While the ground beneath the tech sector's feet rumbles with layoffs and falling share prices, there's one online industry that may be weathering the recession: online video.

Two funding deals were announced today: $6 million went to Brightstorm, an online educational video content company, from Korean venture firm KTB Ventures; Blip.tv, in a second round of funding, got an undisclosed amount from Bain Capital, financial backers of LinkedIn and LaLa Media.

Yesterday, the Chinese online video site PPS.tv announced getting $20 million in third round funding in a deal finalized prior to the Beijing Olympics.

While the deals are small, they nevertheless signal a continued flow of cash into the sector.

Indeed, it's where the Web seems to be heading. In a recent survey of media outlets, including USA Today, Entertainment Weekly, and New York's WINS-AM Radio, 77 percent of these media companies expect an increase in the use of online video.

Playboy is among those increasing online video already. Last Thursday the company announced it will close its DVD division, cutting 80 jobs and spending $2 million in restructuring costs to instead make its video offerings available only online.

Funding for online video sites has been on the rise. It nearly doubled between 2006 and 2007, from $266.9 million to $460.5 million. In just the first quarter of 2008 alone, over $217.3 million was raised.

Also rising has been the amount of ad dollars going toward online video: eMarketer reports a 55.9 percent increase this year over 2007.

In a report in March, the now-defunct Bear Stearns predicted that the sector would continue to expand.

"We believe that video will be at the very heart of the next five years of Web evolution."

Let's hope Bear Stearns' analysts knew more about the future of other industries than they did their own.

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Now is a great time to start a company. Why? Because great people are available to join you, VCs are loaded with cash, and office space is available cheap. Everything is cheap and readily available in a recession.

Paul Graham says "If we've learned one thing from funding so many startups, it's that they succeed or fail based on the qualities of the founders." "Which means that what matters is who you are, not when you do it."

In good times all the really great people are busy doing fun projects...and not available to join you in a startup. In bad times projects are cut, people are laid off, and big companies retrench to improving the existing stuff. New projects don't get any budget. So, great people get bored and start looking for the Next Big Thing...a cool startup.



Raising money is a little harder, but not much. Good teams with good ideas can always get VC/Angel funding. In fact, VCs are sitting on tons of cash right now...and they want to invest it in hot new startups. Many VCs are reluctant to dump more money into an existing startup that is struggling, but will invest in a new startup idea. The promise is always more appealing than the reality.

Everything else is cheap and readily available too. Office space is always cheaper and more available in a recession. Existing companies will sub-lease space really cheap to offset some costs. Computers, software, networks, desks, equipment...everything is cheaper.



Expectations are lower during bad times so it is a good time to be in development mode, building a product, getting an audience, and starting a tiny revenue stream.

Customers are willing to try new things to save money in bad times. When things are going great they don't want to take risks on a tiny startup. If you can save them money in bad times...they are happy to deal with a startup.



Go for it! Now is a great time to build your great idea into a company.

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Commonwealth Capital held their annual open house this week at their Winter Street offices on "VC Hill" in Waltham. VC Hill is to Boston/Waltham what Sand Hill Rd is to Silicon Valley...the center of Venture Capital for the region.

Commonwealth Capital recently closed on a large new venture capital fund. Longworth Ventures, another Boston/Waltham based VC firm, also recently closed a new fund. In fact, over the past year or so, several Boston firms have raised over $2 Billion in venture capital. While the financial markets on Wall Street are in a panic, the venture capital community in Boston is strong, with billions of dollars to invest in innovative startups.

Boston based VC firms that have raised funds over the last year or so include; Flybridge Venture Capital, Spark Capital, Fairhaven Capital, Commonwealth Capital, Longworth Venture Partners, Battery Ventures, 406 Ventures, Ascent Venture Partners, and Staley Capital. The total funds raised exceeds $2 Billion. If you look over the past three years the funds raised in Boston exceeds $10B, with giant firms like Polaris Ventures, Highland Capital, and General Catalyst raising huge funds.

Microsoft is making a big commitment to innovation in Boston area as well. Microsoft has established a campus at One Memorial Drive in Cambridge, strategically located right next to MIT, just across the river from Boston.

The company has established a new research lab there under the direction of Jennifer Chayes and Christian Borgs that will work with MIT, Harvard, and other area universities to further strengthen the research community in Boston.

There is also a group called Microsoft Startup Labs, a kind of internal idea incubator for quickly building and testing new products and services. The lab, under the direction of Reed Sturtevant, is recruiting a top notch team of developers and former entrepreneurs.

There are several other Microsoft groups at the Cambridge campus including a UC design team and the App Virtualization team. All of them are hiring.

See Microsoft Careers for a complete listing of job openings in the Boston/Cambridge area.

It’s Microsoft’s intent to work closely with Boston area universities, research labs, and the venture capital community to ensure the Greater Boston area remains a vibrant center for entrepreneurship and innovation.

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THE dollar closed lower yesterday as fears of a global recession and a strengthening US dollar offset a higher than expected inflation number.

At the close of trading the dollar was buying US66.90c -- down US2.26c for the day and only marginally above the five-year low of US65c struck earlier this month.

During the course of the day, it moved between US66.35c and US69.30c.

The inflation rate of 4.7 per cent -- on the Reserve Bank's preferred measure -- failed to help the currency despite some expectations it could stop the central bank cutting rates as steeply next month.

NabCapital head of currency research John Kyriakopoulos attributed the dollar's poor performance to the negative news shrouding global economic markets.

Bank of England governor Mervyn King this week suggested a British recession was imminent.

"We have seen those fears of a global recession overwhelming what has been some improvement in credit markets," Mr Kyriakopoulos said. "The news flows continue to be pretty poor in regards to the global economy and that's the dominant theme."

With investor risk appetite already strained, an overnight drop in commodity prices on Tuesday, combined with a decline in equity markets yesterday, proved to be too much for the Aussie to bear.

"We are seeing that showing up in support for safe-haven currencies like the Japanese yen," Mr Kyriakopoulos said.

This was evident yesterday as traders moved to sell off the high-yielding dollar, which is leveraged to the global economy, while a flight to "safer" US Treasury bonds assisted the US dollar.

Commonwealth Bank chief currency strategist Richard Grace believes that as long as the greenback remains strong, the dollar will continue to grind lower.

He sees the strength of the greenback being driven by "the hoarding of US dollar cash to support liquidity requirements" and predicts this will continue into early next year.

"Until you see a narrowing in the US dollar Libor spreads, and until you see the central banks willing to reduce the amount of US dollar swap facilities they've got in place -- because at the moment they have unlimited US dollar swap facilities -- I think the demand for US dollars will continue to remain firm," Mr Grace said.

"We anticipate this will occur in (the second quarter of) 2009, about the same time as the global economy recovers, allowing a softening in the US dollar and rise in the Australian dollar into the second half of 2009."

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Recently, RBI slashed Repo rate by 100 basis points, in a bid to calm down the things on the economical stage of the country. With the current global scenario looking extremely grim, one can now certainly hope that coming days might see a certain fall in the interest rates of car, auto, home, personal and industrial loan products. This is one move that is being cited as a desperate measures to pump more liquidity into the blocked arteries of the nation's economy.


After Repo rate cut, this certainly was one thing that people were relying upon in this time of economical adversity, in order to seek the much-desired relief. With India surviving the global liquidity doomsday with ease, dealing with the after-affects has certainly proven to be a hard nut to crack for all the policy framers and financial wizards of the country. Thus, in a bid to address the problem of liquidity crunch, the economists are trying almost every possible permutation and combination to get a perfect solution for this problem. Although from time to time, FM and other politically active personalities have assured the people of an immediate relief but of no use. Although, a slight change was observed after the divine intervention of honourable FM, but soon things went back to the old chaotic way.


If India has to evolve as economy, we will soon have to devise a way out of this. Injecting a fresh dose of capital might be the right step at this time, but make sure that it can have its after-effects too, in the form of Inflation and other necessary evils. Hence, the policy framers will somehow have to chalk out a plan where they can find an effective control of these problems.

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If we have a close look at the recent world economies and the after-effects of financial crunches felt by almost all of the world economies then it will not be wrong to conclude that the world markets have indeed taken a major setback and will take some time to recover.

To overcome the financial crunch situations, almost all the major world economies such as the United States, the United Kingdom, China and India have been trying hard to sustain their "unannounced war" against recession. These economies have been trying hard to put the much-needed liquidity by taking immediate financial reforms.

The fallout of eminent banks and financial institutions such as the Lehman Brothers, HBOS and Helifax have given huge tensions to all the world economies. This has even resulted in cost-cutting measures that have been adopted in some segments, which are hit the hardest.

However, one world economy that has proved its mettle and self-reliability is India. The country has been able to sustain its overall growth prospects despite the breakdown of all the major world economies.

However, the recent bailout plans by the United States and UK to bring much-needed respite to the world economies and its citizens have come as helping hands in these devastating times. Even though the bailout came a little late as was expected, still the sighs of relief have been like getting "sweet and cold coconut water" in a hot desert.

It can be surely said that the economies that have been almost whitewashed have been able to sustain themselves, with some hiccups. But, survival is more important than a sudden "demise" and the survival has been of an unprecedented class.

One thing that comes out as a positive point is that now the economies will be in a better position to encounter any similar issues in the future.

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If you thought past few days were tight in terms of liquidity, then think again as after following the conditions for quite sometime, experts believe that this phase will continue, at least for the time being.


Despite the government assurances, good days are hard to come by as the Indian stock market witnessed its all time low in the last week. Incidentally, though stock market showed symptoms of recovery in the past week, after the timely intervention of FM, but it was not enough to pull them off.


Quite interestingly, recently, taking cue from the US and UK economies, Indian government too drafted a remarkable plot to introduce a fresh dose of capital into the banking sector. Although the government proposed bail-out plan fetched an overwhelming response from the industrial sector, however, it was just a matter of time, when the resurfacing stock market and economy crashed again, much to the dismay of the both international and domestic investors. This clearly manifests the inability of government to contain the crisis, that too after they launched a series of massive plans of action to get the things going for the economy.


With Sensex closing below the mark of 10,000 on Friday, it is quite evident that things are going to get more murkier for the Indian economy. Although the intellectuals at the RBI and reputed financial wizards of the country are chalking the way to carve a middle path in the present miserable conditions, a slight mismanagement of events can ruin the chance of reaping the desired affect. Measures like CRR cut, interest rate cut can only be used to calm down things in the short run. If something concrete is craved by the government, then they have to come up with something stunning really fast. Hence, you better watch out as in this low time be prepared to play a waiting game, as it is the need of the hour.

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