Former Google international exec Adam Freed (pictured here) has taken a job as COO of Etsy, the crafts e-commerce site, which just raised another $20 million in venture funding.

Index Ventures is part of the new round, which also includes previous investor Accel Partners.

Union Square Partners and Hubert Burda Media are also investors, as well as Flickr co-founder Caterina Fake.

Etsy has raised almost $52 million overall since its 2005 founding, which gives it a valuation of more than $300 million.

Etsy’s CEO is founder Rob Kalin, who took over again as CEO at the start-up last year.

But Freed brings more solid management with a global flavor to Etsy, having been a director of international product management at Google (GOOG). He left the company two years ago.

In that job, he focused on the localization and development of the search giant’s international products and had also worked in international online sales and operations, including setting up Google’s online advertising operations in London, Paris, Hamburg, Tokyo and Sydney.

He also established Google’s multilingual online operations center in Dublin.

Oh, yes, Freed speaks nine languages, which will come in handy at Etsy, since it helps craftspeople globally sell handmade items online.

M5 offers mid-sized businesses and organizations including Amnesty International and Etsy the ability to manage work calls through the “cloud” — the tech term for the Internet — so employees can make and receive phone calls from anywhere in the world from any Internet-connected device, including cell phones and computers, as if they were going through their office line. Clients can also start a phone call on one device and seamlessly transfer it to another device mid-call.

Late last month, it added the ability to make and take calls through iPads. The app is still in the testing phase, but M5 Chief Executive Dan Hoffman says that it gives its clients yet another option for fielding their phone calls.

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But much as they irritated, those changes seem to have had a positive effect on eBay’s business. In its most recent quarter, eBay (EBAY) showed modest growth, narrowly beating analysts’ estimates thanks to some impressive growth in its PayPal online payment business. Add to this Donahoe’s unloading of most of Internet calling service Skype, a much criticized acquisition engineered by his predecessor, Meg Whitman, and his revamp of the company seems to be gaining momentum. But is it enough to reinvigorate eBay’s business and fend off Amazon (AMZN)?

Liveblog

11:31 am: A first question from Walt. You’re viewed by people as a sort of Web 1.0 company, and you’re all about auctions. Today you seem to be morphing into more of a no-haggle auction store, a buy-it-now venture.

Donahoe: We’ll never be a retailer. Initially, eBay started selling long-tail inventory and they sold it in an auction format and that made sense at the time. Today, eBay is 30-35 percent auctions. A lot of the inventory on eBay today is brand new. Now they’re not necessarily the same items you’d get in a retail store….But what you have on eBay that you don’t have anywhere else are items that have been returned or refurbished, items that are cheaper. EBay gives you a choice of inventory.

11:36 am: Walt–Do consumers get that? Do they understand that you’re only 30 percent auctions now?

Donahoe says they do. “I think perception does lag reality; I think there’s more inventory than people are aware of, but we’re correcting that….What eBay is very good for is if you have bulk inventory, we’re a good way to get rid of it.”

11:37 am: Walt asks about eBay’s other businesses: PayPal and Skype. Skype seems to be bigger than ever these days. Why couldn’t you make that work?

Donahoe says Skype is a fantastic business. But the challenge was one of focus. “In the Internet today, you can’t be all things to all people….And we didn’t have synergies with Skype…so we sold a portion of it.”

Walt–Well if there wasn’t synergy, why did you buy it?

Donahoe says that at the time eBay made the purchase there appeared to be synergies and the company hoped to make good use of its technology, but that didn’t quite pan out. “I’m not sorry we made the acquisition,” he said. “And I’m not sorry we divested it either.”

11:41 am: What’s the point of PayPal, asks Walt.

Donahoe: What PayPal’s done is to provide consumers with a safe way to make purchases online.

Walt jumps in and notes that it’s just as easy these days for people to use their credit cards. So why bother with PayPal?

Donahoe notes that things like cash and credit cards can be lost. PayPal cannot. “It’s a digital wallet,” he says, adding that he expects mobile payments to come into broad use within the next three years.

11:44 am: Continuing his riff on PayPal, Donahoe talks about the PayPal iPhone app, which allows people to “bump” payments to one another. “I think the idea of the digital wallet will facilitate digital commerce growth and PayPal’s growth as well.”

11:46 am: Walt–How big is your phishing problem? I get emails fairly often warning me that my PayPal account is in trouble for some reason. You are the target of a lot of phishing, aren’t you?

Donahoe: Phishing was an issue for eBay a few years ago. But over the last five years, we invested quite a bit of money fighting it, and I think we’ve done a good job.

11:48 am: Walt–So who’s your main competitor?

Donahoe says the usual suspects–Amazon, Etsy, Wal-Mart (WMT).

11:49 am: Donahoe–Wal-Mart is the largest offline retailer in the world. Costco (COST) competes in the exact same segment with the exact same business model very successfully. So does Target (TGT). The same thing can happen online. Amazon can be successful and eBay can be successful, too.

11:50 am: Is the iPad another big platform for you, Walt asks.

“I think more devices are becoming part of the shopping experience,” says Donahoe. The line between online and offline is blurring and I think these new devices are enabling that. He adds that he thinks eBay’s iPad app is the best eBay experience he’s seen to date.

11:52 am: A quick poll of the audience–Who has an iPad? Quite a few folks, evidently.

11:53 am: Walt–You say the iPad app is the best eBay experience, but this is a new device. You’ve been on the Web for years. Why isn’t that the best experience.

Donahoe: The core eBay Web experience–in the last few years we’ve gone from a [score of] 2 to a 4. But we’ve still got a long way to go, and we’re still focused on making it the best eBay experience in the world. But these new devices allow us to start over and make new customized applications that help us serve users in the way that they want to shop.

11:55 am: Why so much focus on fashion?

Donahoe says eBay is the largest seller of fashion in the world. What we’re doing is driving more vertical shopping experiences on eBay, he adds. We’re trying to offer more customized experiences in different categories.

11:56 am: Walt asks about StubHub. There’s a lot of controversy over the secondary ticket market.

Donahoe: StubHub is a marketplace. It never buys tickets. What it’s doing is enabling season ticket holders to resell the tickets they aren’t using. Sometimes for above-market prices, sometimes for below-market prices. What StubHub has done that the scalper market never could, is that it’s completely transparent. You know who the buyer is, who the seller is, and StubHub guarantees every purchase. It provides complete transparency.

Q & A

Q: Can you talk about PayPal’s role in paying for content?

A: Digital is going to be a big opportunity for PayPal. If you go on Facebook, you can buy game credits with PayPal. In the media world, we’ll have payment solutions such that content providers can have a PayPal button on their content and people can use it to purchase it. It will provide a seamless experience inside the content itself. Digital’s going to be a big opportunity.

Q: What do you tell sellers who feel they’re being nickel-and-dimed by eBay’s many fees?

A: I think for years, eBay was nickel and diming. But over the past few years, we’ve restructured our fees. Today, consumers can list for free and businesses can list in the fixed-priced format. We’ve tried to simplify and streamline our pricing. We’re still cheaper than Amazon.

Q: Why do my PayPal purchases default to my bank account when I’d like to use my credit card? Will you move toward a model where consumers can choose how they pay through PayPal?

A: Consumer choice is important to us, says Donahoe, adding that the vision is to offer multiple means of payment.

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as possible. It is not intended as a transcript and should not be interpreted as one.

Susan Lyne, whose site offers designer brands to members at reduced prices, said that by offering a limited number of products for a small amount of time, Gilt has overcome one of the biggest difficulties for online retailers: getting people to move from putting an item in their cart to actually buying it. Gilt’s site has often been compared with real-world “sample sales,” where buyers often scramble to get a few designer dresses before someone else snaps it up.

“The quickest anyone has ever gotten from login through checkout is nine seconds,” she said.

Ms. Lyne was speaking at the TechCrunch Disrupt conference, on a panel that also included Rob Kalin, the CEO of Etsy, an online marketplace for makers of hand-crafted items and the like. Both entrepreneurs believe they differentiate themselves from the Amazons (AMZN) of the world by giving people a more personalized experience.

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Perhaps plow it into more start-ups like Aviary, a Long Island-based design software company.

Bezos, via his Bezos Expeditions fund, has followed up an investment in the company earlier this year with another slug of cash. It’s part of a $7 million Series B round led by Spark Capital, best known in these parts as the guys who made a very big bet on Twitter, which Bezos also invested in.

If you’re sick of hearing about Web start-ups with just the vaguest sense of a business plan, Aviary may be a refreshing change. It is trying to make money by selling cheap, Web-based alternatives to popular, expensive design software, primarily the stuff that Adobe (ADBE) sells, like Photoshop and Illustrator. Granted, it doesn’t make much money yet: The company only began selling $24.95 subscriptions to its software suite earlier this year.

Down the line, Aviary also imagines it will be able to create an online marketplace where the creative types who use its software can bid on work assignments. Sort of like eBay (EBAY) meets Craigslist meets Etsy meets Amazon’s (AMZN) own Mechanical Turk.

Here’s the full press release:

Aviary Secures $7 Million in Series B Financing Led by Spark Capital

Provider of Creative Application Suite in the Cloud Makes Creation Accessible to All and Advances the Growing Digital Economy

LONG ISLAND, New York (October 26, 2009) – Aviary, Inc., a pioneer of a creative application suite in the cloud, today announced that it has received $7 million in Series B financing led by Spark Capital, with participation from existing investors, including Bezos Expeditions, a personal investment company of Jeff Bezos. With a suite of digital creation and editing software available as an online service, Aviary offers a simple and cost-effective solution for creators of all genres–from graphic design to audio editing – to express their creative talents and participate in the burgeoning market for digital goods. In conjunction with the investment, Mo Koyfman of Spark Capital will be joining Aviary’s board of directors.

“Aviary’s robust suite of online creative tools is fundamentally democratizing digital creation. Whereas the market for digital goods was once reserved exclusively for creators using proprietary desktop software, Aviary is delivering creative applications that allow anyone with a browser to participate,” said Koyfman. “And by doing so in the cloud, Aviary allows for seamless online creation, collaboration, distribution and ultimately monetization previously not possible. The Aviary model has the potential to exponentially increase the number of creators and collaborators contributing to the digital economy.”

Until now, the digital creation market has been largely dominated by desktop software solutions which are often cost prohibitive and involve complicated interfaces. By contrast, Aviary offers a powerful creative toolset in the cloud that enables professional and amateur creators alike to easily create their own digital works. The basic Aviary suite is available for free to users and includes an image editor, vector editor, audio editor and more. Users can also upgrade to the pro suite to gain commercial features such as unlimited private storage, as well as collaboration and community enhancements. For more information, visit http://aviary.com/.

“We are disrupting the status quo by eliminating the long-held barriers to digital creation and giving creators the tools they need to create, market and monetize their vision,” said Avi Muchnick, founder & CEO of Aviary, Inc. “We are extremely excited to have Spark Capital on board. Their broad-ranging internet, software and consumer experience will be a tremendous asset to us in furthering our mission to make creation accessible to creators of all genres.”

First off, as Digital Daily’s John Paczkowski pointed out to me today, you have to give Yahoo props for using Gogol Bordello as the soundtrack and–more to the point–actually knowing about Gogol Bordello in the first place.

“Since when does [Yahoo CEO Jerry] Yang listen to gypsy punk?” asked Paczkowski in an email to me today.

Since Bill Gates started eating churros with Jerry Seinfeld and adjusting his skivvies hands-free, that’s when!

Oh dear, Yahoo (YHOO) has succumbed to the hipster, ironic thing–an unfortunate marketing virus that has hit Microsoft (MSFT) of late too–in an under-the-covers “Start Wearing Purple” online marketing campaign.

The Internet company is now out with a Web site touting itself, advocating that people “celebrate purple.”

Purple and yellow have always been Yahoo’s colors–even while Google (GOOG) just up-and-grabbed the whole spectrum and emerged victorious.

Nonetheless, Yahoo is going to town on the purple idea, using a lot of its tools and products in the process to show itself off.

The effort starts with a video of multiracial hipsters doing wacky stuff, including a yodeling Yang (see at top), which makes it look like a very alternative version of “High School Musical.”

Also on the site: See purple-inspired photos from Flickr; view videos of “Purple Pranks” (first up, of course, ringers singing the purple song in an elevator to unsuspecting folks); peruse profiles of “Purple Picks” (like the cool crafts site Etsy and artist Clarence Lee) and “Purple Pioneers” (a mix of do-gooders and more hipsters, so far); and even search the word “purple” on Yahoo to fun-filled results.

There’s also a bunch of purple bikes apparently traveling the globe and taking pictures that will be uploaded to a Flickr map. And, natch, you can buy purple clothes.

After trolling the site for a bit, I can tell you I live in the dead center of San Francisco’s Castro neighborhood and we don’t get that purple here ever!

In other words, it’s all very high-concept, much like the dancing guy video that Yahoo did recently (see that very sweet morale-building video at the very bottom).

But to really resonate with the mass of users Yahoo needs to hold onto, as dull as this sounds, I would just like a simple explanation of why I should use Yahoo in my daily life.

The legendary Apple (AAPL) Mac-PC ads that Yahoo and Microsoft are clearly trying to mimic are good primarily because they have a message in each funny exchange about why you need to own a Mac.

Not so much with this quirky Yahoo effort, which is laudable, but a waste of time.

In the main “celebrate purple” video on the site, part of the tag line is: “Deep inside everyone is a Yahoo! waiting to come out. Set yourself free with a little purple.”

Actually, deep inside Yahoo is a Yahoo waiting to come out. And it is going to take more than purple to coax that magical creature out into the light again.