probably only generate $300 million or so in revenue this year. MySpace is ahead of them, with $850 million or so in revenue last year and a projected $1 billion in fiscal 2008 (which ends next June for them). But it’s still a far cry from what Google generates per unique monthly visitor.

MySpace says MyAds will be a major revenue source for them. “We expect MyAds to be a significant revenue source for us,” MySpace CEO Chris DeWolfe said in an email today. “It has already exceeded our launch expectations in the pre-launch phase.”

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Dare Obasanjo, a Microsoft employee and the son of a former President of Nigeria, doesn’t like it when people disagree with him. I found that out in 2007 when Obasanjo vandalized the TechCrunch Wikipedia page in response to a post we wrote that was mildly critical of Microsoft’s hiring of a blogger to edit certain Wikipedia entries relating to Open Office standards. His actions as an individual and as a representative of Microsoft were outrageous.

Today he writes a post accusing us of “encouraging…garbage” on TechCrunch because we’ve reported on the market fall over the last week, pointing to three examples (out of over 100 posts last week) where we chronicle the fall of Yahoo and Google stock, and the Seesmic layoffs. A number of other blogs jumped on the bandwagon, calling for the negativity to stop (obviously none of these writers read TechCrunch this last week).

“The last thing we need is popular blogs AND the mass media spreading despair and schadenfreude at a time like this,” he says.

Our job isn’t to cheerlead the startup scene no matter what happens. Our job is to report the news as it happens and add our opinion as we feel is appropriate. So even if we were reporting nothing but doom and gloom, the criticism isn’t appropriate.

But in fact we’ve been fairly cheerful over the last week, reporting on a couple of dozen new startups and products, focusing as much as possible on the positive, and trying to defocus the mobs from blaming the venture capitalists for what’s happening in the markets.

In other words, the tone of our coverage hasn’t changed.

So what happened? You guessed it. We dared to disagree with something the Obasanjo had to say over on TechCrunchIT, which he immediately characterized as a personal attack. A few days later- zap! - he finds three posts that aren’t all roses and butterflies and makes a subtle accusation that suggests TechCrunch may be partly to blame for the hysteria in the market right now.

In fact, his post, which ostensibly calls for everyone to be positive no matter what, is really just a clever way of inciting the mobs to blame (in this case) TechCrunch for the market problems.

This isn’t ok from anyone, and it really isn’t ok from a high profile Microsoft blogger. This is the second time Microsoft, through Obasanjo, has attacked us when we disagreed with them. No other large companies as far as I know use their employees as attack dogs to silent dissent. It’s time for Microsoft to stop this nonsense.

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On Friday, word got out that come November 1 Verizon Wireless plans to tack on an extra 3-cent charge for every SMS message sent by Web information services to any of its mobile subscribers. That hike will be on top of the 20 cents per message that Verizon subscribers already pay (even those with “unlimited” plans). Thus, in one fell swoop, Verizon is attempting to boost its SMS revenues by about 15 percent.

While it may be good for Verizon, the additional charge is not good for any service that sends out millions of SMS messages each month. The move caught a lot of Internet companies, SMS aggregators, and media companies by surprise. For instance, I asked Twitter co-founder Biz Stone what impact it would have on the micro-blogging service, which lets users keep up with every Tweet they follow via SMS, and he didn’t know:

We’re still investigating with Verizon so I don’t have a definite answer for you right now.

In August, Twitter suspended the SMS feature in the UK and other foreign countries because it would have cost the company as much as $1,000/year/user. In the U.S., apparently it has more of a flat-rate pricing.

But that might change now with Verizon—and other U.S. mobile carriers as well, if Verizon’s competitors match the price hike. How long are they going to stand by and watch Verizon capture a 15 percent margin advantage in the booming SMS business? If the new 3-cent charge becomes the norm, it would cost companies $30,000 for every million SMS messages they send out.

I use Twitter here as an example, but it is by no means alone. Thousands of Web services use SMS as a communication channel. For example, Google lets you search by SMS and also lets people set up automatic SMS alerts from Google calender and other services. Nearly every sports, stock, and weather Website (not to mention the political campaigns) lets you get SMS alerts as well. Those are the heavy volume users. But this new charge could end up hurting SMS startups such as 3Jam, 4Info, or TextMarks the most.

Now, of course, the price hike could backfire on Verizon. Google, ESPN, Twitter, and others could just suspend their SMS features for Verizon customers, and its competitors could use that disparity to their marketing advantage. But if AT&T, Sprint, and T-Mobile decide that they too can squeeze out an extra three cents per SMS message, they might simply pile on board.

Forget for a moment that the mobile carriers are already making a huge profit margin on the 20 cents they charge users for each message. They know they cannot charge consumers any more, but Verizon at least thinks it can turn around and charge the Web services where the SMS information is originating. If the charge spreads to other carriers, those services might die or stop using SMS as a communications channel.

(For Twitter, at least, this may not be so dire. Although Stone would not confirm, my understanding form another source is that SMS accounts for less than 10 percent of Twitter’s overall message volume. That makes sense to me. I only use Twitter’s SMS functionality to send in Tweets from my phone, not to receive the barrage of Tweets that I follow).

The other way this could backfire for Verizon is that it could raise some serious Net neutrality issues. If it does not apply this charge evenly across the board, or starts carving out exceptions to do biz dev deals (and Verizon made some indications to Silicon Valley startups it was moving in this direction prior to the rate hike announcement), then it will be giving preferential treatment to one source of information over the other.

What if Verizon were charging the Obama campaign 3 cents per SMS message right now, but cut a deal with the McCain campaign to charge one cent per SMS? That is just a stark example, but you see where this can go. What if it charges the New York Times one rate, and the Wall Street Journal another? It becomes a freedom of speech issue. That is why it is better for the mobile carriers to charge consumers directly (and consistently), rather than try to sneak around and get an extra three cents per message from the Web content companies.

(Photo by Ti.mo).

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Brightcove, the Web video distribution platform used by media companies including Dow Jones, Warner Music, and the New York Times, is getting a massive makeover. Most people won’t see it, but its customers will. A new version of the Web-based software that they use to upload, manage, and distribute their videos is rolling out soon. It will be called Brightcove 3.

We received the leaked screenshots below, and paired them with the corresponding current sections of the Web software. As far as we know, they’ve never been seen before. Judging by the screenshots, Brightcove 3 is much more visual, intuitive, and offers Web video publishers a ton more options than before. Click on each screenshot for a larger image.

Here is the new start page (top) versus the current dashboard (bottom):

Brightcove lets customers customize their video players. Here is the new video player styling editor (top) versus the current one (bottom):

Here is the new title editor (top) versus the current one (bottom). Notice how the ability to add tags and pick video stills and thumbnails is put right up front:

The advertising options are also being expanded. Brightcove 3 (top) looks like it will have options for different ad policies and ad types (pre-roll, mid-roll, post-roll) per player. Currently (bottom), users can pick “advertising” or “no advertising”:

And, I think this might be new, Brightcove 3 will create “multiple renditions” of each video in different standards (VP6 and H.264) and different bit rates (360, 512, 900, and 1,500 kbps), depending, presumably, on the viewer’s bandwidth and software:

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Bessemer Venture Partners is launching an incubated startup called MashLogic into private beta today, with the audacious promise of helping people “take back the web.”

They say (and they’re not alone) that the web today is driven by page view economics and search engine optimization goals, which leads publishers to link to themselves too often. The result is a less than optimal web experience.

There are Greasemonkey scripts that strip out these inefficient links, and various services like Adaptive Blue are adding browsing and link options for users via a plugin. Another startup, Sphere, acquired by AOL earlier this year, is a pop up window triggered by users that shows other content they might be interested in based on an index of the current page. It worked, well enough to get them acquired at least.

MashLogic is a more direct approach. Users must download a Firefox plugin to use it, but there’s no toolbar. Instead, you simply change the settings to tell it what kind of information you’d like to have included on web pages. Links to Wikipedia is an easy one. But it also has company links to LinkedIn to show you people there you might know. And a currency converter. Etc. It’s like a frickin Swiss Army Knife for hyperlinks.

One setting I like - the ability to remove all links on a page, and then only MashLogic links appear. For a lot of sites, the user experience is vastly superior. You can also create blacklists of domains that won’t show up in links on the page, even if the original publisher put them there.

Once you’ve got the tool configured, smart links will start popping up all over the place. Professional Athletes get their playing stats, Politicians get a real time poll of their progress towards the White House. Currencies are *zap* converted. You can even see a map for any street address.

Their goal is to save you from having to go back to the search engine to find the next thing you’re intersted in but isn’t linked on the site.

So far in my testing, they’ve nailed it. Instead of linking Bessemer Venture Partners in the first paragraph to Crunchbase or their website, I left it blank. The result was a great MashLogic Link bringing in Crunchbase information and other information relevant to Bessemer. If a user doesn’t like that info, they can just make a few changes and go right to Wikipedia, or a search engine, or wherever.

And if you mouse over a link to a sound or movie file, it will play the file right in the popup.

We have 500 beta installs available now, here. Once they’re gone, you’ve got to find someone who’ll be willing to hand one over. Lucky for all of us we have InviteShare to bring givers and takers together. MashLogic should be up and running there by morning.

The Business Model:

The easy money will be by adding links to ecommerce items, leading to affiliate fees from splits. But the service will also be a central hub of data and linking activities, which can be monetized in different ways as well.

MashLogic is also encouraging distribution to users from publishers. Yeah, you heard that right. The idea is that if everyone is going to be using this, you’ll do better by getting it to users first, pre-stocked with your sites as resources. Those users can change all of those settings, but many won’t. And your passionate readers will find themselves flying back to your content, no matter where on the web they’ve wandered off to. Once enough users find that they love this product, licensing it directly to the browsers may makes sense. And then the revenue opportunities sort of hop into the pot themselves.

I’m putting this on my must-have list of Firefox addons.

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