Forbes magazine put out its much-watched Midas List today, which is kind of the Oscars for venture capitalists in tech. (Caveat: Think more khakis and dudes than glitz and glamour.)

On the Top 10 list of 100 of the best-performing and most influential tech investors, Jim Breyer of Accel Partners and Marc Andreessen of Andreessen Horowitz led the list at No. 1 and No. 2, as they did last year. And several others in last year’s list remained on it: Peter Fenton of Benchmark Capital, Greylock Partners’ Reid Hoffman, and also David Sze, Peter Thiel and Bessemer Venture Partners’ Jeremy Levine.

Accel scored well on the rest of the list with nine partners named; Sequoia Capital had six VCs on the list; Benchmark, Greylock and New Enterprise Associates got five slots; Bain Capital Ventures, Bessemer, Kleiner Perkins and Meritech Capital Partners had four; and Andreessen Horowitz, Institutional Venture Partners and Venrock each had three.

As usual, there were few women on the list — only three — reflecting the lack of gender equality in the top tier of the VC business, which solidly remains a boy’s club, despite a lot of noise about changing it (see the pictures here and become depressed once again). Those women who did manage to get on the Midas List were Jenny Lee at GGV Capital, who jumped from No. 94 to No. 36; Kleiner Perkins’s Mary Meeker, who dropped from No. 42 to No. 47; and Theresia Gouw of Accel at No. 82, up from No. 92.

One notable part of the massive Forbes package of VCs on parade was the intense and multipart focus on the travails of Kleiner Perkins and its longtime leader and legendary VC John Doerr. Doerr clocks in at No. 26 on the list, dropping from No. 12 last year, a significant fall.

He does address the nagging issues at the storied firm, including ill-conceived investments in clean tech, a late-to-the-game move into social media, and even its big stake in stock-declining online gaming giant Zynga, in a video (below) and in several pieces, one of which is titled ““John Doerr’s Plan To Reclaim the Venture Capital Throne.”

More like “Game of Thrones” from reading it; there is another, more critical article in the New York Times that appeared yesterday. That piece focused on Kleiner’s investment in the troubled green-car startup, Fisker Automotive, and also the firm’s ongoing sex-discrimination lawsuit with former partner Ellen Pao.

“It was a challenging year, one of my more challenging years in the venture business,” said Doerr to Forbes.

Indeed, although Forbes does hand Kleiner a hey-we-have-some-sharpie-young-folks-here-too! gimme with its focus on “new generation” partners Megan Quinn and Mike Abbott in an interesting Q&A, as well as yet another piece on Kleiner supporters — such as Google’s Eric Schmidt — touting the firm as perhaps down but definitely not out in the “mojo” department.

“John always wins eventually, and the reason he always wins eventually is because he has the processing power and human energy,” Schmidt told Forbes. “Whatever the set of challenges, he will drive the change in the firm. They’ll have a crisis meeting and another crisis meeting, but he will do it. It may be messy but he will get them there.”

Presumably, if Doerr and team can get some mileage out of its Twitter investment next year and somehow turn around Zynga’s moribund stock. (Kleiner has held on to a pile of it, which is why Doerr recently joined the board that already had Kleiner’s Bing Gordon on it.)

On problem for Kleiner, and boon to others like Accel and Greylock, was that the firm was not early in Facebook, whose IPO — as rocky as it was — gave many VCs making the top of the Midas List the needed turbocharge in terms of performance. Other key companies to help VCs look good this year, according to the Forbes report: Workday, LinkedIn and Skype.

Here’s Doerr, who is indeed a legend, even if more bruised and battered this year, talking about it all to Forbes’s Connie Guglielmo, in the video interview:

Speaking of media attention, here’s a more provocative video interview by Forbes with Sequoia’s Doug Leone (No. 4, up from No. 18 last year), in which he takes aim at VC firms that do too much self-promotion — three guesses which pioneering browser inventor he is referring to here, and the first two don’t count. He called it an “embarrassment,” although Sequoia did hire an excellent PR person from Google this year — nonetheless making the point that the focus should be on entrepreneurs and not investors.

Except, of course, when it comes to scoring high on the Midas List.

Marin, which was founded in 2006 by CEO Christopher Lien, has not reported a profitable year. It had revenue of $42.5 million in the first nine months of 2012, up from $24.7 million for that period in 2011.

The company has raised about $100 million from backers including Benchmark Capital, DAG Ventures, Temasek Capital, Focus Ventures and Crosslink Ventures.

San Francisco-based Marin helps advertisers analyze and manage campaigns on Google, Baidu, Bing, Facebook and Yahoo. Customers cited in its filing include ModCloth, PriceGrabber and Razorfish.

Because of the range of data it sees, Marin can do things like provide analysis and forecasting for mobile click-through and conversion rates.

The IPO is being underwritten by Goldman Sachs, Deutsche Bank, UBS, Wells Fargo and Stiefel.

This is how Nextdoor, the private social network focused specifically on the neighborhood, was built. Users communicate with one another to form tighter bonds around their community, only sharing identity information directly with those inside their area, usually spanning no more than a handful of blocks.

But Nextdoor needs to expand faster, before another startup moves in on its turf (or evicts them, if you’ll pardon the analogy). And the company aims to do just that with Nextdoor 2.0, a revamp of the site with features aimed at jumpstarting growth while focusing on the startup’s strongest areas.

The biggest area of change: Instead of restricting users to their previously cordoned off districts, they’re able to post information to nearby neighborhoods, those bordering the area a user resides in. That’s different from before, where users were made to keep up with the Joneses only in their immediate vicinity.

Philosophically, it’s about crossing boundary lines where it makes sense, and posting information about local activity and goings on with those still close enough to care about it.

“It’s powerful,” CEO Nirav Tolia told AllThingsD, “because it begins to let groups emerge that transcend neighborhood lines.”

From a business and growth standpoint, however, it’s a jumpstart in increasing engagement (in theory, at least). Move folks past just keeping in communication with their closest neighbors, and you increase the potential for engagement and activity on the service itself. Sustaining that just begets more growth, and for a young startup with ambitions as high as Nextdoor’s, growth is good.

But is growth at the cost of the company’s value proposition too much? When I spoke with Tolia in the past about Nextdoor, the biggest selling point on the network was the company’s built-in constraints; it’s more private than Facebook, LinkedIn or Twitter. And it’s supposed to be.

To that point, it’s worth noting that Greylock Partners led a new funding round of $21.6 million, adding managing partner David Sze to the Nextdoor board. Sze’s history involves early work on both LinkedIn and Facebook, helping both companies grow into what they’ve become today. (Shasta Ventures, Bezos Expeditions and Google Ventures all also participated in the round.) Perhaps Sze’s influence, among others, convinced Nextdoor and Tolia that it needed a kick from a growth perspective.

For what it’s worth, Path — another private social network at which Sze is an adviser — also made major changes to its app, all aimed at kickstarting growth and engagement. Perhaps a growth rate that burns too slow isn’t enough in what Tolia described as a “winner-take-all market” such as the one he sees Nextdoor competing in. Move fast, or get usurped by someone even faster.

In that vein, Nextdoor’s 2.0 user interface has seen some tweaking, and Tolia says it has been optimized for mobile phone and tablet use, bringing feature parity across platforms beyond the desktop. We should expect mobile apps sometime in the next year or so, as well.

I imagine that when those apps do come out, they’ll sync up with Nextdoor’s third major emphasis, crime and safety. It’s one of the biggest use cases for those on the Nextdoor network, so the startup is playing to its strengths. Urgent alerts sent through the service can reach users by SMS, and Nextdoor eventually plans to integrate police and fire department notifications as well.

Time will tell on the company’s future plans. My best guess is that after cooperating with local government and now institutions focused on safety, the site will likely aim at other obvious community pillars. Churches? Or perhaps schools?

Whatever it has in mind, it certainly has the money to do it. With upward of $40 million raised and Tolia saying most of that is still in the bank, the company has plenty of room to grow.

We’ll have to wait and see if everyone in the neighborhood agrees.

The preeminent three-month start-up accelerator program gets book-length treatment in Randall Stross’s new book, “The Launch Pad,” to be released this Thursday.

Stross is a New York Times columnist whose last book about the start-up world was “eBoys,” a profile of Benchmark Capital during the dot-com boom.

Y Combinator gave Stross extensive access as he followed the summer 2011 “batch” of 64 companies (including one that dropped out) through the application process, to receiving an automatic $150,000 in funding from top venture capitalists, through their business and strategy decisions, and culminating with their investor pitches on “Demo Day” at the end of the session.

Via email, Y Combinator leader Paul Graham called the book “remarkably accurate.”

Graham gave me his capsule review: “I think people will find it interesting. It has all three of the things that make a book interesting in my opinion: It’s (a) based on close, first-hand observation (b) of something that’s unfamiliar to most people and yet (c) has broader implications.”

After reading the book myself, my take would be that “The Launch Pad” lacks a major breakout storyline, but it’s full of meaty conversations about start-up strategy that could be applicable to anyone starting a company.

Having dipped in on Y Combinator events more than a few times myself, I was interested to hear more about what Stross thought and saw of the program from the inside. Here’s a lightly edited transcript of our phone conversation:

Liz Gannes: What do you think is the broader applicability of the Y Combinator story? I saw the book excerpt in Vanity Fair ran with the title “Who Wants to be a Billionaire,” and maybe that appeals to a broad audience as an aspirational thing. But I wonder if this underlying idea about the potential for start-ups as an economic force is something that you think is a mass message.

Randall Stross: I don’t think the YC founders think of themselves as working on the ticket to become a billionaire. That was Vanity Fair’s choice of word. I think what is driving these founders is the chance to work on their own projects without being an employee. The autonomy that is possible in start-ups excites them and, potentially, the rest of us.

Now, YC, by its nature, is an accelerator that prizes hacking skills, and most of the teams are all technical. So, in that aspect, they don’t hold out a model for those of us who are not going to be a technical co-founder. But, then again, that summer batch did have [online coding school] Codecademy, which taps into the wishes of non-technical people following the start-up scene.

Randall Stross

Let’s talk about Codecademy for a moment. It seemed like Codecademy was one of the most interesting stories in the book, in that they broke all sorts of rules and expectations because they really didn’t know what they were doing, but then emerged to be one of the most promising companies right at the end of the batch.

Yes, one of the things I didn’t expect was how much experimentation with ideas took place during the YC session. A number of the companies changed ideas during the session, a few have changed them even after Demo Day and fundraising, and investors seemed to accept that this is to be expected.

That you didn’t lose your headstart by being a late bloomer?

Right, and that’s one of the most interesting developments that makes the scene today different than it was in the late 1990s, when I was working on my book about venture capital and start-ups, “eBoys.” Then, the initial funding would be $5 million to $20 million, and it would take longer to prove out the idea, much longer. And it would take all that money, because you were writing out big checks to the Oracles and the Suns to get started.

And now you can start with the most modest of sums, and not even use all of that up in the course of discovering that idea isn’t going to pan out and you should try something else.

Have you been back to Benchmark Capital at all? How do you think they’re relevant in a world with Y Combinator and lower start-up costs in general?

I haven’t been back to Benchmark, but what has happened is, since then, this layer between individual investors and venture capital firms that specialize in early-stage investing. There’s this other world that has appeared — Y Combinator, 500 Startups, TechStars — that didn’t exist before, that is funding seeds on a much larger scale than an individual angel would be able to do.

Even though we talk about early-stage venture capital, that adjective, “early,” turns out to need some modification, and so we see venture capital firms, like Benchmark, Andreessen Horowitz and all the rest, being kind of follow-on investors.

Or paying to get involved in every YC company, like Andreessen Horowitz and Yuri Milner and SV Angel now do.

Right — which means they’re no longer attempting to choose.

One of the criticisms of Y Combinator is that it seems a bit cultish, with people becoming worshipful of Paul Graham and his teachings. Did you feel sucked into that at all?

As I say in the book, the founders quickly discover that, for some things, Paul Graham is the person to go to, especially for coming up with very grand ideas. And for other aspects, other questions, particularly marketing or design, there are other partners who are the ones that they choose to go to, so within Y Combinator there isn’t a single voice, they do have different strengths.

Paul Graham

I was thinking not just Paul Graham, but the larger phenomenon of Y Combinator.

You know, what it reminds me of is the kind of loyalty you’ll see at a highly selective college. You’re kind of blind to the virtues of other schools, once you’re in.

It seemed like the thing that you challenged Y Combinator on the most was the lack of women founders. Were you not convinced by YC’s rationale about the lack of female participants being essentially out of their control?

I actually buy the rationale about the makeup of the applicants. Ultimately, the only way there are going to be a lot more of any group that’s underrepresented at YC, is when those groups are well-represented among the ranks of applicants.

Another thing I observed from the book is there’s really such a focus on funding, with all the mentors priming the start-ups for how they will be perceived by venture capitalists.

It’s interesting that you remarked on that, because I hadn’t been aware of that impression being left, but I see where you get that. The book wants to give readers a sense of the entire class, and the main occasions when that happens is when they’re getting advice about their presentation for investors at the end. That’s just an artifice of my storytelling; it’s the only way I could get everyone in the same frame.

You had to stop observing at some point, and write and edit and turn in the book. In retrospect, is there anything more you would have asked?

What I want to see, Y Combinator can’t supply me right now, which is how these 63 stories turn out. I can only tell the beginnings of these stories — so what one wants to know is what happens. Because each member of the class has raised $150,000, they still have runway.

[Before the guaranteed funding started last year] Demo Day was the do-or-die moment, either you raise money or you were done. Had I written the book then, I could have written a coda: These companies lived, these companies died. But today the whole class has an opportunity to try.

Red Robot’s Co-Founders Pete Hawley (left) and Mike Ouye (right) standing in front of the company’s booth at PAX.

“Gamers are lazy,” said Pete Hawley, Red Robot Labs’ co-founder and chief product officer. “You can’t expect them to get off the couch.”

A year ago, the Mountain View, Calif., company attended the Penny Arcade Expo (a.k.a. PAX) in Seattle to launch its first game, Life is Crime. That weekend, three Red Robot employees hustled to make the convention a virtual game board, getting attendees to virtually commit more than 20,000 “crimes,” in addition to hospitalizing more than 1,000 people and stealing $35 million from real places.

The company is back at PAX this weekend with a much larger presence — 15 employees. It also secured a very small kiosk, which you practically need a map to find, given its far corner location behind Sony’s massive PlayStation booth.

But despite the company’s larger presence on the show floor, location-based gaming is still in its infancy, with many of today’s concepts still centered around checking into locations, like Foursquare. But Red Robot co-founder and CEO Mike Ouye said the company believes that there will be a much larger opportunity in the future for what they call “playing the planet.”

This year, Red Robot is here to show off its new fantasy game, Life is Magic, which will be launching soon for free on Android and iOS. In the fantasy land, players pan around a map of the U.S. to discover dungeons, where they must fight monsters. To purchase armor or new weapons, they virtually visit shops that exist in the real world, even if the stores — say, Best Buy or a candy shop — wouldn’t normally sell those items.

Given what Red Robot has learned over the past year, the game has two elements that the company believes are very important.

The first is to make it appear as if the player is in an actual fantasy land, while using real-world geographic data. Red Robot Labs does not use Google Maps. Rather, it has taken some of the underlying data found on maps, like lakes, rivers and mountains, and then places a fantasy-land overlay over that. Players may still feels like they are in Seattle because of the geographic layout, but also like they have escaped to a different land.

The second important aspect of the game is solving for gamer laziness.

In Life is Magic, players can travel to anywhere in the U.S. — without actually getting on a plane, taking a bus, or walking. Even if they aren’t really at the Starbucks on the corner, they can still interact with other players there. But the farther away the player goes from their real-world location, the more energy points they will need to conduct a task (those energy points can either be earned or purchased).

“It’s less about where you are, and more about where you can go,” Hawley said, given that 50 percent of mobile gaming happens in the home.

Ouye added that Red Robot is also licensing its technology to other game developers, including its maps, 3-D rendering capabilities, and points-of-interest database. Ultimately, he envisions having enough data from those games to make a “location interest graph.” A location interest graph would be able to reveal such data as the most popular app or the best gamers for a given area.

Three companies are currently licensing Red Robot’s technology, and the company has two internal games in the pipeline that will launch by the end of the year, including Life is Magic.

Red Robot has raised $15.5 million in capital from an impressive list of investors, including Benchmark Capital, Shasta Ventures, Rick Thompson, co-founder of Playdom, and Chamath Palihapitiya, a former Facebook executive.

Perhaps that’s hyperbolic. But let’s look at the facts: San Jose, the third-largest city in California, could use more efficient ways to communicate official messages with its constituents. And Nextdoor, a social network that bills itself as the private alternative to Facebook, LinkedIn and Twitter, needs more ways of spreading to new users.

Which is why the marriage of the two makes sense. As of Tuesday, the city of San Jose can use Nextdoor to distribute information to the network. With the new hookup, local government can send out messages to all those San Jose residents on Nextdoor, regardless of the neighborhood in which they reside. Ideally, it will mostly contain information on things like utility shutdowns, volunteering opportunities, emergency preparedness — all typical messages that you’d expect from local governmental bodies.

It’s different from the way the network usually functions. Nextdoor members are limited to communication within their neighborhoods, or cordoned-off areas within each district of a city. The idea there is to foster localized discussion within a community, without expanding beyond a critical mass. Unlike the typical user, the city of San Jose will be able to send out messages to everyone at once.

Nextdoor CEO Nirav Tolia

It looks to be a smart pairing between private enterprise and city government. But it is also a broader strategy move for Nextdoor, a network whose virality is self-limited by its very nature. To keep in line with its message of extreme privacy, users can only sign up if they’ve verified their physical address, and even after that, they can’t cross over into interacting with people outside of their neighborhood. Existing users evangelizing the network to newcomers by word of mouth is effective, the company tells me, but it is also slow. So cozying up to local governments, then, is another method of distribution — have San Jose blanket-pitch the service to its residents, and Nextdoor gets a better chance at citywide adoption. And if it takes off in a handful of major cities, it’s easy to think it will spread to others quickly.

The network is still private by design; the city (and other constituents) can only see you if you decide to respond to one of its messages. And even if you do respond, your only viewable information is your first name, last initial and the neighborhood in which you live. The idea is to maintain a level of accountability to fight against spam and abuse, while keeping residents comfortable with the amount of information they’re sharing about themselves.

This is the direction CEO Nirav Tolia thinks we’re trending toward: Localized discussion facilitated through the Internet, and made easier through the mutual trust gained in accountability. “It’s conceivable that in the next 10 years, all of this discourse will move online,” Tolia told me in an interview. “I would like to think that Nextdoor will play a critical role in doing that with cities and local governments.” As of now, more than 60 different cities — most of them in California — are using the network for top-down communications to their residents.

To be sure, Nextdoor isn’t a panacea for governmental communications issues. For one, city government can’t rely solely on Nextdoor for issuing communitywide alerts and notifications, mostly because not everyone in the city is signed up to use the network. And the city is limited on how many messages it can send out per week — and that may be restricting in terms of getting all of its communications sent out.

But the fiscally enfeebled San Jose will take what it can get. Along with the rest of California, San Jose’s budget is in tatters. “We’re broke,” councilwoman Rose Herrera told me in an interview. “Any free tools like these are more than welcome.”

Desegur will join the Mountain View, Calif., start-up as a VP of Mobile Engineering, in charge of the company’s game engine development. Before Zynga, Desegur was CTO at Big Fish Games, a major casual games company in Seattle.

The departure of the mid-level executive from Zynga coincides with the expiration of the social game company’s lock-up period today, which will allow more of its investors and employees to sell their shares on the open market.

The new shares forced Zynga’s shares down in afternoon trading, falling nearly 50 cents, or 7.2 percent, to trade at $6.14 a share, a new low.

The company’s stock price has plummeted by nearly 40 percent since the company’s IPO in December and has been hit hard by Facebook’s own IPO troubles. Zynga’s volume was also nearly twice as high as normal today with 36.5 million shares already trading hands.

Zynga’s CEO Mark Pincus will be onstage tomorrow morning at our D: All Things Digital conference, kicking off tonight in Rancho Palos Verdes, Calif., to address these issues and other.

In a release, Game Closure boldly claimed it was trying to take advantage of the lock-up period expiring to recruit employees from Zynga.

Founded in February 2011, the company has 30 employees today and recently received a $12 million investment from an impressive list of investors, including Highland Capital, Greylock Partners, Charles River Ventures, Benchmark Capital, General Catalyst Partners, SV Angel, Yuri Milner and Joi Ito. Game Closure participated in StartX, the Stanford student start-up accelerator.

Flying under the radar — and away from the eyes of the tech press that might have otherwise paid it attention — was sort of the plan, Demandforce chief marketing officer Patrick Barry told me in an interview a few minutes ago. “We built this company the old-fashioned way. That meant putting our customers first. PR and other things were not a priority. Our customers don’t read tech sites. We focused our efforts on reaching out to our customers.”

Whatever it was, it worked. Demandforce, launched in 2003, had attracted $11.8 million in venture capital investments, primarily from Benchmark Capital. By the time of the acquisition announced today, the San Francisco-based outfit had 300 employees, a profitable business with a run rate of $60 million in annual sales and — get this — $12 million in the bank.

So what does Demandforce do? Marketing for small businesses: Dentist’s offices and hair salons and auto-repair shops and scores of other types of small businesses that make up the majority of the U.S. economy and need help reaching out to their customers.

Demandforce, Barry told me, built bridges to the data stored in old-school marketing software programs — and there are dozens of them — that would typically run on desktop machines, freeing up the data and moving it into the cloud.

From there, it would apply its own marketing algorithms to the business: managing appointment reminders, asking customers for feedback and publishing customer reviews. So far, Demandforce has syndicated 1.5 million reviews to Google and CitySearch and other sites like them that accept Demandforce content.

Intuit said in a statement that it will make Demandforce into a new division in its Small Business Group; it will continue to be led by Rick Berry, Demandforce’s president and founder. He will report to Kiran Patel, the executive vice president and general manager of that group.

After the deal closes, Intuit said, it expects Demandforce to add one to two points to its revenue growth in fiscal 2013, and to be neutral or slightly dilutive this year. Intuit shares rose 44 cents, or less than 1 percent, to $58.04.

But there’s no denying the attraction of services like Amazon Web Services or Joyent or Rackspace, where you can spin up and configure a new virtual machine within minutes of figuring out that you need it. So, many companies seek to approximate the experience they would get from a public cloud provider on their own internal infrastructure.

It turns out that a start-up I had never heard of before this week is the most widely deployed platform for running these “private clouds,” and it’s not a bad business. Eucalyptus Systems essentially enables the same functionality on your own servers that you would expect from a cloud provider.

Eucalyptus said today that it has raised a $30 million Series C round of venture capital funding led by Institutional Venture Partners. Steve Harrick, general partner at IVP, will join the Eucalyptus board. Existing investors, including Benchmark Capital, BV Capital and New Enterprise Associates, are also in on the round. The funding brings Eucalyptus’ total capital raised to north of $50 million.

The company has an impressive roster of customers: Sony, Intercontinental Hotels, Raytheon, and the athletic-apparel group Puma. There are also several government customers, including the U.S. Food and Drug Administration, NASA, the U.S. Department of Agriculture and the Department of Defense.

In March, Eucalyptus signed a deal with Amazon to allow customers of both to migrate their workloads between the private and public environments. The point here is to give companies the flexibility they need to run their computing workloads in a mixed environment, or move them back and forth as needed. They could also operate them in tandem.

Key to this is a provision of the deal with Amazon that gives Eucalyptus access to Amazon’s APIs. What that means is that you can run processes on your own servers that are fully compatible with Amazon’s Simple Storage Service (S3), or its Elastic Compute cloud, known as EC2. “We’ve removed all the hurdles that might have been in the way of moving workloads,” Eucalyptus CEO Marten Mickos told me. The company has similar deals in place with Wipro Infotech in India and CETC32 in China.

Facebook has just announced that it will acquire Instagram, the popular mobile photo-sharing service, for $1 billion in cash and shares.

The social networking giant posted on the acquisition, its biggest yet, on its site, as well as on CEO and co-founder Mark Zuckerberg’s Timeline on Facebook.

Photos are critically important for Facebook, which has been slow to innovate in the fast-growing mobile arena in the important consumer space. By contrast, Instagram has taken the arena by storm, with its delightful and elegant app and the motto, “Fast beautiful photo sharing.”

Consumers have responded (including me — it is the only non-communications app I use many times a day). The San Francisco-based company — with only 13 employees — had 30 million Apple iPhone users before it came to Google’s Android last week, where it got more than a million new users in just 12 hours.

Still, despite all the usage, Instagram had not articulated a plan for, you know, making money. Now, that will presumably be Facebook’s problem to solve.

The Facebook acquisition has been kept very quiet, with its CEO Kevin Systrom working on it in conjunction with new fundraising efforts that would have valued the company at $500 million. Liz Gannes reported on this effort last week, which was poised to close, in fact, before the Facebook deal was struck over the weekend.

Until now, Instagram has received Series A funding of $7 million led by Benchmark Capital just over a year ago, when it only had 1.75 million registered users.

Seed investors include Andreessen Horowitz — which did not follow on later — and Baseline Ventures. Also in the Benchmark round: Twitter creator Jack Dorsey, former Facebooker Adam D’Angelo and Chris Sacca.

In a blog post titled “Instagram + Facebook,” Systrom promised no change, except for the $1 billion mountain of cash:

“It’s important to be clear that Instagram is not going away. We’ll be working with Facebook to evolve Instagram and build the network … The Instagram app will still be the same one you know and love.”

Zuckerberg also promised that Facebook would keep Instagram independent, and that such a large purchase would be rare for the company, which is set to go public soon.

“This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users,” he wrote. “We don’t plan on doing many more of these, if any at all.”

Here is the full press release from Facebook:

Facebook to Acquire Instagram

MENLO PARK, CALIF. — April 9, 2012 — Facebook announced today that it has reached an agreement to acquire Instagram, a fun, popular photo-sharing app for mobile devices.

The total consideration for San Francisco-based Instagram is approximately $1 billion in a combination of cash and shares of Facebook. The transaction, which is subject to customary closing conditions, is expected to close later this quarter.

Mark Zuckerberg, founder and CEO of Facebook, posted about the transaction on his Timeline:

I’m excited to share the news that we’ve agreed to acquire Instagram and that their talented team will be joining Facebook.

For years, we’ve focused on building the best experience for sharing photos with your friends and family. Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.

We believe these are different experiences that complement each other. But in order to do this well, we need to be mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook.

That’s why we’re committed to building and growing Instagram independently. Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people.

We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook.

These and many other features are important parts of the Instagram experience and we understand that. We will try to learn from Instagram’s experience to build similar features into our other products. At the same time, we will try to help Instagram continue to grow by using Facebook’s strong engineering team and infrastructure.

This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.

We’re looking forward to working with the Instagram team and to all of the great new experiences we’re going to be able to build together.

But some deserve the attention: It looks like Instagram is close to wrapping up a Series B round led by Sequoia Capital, according to several sources close to the situation.

Instagram co-founder and CEO Kevin Systrom

The maker of the fast-growing photo-sharing app, which just made its way to Android, is set to receive $50 million at a $500 million valuation, the sources said. Others joining the round could include DST Global.

The Wall Street Journal had reported that some were skeptical that Instagram deserved a half-billion-dollar valuation without revenue to speak of, but there does not seem to be a lack of people wanting to get into the deal.

Instagram received Series A funding of $7 million led by Benchmark Capital just over a year ago. At the time, it had 1.75 million registered users.

The company had 30 million iPhone users before it came to Android this week, at which point it got more than a million new users in 12 hours.

Instagram, which just got its own office on San Francisco’s South Park, had 13 employees at last count. CEO Kevin Systrom declined to comment on fundraising.

(Image courtesy of JD Lasica on Flickr)

The bill makes it easier for some elite companies to stay private, but it also makes it easier for companies to go public by reducing regulatory burdens associated with U.S. IPOs. I spent some time this week asking venture capitalists, secondary market organizers and CEOs how they think it will affect their business.

First of all, the bill says companies with less than $1 billion in revenue — called “emerging growth companies” — don’t have to make Sarbanes-Oxley audited financial reports for up to five years, don’t have to make Dodd-Frank compensation disclosures, can meet with investors before filing to test the waters, and have other rules relaxed.

Here are some relatively readable summaries of the Jobs Act from law firms Perkins Coie and Latham Watkins, and investment bank Goldman Sachs.

There are a slew of rule changes, but the consensus from everyone I talked to is that the JOBS Act is more a reducer of friction than a significant change to the incentives around going public.

The JOBS Act is “more of a perception gain,” said Benchmark Capital partner Bill Gurley, speaking on a panel on IPOs organized by Wealthfront at the Rosewood Sand Hill last night. “It’s marginal, it’s not a revolution.”

Still, the IPO costs today are pretty major, and anything that reduces them could be good for would-be public companies. If it costs $3 million to $5 million today for a company with $80 million in revenue and 10 percent operating margins to go public, “that’s half of your profit right there,” Gurley said.

Multiple speakers at the event griped about the cost of Sarbanes-Oxley as well as the industry of consultants and advisers that has arisen around it. They praised the JOBS Act’s move to give young companies more time to comply so they can push back on the “bullshit overhead” surrounding compliance, as Aruba Networks CEO Dominic Orr put it bluntly.

Some companies anticipate a more dramatic and material effect. Speaking from Washington, D.C., where he’d flown in for the JOBS Act signing, Rally Software CEO Tim Miller told me, “If [the JOBS Act] had passed a year ago we’d probably be a public company today. Right now, it’s so expensive to go public as a small-to-midcap company that it would have taken all our potential profits and then some — and sharing that information publicly would have been a competitive threat to our business.”

On the other hand, another part of the JOBS Act makes it easier for some private companies to stay private. It raises the shareholder limit before companies are required to make public disclosures to 2,000 from 500. And that 2,000 doesn’t include employees.

The consensus I heard is that the infamous 500-shareholder limit has gotten a lot of publicity for the way it affected Google and Facebook, but the reality is that it doesn’t impact very many companies.

Still, raising the limit could, for example, take pressure off Twitter.

A byproduct of the 500-shareholder limit has been the use of restricted stock units, rather than regular stock options, by companies like Facebook, Zynga and Twitter so they can keep hiring without passing the mark. RSUs have become common enough that the SEC released general guidelines for them earlier this year.

RSUs are non-transferable and have no strike price — they’re activated only when a company is sold or goes public. So it’s possible that, post-JOBS Act, companies will go back to providing a more traditional equity upside with stock options.

But some VCs pointed out that the other benefit of RSUs is that they help companies avoid reporting “409A valuations,” which are the tax code’s requirement for a publicly disclosed fair market valuation associated with stock option grants. Private companies like to avoid telling people how much they’re worth.

The coincidence of the JOBS Act and the impending Facebook IPO seems to be prompting the industry to consider the state of secondary markets for private company stock — and perhaps turning away from them.

One of the secondary trading leaders, SecondMarket, last week laid off 10 percent of its staff, while referencing the Facebook IPO.

SecondMarket SVP Jeff Thomas told me this week he thought the major impact of the JOBS Act will be a movement away from RSUs as companies revisit their compensation incentives for employees. Of course, that would be in his interest — because RSUs are non-transferable, they can’t be traded on secondary markets.

Even if going public gets a little bit easier, public markets still come with the problems of “casino investors and quarterly reporting demands” that companies would rather avoid, Thomas argued.

But Gurley and other VCs were dismissive of organized secondary markets. They prefer that their private companies figure out more controlled ways to manage late-stage liquidity for early investors and employees.

Sequoia Capital tells its portfolio companies to include a “right of first refusal” in all their stock options so they can buy them back instead of allowing outside transactions, said long-time partner Doug Leone at the Wealthfront event last night. “Within Sequoia companies, that door is getting shut,” he said.

It’s just a seed round, but a significant one — the company isn’t disclosing the amount, but it should tell you something that the lead investor is Benchmark Capital, which doesn’t usually do seed investments, as a matter of practice. Other investors include SV Angel, CrunchFund, Andy Bechtolsheim, Charlie Cheever and Ariel Poler.

Highlight, which was just released a month ago, has persuaded an impressive selection of VCs and techies to share their actual locations with people they don’t know. Just in the past few weeks, I’ve been notified on Highlight that a VC was within 150 meters of me at a ski resort, that an early Facebook guy was merging onto 280 at the same time as me, and that a Google exec was a block away from my home in San Francisco. And I was officially “friends” with only one of the three people — the others just had mutual connections in common.

What seems to make people feel comfortable with automatically sharing their location on Highlight is that it’s not shared all the time. Users get pinged when someone with mutual friends or common interests on Facebook is nearby, with a one-time snapshot of that person’s location.

Highlight is also making its app available outside the U.S. starting today. Co-founder Paul Davison told me he’s especially eager for people to use Highlight when they travel. There’s currently no setting to only get Highlight notifications about people you are already friends with — by design, the app is meant to encourage serendipitous connections. For me personally, that’s a bit of a chafe in my hometown, but I can see how it might be exciting to meet friends-of-friends while traveling.

Davison also said a new version of Highlight will be released before the SXSW festival in Austin, Texas, next week that’s built to decrease its pull on users’ batteries (which is indeed an issue with constant location-sharing), and to give users tools to mark people as interesting and friend them on Facebook or follow them on Twitter.

Highlight started when Davison was an entrepreneur-in-residence at Benchmark and still has a team of just two people, based in San Francisco. Competitors include Glancee.

The new location-sharing apps promise to provide more value to users than ever — but they will surely teeter awfully close to the edge of creepy for many people.

Unless you go to Stanford or one of the 10 other colleges where it’s been tested, Glassmap may not have crossed your radar.

The stealthy-till-now company came out of the Y Combinator program last summer, and it’s specifically focused on colleges, families and tight groups of friends. The Glassmap app for iOS and Android constantly shares users’ locations and shows them on a map.

Glassmap founder Geoff Woo says his company’s secret sauce is the work it’s done around managing battery drain, a common problem with smartphone apps that use GPS. This is done through careful management of pushing and pulling data from each user’s client version of the app.

Woo contended that Glassmap is also “more social” than other passive location-sharing services that are not for dating, like Google Latitude and Apple’s Find My Friends. He noted Glassmap features such as integrated text messaging, calling and virtual “waves” (like Facebook “Pokes”). Outside of college campuses, Woo said he sees the app being used among families and close groups of friends.

Meanwhile, another new app that’s getting some attention in Silicon Valley is Highlight, which, like Glassmap, constantly transmits users’ locations, but is very different in practice.

Highlight tells iOS app users when they are in the vicinity of their Facebook friends and other people they might want to get to know, based on common friends and interests.

Highlight explicitly does not show users on a map, but rather pinpoints moments when two users are in close proximity to each other (within 150 meters). The idea is to increase serendipity.

“Highlight makes people friendlier,” co-founder Paul Davison told me.

“The real world is like Facebook where every profile is just a single photo,” Davison said. And so Highlight — which Davison started as an entrepreneur-in-residence at Benchmark Capital — aims to put those faces in context.

Okay, sure, but what about the creepy factor? “If you build this simply enough with the right privacy controls, it could be useful to everyone in the world,” Davison argued.

I personally think Highlight is interesting, especially in the run-up to the location-sharing mecca of SXSW Interactive in Austin next month. But even in this young space, the claws are already out.

When I asked Woo what he thought of Highlight, he quickly dismissed it by saying, “You could just talk to people on the street if you really wanted to. In the mainstream world that’s not something people want to do.”

That was July. Wednesday, Domo will announce that it has raised another batch of money, and is bringing in a new investor. The company has closed a $20 million round led by Institutional Venture Partners.

IVP, which had invested in Omniture and so has a history with James, is joining an all-star cast of investors including Benchmark Capital; Andreessen Horowitz; Ron Conway and David Lee of SV Angel; and Hummer Winblad, plus a bunch of personal investments. The round — which is being described as an A-1 round, brings Domo’s total capital raised to date to $63 million.

IVP general partner Todd Chaffee said Domo is an example of a dynamic management team going after a high-growth market. “We know Josh has the experience to build Domo into a disruptive and dominant player in a growing $10 billion market,” he said in a statement. Aside from Omniture, IVP has backed HomeAway, MySQL, Twitter and Zynga.

James wouldn’t tell me the implied valuation, but he did concede that it’s upward of “a couple hundred million.” And if that’s not surprising enough, what’s equally surprising is one possible use for the money: Acquisitions. Well, maybe.

“Let’s just suppose, and this is 100 percent supposition,” he told me over the phone Tuesday, “that we want to buy someone. We’ve thought about it. We’ve had potential targets cross the email threads. It’s not the right time to do that stuff just yet. But it’s nice to know we have the flexibility when the time comes.”

So where’s Domo, the business intelligence software-as-service play he was building? It’s running as a demonstration with a few early customers, he says. And he’ll have more to say about it publicly in about three to four months.

“We have a few thousand people who say they want to see a demo, and we’re working through that list,” James says. “The feedback has been more positive and at a higher rate than I would have thought possible. I think we’re going to have to figure out how to do a lot of installations all at once.”

That’s what we call a good problem to have.

This time the target is Cotendo, a company that uses a network of 30 data centers distributed around the world to put video content physically closer to consumers, and thus speed up delivery, especially to mobile devices. The acquirer is Internet concern Akamai, which says it will pay $268 million, plus the assumption of unvested options.

Cotendo had been reported to be the subject of a bidding war between Akamai and rival Juniper Networks. Breathless reports at the time, sourced to enthusiastic Israeli newspapers, valued Cotendo as high as $350 million. The deal will close during the first half of 2012.

Even at the lower price, the deal marks a nice exit for several U.S.-based venture capital funds. Cotendo raised $7 million from Sequoia Capital and Benchmark Capital in 2009, and then another $12 million in a round joined by Tenaya Capital last year. In June, it took a $17 million strategic investment from Juniper and Citrix Systems.

Cotendo had grown into an Akamai competitor, with a reputation for being faster at some things than Akamai, and also cheaper to boot. That made it an obvious Akamai target, given its history of acquiring rivals — usually after suing them. In 2005, it took out Speedera Networks for $130 million, after a contentious patent lawsuit between them. Akamai had sued Cotendo last November. So the next time Akamai sues someone, set your stopwatch, because the defendant may be the next one to be acquired.

Akamai’s statement on the deal is below:

Akamai to Acquire Cotendo

Combined technology and teams expected to help accelerate pace of innovation in cloud and mobile optimization

CAMBRIDGE, MA and SUNNYVALE, CA – December 22, 2011 – Akamai Technologies, Inc. and Cotendo announced today that the two companies have signed a definitive agreement for Akamai to acquire Cotendo.

Helping to mitigate the challenges of operating in a hyperconnected world, Akamai provides a secure platform over which businesses can engage users across the Web, mobile, cloud, or a mix of public and private network environments. Cotendo offers an integrated suite of Web and mobile acceleration services. The combination of the two companies’ technologies and teams is expected to increase the pace of innovation in the areas of cloud and mobile optimization.

“As we look to accelerate growth across the dynamic landscapes of cloud and mobile optimization, we are excited to be joining forces with Cotendo,” said Paul Sagan, president and CEO of Akamai. “Cotendo’s technology, partnerships and people are a strong complement to Akamai. Together, we believe there is tremendous opportunity for our combined technologies as enterprises embrace the move to the cloud and seek solutions for an increasingly mobile world.”

“The Cotendo team is very proud of our accomplishments in delivering proven and effective solutions for accelerating Web and mobile assets. By combining our innovative technology and employees with Akamai, we expect our customers and partners will gain access to a comprehensive, global platform and wider portfolio of leading-edge services supported by some of the most experienced providers in the industry,” said Ronni Zehavi, CEO and co-founder of Cotendo. “We look forward to working with Akamai in an effort to create the strongest offering in the industry.”

Founded in 2008, Cotendo is headquartered in Sunnyvale, CA, with a technology center in Israel. Cotendo currently has approximately 100 employees, with over 50 based in Israel.

Under terms of the agreement, Akamai will acquire all of the outstanding equity of Cotendo in exchange for a net cash payment of approximately $268 million, after expected purchase price adjustments, plus the assumption of outstanding unvested options to purchase Cotendo common stock. The closing of the transaction, which is subject to customary closing conditions, including regulatory approvals, is expected to occur in the first half of 2012.

The San Mateo, Calif.-based Edmodo has one of those growth curves that grab investors’ attention. It’s now at five million users, up from 500,000 a year ago.

Edmodo supports a range of classroom-specific activity, from internal message boards to online quizzes and grading, both on the Web and mobile devices. The Edmodo interface looks a lot like Facebook — or especially an enterprise collaboration tool like Yammer.

At the moment the service is completely free. Edmodo Chairman Rob Hutter told AllThingsD the company doesn’t have any immediate plans to bring in revenue. The VC funding is meant to fuel continued growth and hiring.

This is the first joint investment for Hoffman and Cohler, who are both newly minted hotshot venture capital partners, and who previously worked together at LinkedIn and in some capacity at Facebook (where Hoffman was an early investor and Cohler was an early employee). Other Edmodo investors include Union Square Ventures and Learn Capital.