There’s a whole new thing that’s making its way into social enterprise applications that’s basically a takeoff on our deep-seated need to be praised and rewarded and recognized even in small ways, for what we do, what we know, or something else special about us.

Foursquare, the location-based social network, tapped into this with its badge-based system that makes going places and checking in a bit of a game. Go enough places, and every so often you unlock a “badge” that you can show off to your friends. Nobody really pays attention to who has what badge, but when you get one, you know, and it’s a little bit of fun.

In the context of a workplace social and collaboration environment, the person in sales to land the most new clients might get to display a “go-getter” badge in their profile. In accounting, those who can solve the most tricky problems might get a “Spreadsheet Ninja” badge. You get the idea.

It’s called “gamification,” and to me, it seems like a feature that social enterprise software outfits should be building themselves. And yet there are companies who are building gamification platforms that can be adopted as an add-on option for social enterprise software.

Today, the newly public social enterprise company Jive said that it is adding gamification features to its products, and is partnering with a company called Bunchball to do it.

Believe it or not, Gartner has actually studied this trend, and said it expects 70 percent of companies of any reasonable size to gamify at least one application within the next two years. The thinking behind it is that if you reward employees with badges they can display in the social application that everyone uses at the office — and let’s face it, they are basically just like Facebook, but for the office — you’ll take things like on-the-job training sessions and performance metrics, even your own health, a little more seriously.

It also adds another layer of engagement to the application itself. There are lots of stories of offices who adopt social enterprise software, but don’t get buy-in from employees or certain departments who resist. Add badges and a little bit of a competitive edge, and people are more likely to get involved and stay involved.

So, who’s Bunchball? A gamification start-up that, according to Crunchbase, has raised $17 million from investors including Triangle Peak Partners, Northport Investments, Correlation Ventures and Granite Ventures. And its customers include Warner Bros., Comcast, NBC Universal, and Disney’s ABC Television. Yes, this is a real thing.

Real enough that there is more than one company in the space. Another I’ve encountered is Badgeville, which is based in Menlo Park, and which last year landed a $12 million series B round of funding led by Norwest Venture Partners, with El Dorado Ventures, Trinity Ventures and the Webb Investment Network all participating. Its customers include Samsung, CA and Deloitte.

And Salesforce.com started adding gamification features to its Rypple performance-management application. If you do a good job on something, you get some thanks from the boss that you can show off to your colleagues.

Personally, I don’t quite get the attraction. And it just seems to me that these gamification companies are creating something that should be nothing more than a feature inside a bigger social platform. As such, these outfits building gamification platforms are probably takeover targets one or two years down the road. But that assumes that the trend takes hold as Gartner predicts it will.

But then again, we live in an age where the millennial generation — those born after 1980 — is entering the work force, and it’s the largest generation in American history. These are the twentysomethings who grew up with parents reflexively saying “good job” to their kids every few minutes, and so expect to be praised a lot on the job — which comes as a bit of a shock to their bosses from prior generations, who expected nothing of the kind. As those managers look for ways to adapt to keep their younger workforce happy, you can — like it or not — expect to see more of this sort of thing.

The shell company has grown through acquisition, picking up eight sites in the past two years, including RetailMeNot.com and Deals.com in the U.S., and VoucherCodes.co.uk in the U.K. In all, the company claims to attract 100 million unique visitors a year, most of whom are seeking discounts on anything from a gallon of milk to a pair of shoes.

This year, WhaleShark expects to be profitable on revenues exceeding $70 million.

The company’s CEO, Cotter Cunningham, told AllThingsD in an interview that the company is a classic roll-up. Its first $150 million in capital was spent on acquisitions, and that’s how it intends to spend its next $150 million.

Investors in the round include J.P. Morgan Asset Management and Institutional Venture Partners. Existing investors include Austin Ventures, Norwest Venture Partners, Adams Street Partners and Google Ventures.

To date, the company has raised nearly $300 million in two rounds.

“We are actively pursuing a number of acquisitions, and it will take us another year to spend the money,” Cunningham said.

The coupon-clipping business, while ancient, has gotten its sexy back in recent months, thanks to the success of Groupon and the consumer’s general shift in thinking to look for deals online rather than in the Sunday newspaper. VCs have recognized this behavior change and have gravitated to it like a teenager to Justin Bieber.

CouponCabin.com of Whiting, Ind., raised $54 million, Coupons.com secured $230 million in two megarounds, and CouponTrade.com has secured a more modest $2.4 million in capital. I’m sure there are many more that I’m forgetting.

Cunningham says a number of things are driving the trend, and while Groupon’s popularity has helped, WhaleShark is not a daily deals site.

“Groupon went out and created a whole new market with a big sales force,” he said. “They’ve done an amazing job of creating a new market focused on an interesting aspect of the coupon that didn’t exist two or three years ago. Our focus is more on taking the existing couponing model and moving it online.”

Essentially, it’s the newspaper circular that WhaleShark is going after. ”I’m a huge fan of newspapers, but yes, ultimately that’s what we are doing,” Cunningham ’fessed up.

Today, it has aggregated about half a million coupons, from 130,000 merchants, on its site. Many of them are uploaded by consumers, who received a free shipping code in an email from the Gap or Old Navy. Customers have self-reported to WhaleShark that they save about $20 on average per transaction.

The business won’t require even half the sales staff of Groupon. Today, WhaleShark has about 100 people at its Austin headquarters, and 40 people in the U.K. Cunningham anticipates adding 50 to 75 employees in Austin, and doubling numbers abroad.

The company earns a commission from about 10 percent of the offers it distributes on the site. Additionally, it hopes to support the sites through advertising as it attracts a large audience.

[Photo credit: sdc2027.]

Last week, PopCap accepted Electronic Arts’ bid of $1.3 billion, including earn-outs, and opted to turn down a smaller — but all-cash — $1 billion offer from Zynga.

With that kind of dough raining down on the games industry, it’s obvious that more blockbuster purchases will ensue.

If that’s the case, the question is who will be next?

First, it’s important to understand why there’s a sense of urgency. Right now, nontraditional digital gaming platforms, like mobile and social, are really starting to take off, and game publishers need new content and expertise to be a player on those platforms.

“The general conversations have increased,” said Kushal Saha, the managing director of the Information Technology practice at Cascadia Capital, a Seattle-based investment bank. “We are seeing a lot more activity in financings as well. When you have a $1.3 billion acquisition, that really creates a lot of tailwinds from investors and strategics.”

Tim Chang, a partner at Norwest Venture Partners, has a theory as to who will be the most active in the next wave of acquisitions: It will be companies from China and Japan that are trying to get a foothold in the lucrative U.S. games market.

Here are just some of the recent transactions: Tencent, the giant Chinese Web holding company, bought Los Angeles-based Riot Games for about $400 million; OpenFeint was purchased by Japan-based Gree for $100 million in April; and Japan-based DeNA bought San Francisco-based ngmoco for $400 million late last year.

Specifically, he says these companies will be looking to buy game studios, which can create content for new platforms.

Ngmoco is building a mobile social network, and while it develops some games in-house, DeNA will need much more content to be successful. Same goes for Gree, which purchased OpenFeint, a mobile social platform that has 100 million players signed up.

Gree’s Senior Product Manager Jori Pearsall said that Gree is trying hard to get up and running in the U.S., where they have hired about 40 employees who are independent from OpenFeint.

Pearsall says its first game is expected to launch soon on the OpenFeint mobile social network.

In other words, first comes distribution. Next up: content.

One example of this already taking place is the merger between 6waves and Lolapps, which was announced earlier this week. San Francisco-based Lolapps is making social games for Facebook, while Hong Kong-based 6waves has been more focused on building a publishing platform.

Together, the two will have a publishing platform with its own games.

One of the companies that is being considered an obvious acquisition target is Glu Mobile, which is making social games for smartphones and tablets. Since the PopCap acquisition was announced, Glu’s stock has been trading close to $6 a share, up from $5.20 early last week. It is now trading at $5.64.

Are people sniffing around Glu?

“Nothing is off the table. We’ll do what’s best for the shareholders. We have a vision and a strategy and we are executing on the goal of transitioning to one of the top three feature phone companies to our goal of being one of the top freemium tablet and smartphone games company,” said Michael Breslin, Glu’s VP of marketing.

Other potential acquirers are in the U.S., ranging from content companies like Time Warner and Disney to other game makers like Activision, THQ or Ubisoft. Zynga has been acquiring more than one company every month for nearly a year. Google could even be a candidate if it’s truly serious about its Google+ games network.

Other companies for sale that would have the content and the talent include any of the independent studios in the top 20 on Facebook or iOS, ranging from Crowdstar to RockYou, or even a virtual world like Linden Lab.

Photo Credit: Jason Pratt.

As the name indicates, the company is playing around in the gamification space, helping companies increase loyalty and drive engagement through the use of social rewards and analytics.

The round was led by Norwest Venture Partners and El Dorado Ventures with participation from existing investors Trinity Ventures and Webb Investment Network. In total, the company has raised $15 million.

Badgeville CEO Kris Duggan would not disclose the company’s valuation, but said that the funding comes after two seven-figure sales quarters in a row and growth of 40 percent quarter over quarter. He expects the company’s revenues to hit $5 million to $10 million this year.

The capital will be used to grow Badgeville’s team from 30 to 50 employees by the end of this year. It is looking to hire people in sales and marketing, customer service, and product and engineering.

Duggan said that while there are other companies in the space, they aspire to offer a platform that can easily be plugged into any business. “Some companies require lots of customization, and other players offer low-end, do-it-yourself tools. We are right in the middle and don’t require a lot of customization,” he said. “We want to be the Salesforce.com of gamification.”

Some of Badgeville’s customers include Discovery Communications, NBC, Bluefly, Interscope Records, Major League Gaming, Livemocha, Active Network and Deloitte Digital.

Bluefly, for example, is using Badgeville to add game mechanics to its e-commerce site, rewarding shoppers who watch videos, create wish lists, write reviews or read blog posts.

Tim Chang, Partner at Norwest Venture Partners, said gamification is like the modern-day United Airlines mileage program. What he likes about Badgeville is that it is taking a software-as-service approach, which will build a scalable business with recurring revenues.

Other players in the space include BigDoor; Bunchball, which recently raised $6.5 million; Novel, a stealthy Redmond, Wash.-based start-up; and likely more.

The daily deal site is mulling a strategic relationship with Lashou, which has experienced astronomical growth on par with Groupon.

Sources close to Lashou tell us that since the company launched in March, it has hired 1,500 employees and operates in roughly 200 markets in China.

Most impressively, its revenues are now totaling $3 million per week for an annual run rate of  more than $150 million.

Sources say Groupon may participate in Lashou’s next round of funding, which is on track to give the company a $1 billion valuation. Groupon has already submitted a term sheet, we have heard. A Groupon spokeswoman declined to comment.

The deal could still fall apart.

Groupon has not appeared to have decided on one strategy for entering the market. Other options it is weighing include forming a strategic alliance with Chinese Internet giant Tencent, or even hiring its own staff and working alone.

The Chinese market is known for being difficult to enter, and Groupon is feeling the pressure to get a piece of the action. To be a serious international player without the economic powerhouse is less than ideal as it prepares for a public offering, (which CEO Andrew Mason admits he hasn’t made a decision about yet).

So far, Groupon’s efforts in China have been scattered.

Kai-Fu Lee, the former president of Google China, who has an influential blog, has written about Groupon’s approach, saying that it has been relying on a company it purchased in Germany last May to lead its expansion into China, Xinhua reports. The rumor mill is rife with other reports of Groupon’s aggressive attempts to hire employees from other group-buying sites. It also suffered a recent setback when Ren Xin, who reportedly was in charge of marketing in China, resigned to consider other job opportunities.

While not operating yet in China, Groupon does have a presence in Asia. Groupon is in Hong Kong, Singapore, the Philippines and Taiwan through the acquisitions of daily deal sites uBuyiBuy, Beeconomic and Atlaspost, respectively.

Much like the U.S., China has tons of group-buying companies fighting to be No. 1. Other successful brands there are Meituan and Nuomi. Lashou has raised tens of millions of dollars in venture capital from Norwest Venture Partners, GSR Ventures and Rebate Networks. Meituan has attracted capital from Sequoia Capital.

NVP is investing $35 million into New York-based data warehousing and business intelligence firm 1010data, making it the first growth equity investment out of NVP’s new fund. Jon Kossow, who joined NVP as a partner last year to grow its growth equity practice–which essentially means the firm will be investing in mature companies that already have products and customers, instead of just young start-ups–will join 1010data’s board.

The 1010data investment is NVP’s first growth equity deal in a U.S. company since late 2007; in some previous U.S. growth equity deals, NVP was a passive investor and didn’t join the companies’ boards. The deal is just the latest sign of how NVP is diversifying its investment strategy and becoming more stage-independent. Last year, NVP also did a flurry of growth equity deals in India, for instance.

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Back then, dozens of dot-com companies–from Pets.com Inc. to Webvan Group Inc. to smaller start-ups–went belly up after burning through hundreds of millions of dollars. Their downfall was swift; virtually an entire sector of dot-coms was wiped out in a matter of months. Silicon Valley went on to lose 185,000 jobs, or one in five, between 2001 and 2005.

This time, the damage from the recession has been widespread rather than confined to technology. In addition, many tech start-ups appear to have learned from the free-spending mistakes of the dot-com era and have hoarded their cash. As a result, venture capitalists such as Promod Haque at Norwest Venture Partners argue that “we’re not seeing the kinds of [start-up] shutdowns we saw in 2000 in terms of the volume.”

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The new fund is unusual in this day and age amid a tough fundraising environment brought on by the recession. What’s more, many venture capitalists argue that funds need to be smaller to get back to the basics, especially since venture capital isn’t an industry that necessarily scales upwards.

Here’s what Promod Haque, NVP’s managing partner, had to say about all this:

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That funding comes just a day after news that competitor Playfish Inc. has agreed to be acquired by Electronic Arts Inc. (ERTS) for $300 million plus $100 million in potential earn-outs. A third company, Zynga Inc., which also makes games played on social networking sites, has raised nearly $40 million from venture investors and is currently locked in litigation with Playdom over theft of trade secrets.

We caught up with Tim Chang, principal at Norwest, to talk about Playdom’s latest funding. Here’s an edited excerpt of our interview:

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Game applications are among the most popular applications on Apple’s App Store, which lets users choose from thousands of software programs that developers have created for the iPhone and iPod Touch. Apple said last week that users have downloaded 800 million applications since last July, when the App Store opened. Out of the 25,000 apps available in the store, more than 6,700 of them are games, according to Mobclix, which analyzes iPhone application usage.

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Red Hat (RHT) this morning announced an agreement to acquire Qumranet, an Israeli company that provides a virtualization software platform, for $107 million in cash.

Qumranet’s Web site says that “organizations use Qumranet’s first product, Solid ICE, to host Windows and Linux desktops centrally on servers in the data center.” Investors in the company included Sequoia Capital and Norwest Venture Partners.

The company said the acquisition will not materially increase revenue in the Feb. 2009 fiscal year, but should add “up to $20 million” in revenue in fiscal 2010. Red Hat said the deal is expected to be dilutive to 2009 GAAP EPS by 5-6 cents a share, and to cash flow from operations by 3-4 cents.

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