Betabeat first reported Union Square’s involvement today; sources I’ve talked to tell me this has been more or less a done deal for about month.

Turntable is still lining up angel investor/advisers that it wants to recruit from the ranks of high-profile music industry executives, and once that’s done they’ll make the whole thing official. I’ve asked Turntable and Union Square for comment, but don’t expect to hear back.

Closing the funding round — which I believe will be somewhere in the $6 to $7 million range — will give Turntable’s Billy Chasen and Seth Goldstein time to tackle their real challenge: Figuring out how exactly they’re going to work with the music industry.

The service, which lets users “DJ” streaming music for crowds who gather in online listening rooms, doesn’t have any deals with major record labels and publishers. Earlier this summer, the company told me that it planned to move forward as a “non-interactive” Web radio service, a la Pandora, which doesn’t have licenses, either: Instead it operates under the umbrella of the Digital Millenium Copyright Act, and pays copyright holders a rate established by an arbitration board.

But people familiar with the company say it is considering trying to strike deals with the labels after all. The upside is that negotiated pacts could give the service much more flexibility. The downside is that getting those deals done could take a long, long time — just ask Spotify, which took more than two years to break into the U.S.

At least one music industry source I trust, though, believes the fact that Spotify has gotten to the U.S. means there’s now some sort of music industry/business development glasnost. According to this line of thinking, the big labels are now more willing than ever to consider new arrangements, and perhaps Turntable can squeeze in through this window of opportunity.

My bet is that you can’t ever go wrong wagering on big music label intransigence, but we’ll see.

In the meantime, it’s interesting to note that this is the second big bet Union Square has made on music — at the beginning of the year, it announced an investment in music distributor SoundCloud.

Union Square partner Fred Wilson has always had a big personal interest in music, but until this year he hasn’t put his company into any music bets, precisely because of the licensing headaches that come from most ventures. Maybe the business really is changing.

Barack Obama, June 4, 2009, Cairo, Egypt

In past 8 days at least 12 #Egyptians set themselves on fire out of desperation: unemployment, poverty, corruption. #Jan25 #Egyptprotest
@monaeltahawy, January 25, 2010, Cairo, Egypt

I will keep on saying this. Youth Entrepreneurship is key in creating a long lasting impact in the Arab world! #Jan25 #Lebanon #Sidibouzid
@habibh, January 25, 2010, Beirut, Lebanon

As we left Cairo ten days ago to travel home to the U.S. after taking part in the first delegation of the State Department’s Global Entrepreneurship Program, we saw Egyptians huddled around TVs in the airport watching video of the Tunisian uprising on Al Jazeera. We had no idea then that a single “slap to a man’s pride” in Sidi Bouzid, Tunisia could lead days later to fierce protests in Cairo and the defacement of posters of Mubarak. While there is a good chance that the protests will settle down in the coming days in the face of a growing military presence, it’s clear that Egypt is at a tipping point–politically, socially and economically.

The pent-up frustration that Egyptians feel about the current regime is felt in different ways across the population. Our focus in Egypt was on a growing class of educated, tech-savvy entrepreneurs. While the frustration they feel may not be as intense as that of a fruit vendor subsisting on two dollars a day, there are a number of economic and cultural impediments that have historically limited their chances for success. Based on what we found, the promises of Egypt’s start-up scene lie in stark contrast to the desperation of its poor. The next few weeks and months will tell us a lot as to whether there is enough stability in the country to make external investors comfortable with its prospects.

Amr Ramadan is the kind of entrepreneur investors look for: he started his company Vimov with only $1,060 and begins his investor pitch by openly admitting the failure of his first product. His next product was a simulator for iPad developers that sold thousands of downloads at $32 each. His third product was the most popular paid weather app on the iPad, with over 350,000 users paying $.99 each. The next product in his pipeline, an ingenious take on personalized news, sounds even more promising. In Silicon Valley he would have a few hundred thousand dollars of angel money in the bank, and a couple of Series A term sheets from VCs in his pocket. But Amr is not in California, or even the United States. He is in Alexandria, Egypt, and he’s just one of a new class of young, educated and Internet-enabled entrepreneurs in the region.

We watched this narrative unfold firsthand in Egypt, which was selected as the pilot country of theU.S. State Department Global Entrepreneurship Program. The GEP is the government’s effort to promote and spur entrepreneurship around the world, led by passionate advocate (and successful entrepreneur) Steven Koltai. We met with a series of senior government officials, including Prime Minister Ahmed Nazif, who are committed to building a startup-friendly business environment. The Egyptian government recognizes that a nucleus of successful entrepreneurs is critical to catalyzing a sustainable middle class. While no single company is going to cure unemployment or increase the poverty line, an inspiring story of upward mobility could be an important populist spark.

Over the course of four days, we reviewed 32 presentations–culled from over 100 applications–from a variety of Web, mobile and hardware startups. Our delegation included the former CEO of CarMax; an investment banker, an MIT management scientist and a Silicon Valley VC. After two rounds of interviews, we awarded $20,000 to two companies: semantic search engine kngine and hardware accelerator SilMinds.

Haytham AbdElFadeel, the creator of kngine, is a 20-something hacker. His older brother works for him managing servers, while his father works from home as a day trader. “Search engine” are two of the most halting words known to investors. As a prominent VC emailed us, “a direct assault on Google doesn’t strike me as the right approach,” but Haytham doesn’t know any better than to pursue his passion for creating a better Google. He is using the prize money to purchase more servers, since the two desktop computers at his home are limiting his ability to index more of the web.

Dr. Hossam Fahmy is the co-founder and CTO of SilMinds, which has created the only decimal hardware financial accelerator card available in the market. He is a Stanford PhD, a professor at Cairo University, and he helped formulate the IEEE standard for floating point arithmetic. By shifting number processing from general software to specialized hardware, SilMind’s card increases server performance for certain financial service applications as much as 5X.

As an emerging market, Egypt doesn’t suffer from the irrational behavior seeping into the U.S. Internet market (unproven ad technologies raising $30mm, local discount services selling $20 gift cards for $10, etc). Instead, the start-up community in Egypt reminds us of the U.S. Internet market circa 1995, when it was tough to raise capital and when there was less glamour in being a technology entrepreneur; as opposed to the U.S. where Facebook raised $1b at a $50b valuation and “The Social Network” is poised to win an Oscar.

Some investors, sensing that the U.S. Internet equity is “priced to perfection,” are turning their sights towards emerging markets like Egypt. Usually, they look for foreign applications of successful domestic business models, like who is the “Facebook of Africa” or the “Groupon of Indonesia”? Many entrepreneurs (including freshly minted MBA grads returning to their native lands) are quick to adopt this strategy. About half of the start-ups that we saw in Cairo were localized versions of successful U.S. models.

The impressionability of these emerging market startups raises important questions. Although there may be a clear opportunity for the “Zynga of the Middle East” to get acquired in the near term by its namesake, one cannot build a sustainable business based on somebody else’s vision. Will those entrepreneurs who define themselves based on our business models look back at us, years from now, as startup imperialists? If so, will they shut us out from participating in their own economic transformations, just as they begin to scale? One need not look any further than China or Russia for cautionary tales of markets closing down to foreign investors at the most inopportune times.

There are a variety of reasons why Egypt could fail in its attempt to become a start-up mecca: poverty, political instability, poor education, lack of rule of law, difficulty to raise capital and cultural norms that do not embrace risk. For example, it takes two days to form a new company in Egypt, but takes two years to dissolve one, which is problematic because without bankruptcy reform, it is impossible for entrepreneurs to “fail fast” and move on to their next venture.

Despite these risks, there are a number of advantages that Egypt has in its favor: innovation is real, valuations are reasonable, engineering talent is available, real estate is cheap, and the government is motivated to help foster entrepreneurial success stories as a means of inspiring its disaffected youth. Egypt represents a market of more than 80mm people, and is the gateway to the broader MENA market of 320mm people (larger than US, Brazil or Russia). The region’s growth rates of mobile penetration and Internet usage are among the highest in the world.

In recent months, a few venture funds have started to finance these early stage opportunities: Arif Naqvi, founder of Abraaj Capital, the largest private equity firm in the region, recently announced multi-hundred million dollar funds dedicated to early and mid-cap technology companies in the Middle East; Ahmed Alfi, after two decades of successful investing in the United States, returned home to Cairo to form Sawari Ventures, complete with a SoMa style incubator housed in a classic 1940s building on the Nile.

Is it time to invest in Egyptian startups, or will the current political and social instability inhibit exits and investment returns? Who knows if companies like kngine and SilMinds will ever exhibit the same power in Egypt that Google and Intel exhibit in the US–what matters now is that there are Egyptian entrepreneurs with the drive and skill sets necessary to compete in global technology markets. With the Egyptian government’s support, and the organic growth of the population and its technology adoption, we believe that a framework is now in place for Egypt and the broader MENA region to emerge as an important market for early stage investment.

Seth Goldstein @seth is a San Francisco based angel investor and start-up entrepreneur. Christopher M. Schroeder is a Washington, D.C.- and New York-based angel investor and CEO of the online health start-up healthcentral.com.

Google hasn’t even acknowledged the purchase yet–AppJet announced it on its blog–but when it does, I don’t expect to see a purchase price. AppJet, which hatched out of the Y Combinator incubator a couple years ago, has raised a reported $700,000 in angel funding, which means that whatever price Google (GOOG) paid won’t be material enough to require a disclosure.

AppJet says it will be working on Google’s Wave platform/product/whatever it is, which so far seems to be popular in concept but baffling in execution. Just below is an AppJet-produced video explaining its EtherPad word processing program, which allows for real-time collaboration.

[Aaron Iba photo via AppJet investor Seth Goldstein]

This morning, I am interviewing Steve Wadsworth, who helms Walt Disney’s (DIS) Internet businesses.

And after sating myself with as much Club Penguin info as possible, I will be sitting rapt in the front row, as folks like Yahoo’s (YHOO) Jeff Weiner, Bebo’s Joanna Shields and AOL’s (TWX) Ron Grant talk about how social media is going to finally make money.

BoomTown is on a vision quest to answer that question in the coming year, so we are kicking entrepreneurs and taking names!

Here’s a short video I did on the opening night, including talking to paidContent’s Staci Kramer and Seth Goldstein of Social Media.

But, first, it starts with a tour of my temporary L.A. abode at the home of Mahalo’s Jason Calacanis:

As the start-up describes itself, SocialMedia “is the leading provider of social-platform services. It fuses together three core features–management, marketing and monetization–into a comprehensive package that advertisers and developers can use to grow awareness, and grow their applications on social platforms.”

Translation: It sells the picks and axes and maps and other needed stuff to the widgeteers of this particular digital gold rush around the hyped social-networking space.

And you know who always makes most of the money in a gold rush? The seller of picks and axes and maps, that’s who!

And, in fact, SocialMedia is profitable, by selling its services to help third-party developers on social networks like Facebook. That includes conducting detailed analytics of the activity of widgets and forming an ad network on the space, based on data collected.

While powerhouse companies like Google have recently talked about the difficulty of making money from social networking, Goldstein, a longtime entrepreneur, thinks the market can better be cracked by new companies like his that understand the new medium.

He’s gotten $3.5 million in backing to do that from savvy investors, like former AOLer Jim Bankoff, entrepreneurs Ted Barnett and Marc Andreessen, as well as VC outfits like Charles River Ventures.

I make a lot of fun of widgets–more to come soon!–but I think Goldstein is a very sharp operator and brings much -needed seriousness and business acumen to a very juvenile market. As in: Adult supervision.

Here’s my visit to SocialMedia and interview with Goldstein (who, by the way, is married to another Web exec, Tina Sharkey, who heads BabyCenter and whom we video-visited here):

Why? Apparently because inane is the goal! Well then, I guess: Mission accomplished!

At an appearance at the Web 2.0 Summit yesterday, a group on a panel called “Facebook as a Platform,” led by Dave McClure, talked about a lot of stuff.

But it seemed to get lively when the discussion turned to my comparison of the boom in third party apps on Facebook to the arrival in my home of a box of shiny plastic toys from China.

I was at home with my own actual 2-year-old playing a rousing game of hit-mama-with-the-foam-finger- and-crack-up-hysterically, when the group–which included Seth Goldstein of SocialMedia, Ali Partovi of iLike, Keith Rabois of Slide and Lance Tokuda of RockYou–declared me humorless.

All because I did not realize that these apps were meant to be silly and more fun than a barrel of monkeys.

Actually, I did know that and, by the way, monkeys are much more fun.

Here was my initial argument:

But, so far, as popular as those apps have become, what [Facebook founder Mark] Zuckerberg and the widget-makers have wrought is mostly silly, useless and time-wasting and the kazillion users of these widgets are pretty much just acting like little children.

“I never thought I would call the often frivolous AOL back in the day–very simply, a Neanderthal version of Facebook–a mature offering in comparison.

“While I will admit when I am not chewing nails that a lot of these apps are somewhat fun, I can’t help but ask myself that lyric from the old Peggy Lee classic: ‘Is that all there is?’

“And if that is all there is, can Facebook really build a viable and long-lasting business on what is essentially a bunch of games that will ultimately become wearying for users? Doesn’t it need more robust apps that actually are useful and relevant and make Facebook the service that Zuckerberg has often told me was a ‘utility’?

“While Facebook–with a cleaner and more strict look and a better navigation–is surely less goofy than rival MySpace for anyone over 12 years old, and its video, photo and email features are nice, the vast majority of its apps are still mostly as dumb as a box of hammers.”

“Kara’s argument is ridiculous,” said Slide’s Rabois, according to a report on Wired.com.

“Why do people watch movies and TV? Because they’re bored or looking for something to do to relieve stress in their lives. Apps are providing entertainment to users.”

Really, Keith? I had no idea, despite the fact that “Gilligan’s Island” was my favorite show for way too many years!

Seriously, I know what he is saying and I agree on the need for some fun on this tragic little spinning globe of ours, except:

1. I would be fine with silly widgets, if there were more serious ones too, well beyond Vampires and SuperPokes and even an app called Pop Ur Zit. All of these have the longevity of a gnat, designed to be faddish and quickly forgotten. And, if you are going to be fun, one might try a little harder to come up with some offerings that are a little less disposable.

In fact, on a recent visit I made to RockYou HQ (post coming Monday), its savvy tech lead noted that there was surely a limit to how much crap people wanted to throw at each other.

2. Entertainment, especially the idiotic kind, will not get you to massive sustained usage that characterizes a true paradigm shift that McClure claimed was happening.

For example, was it all the games that made the personal computer become a ubiquitous device? No, it was serious programs like VisiCalc and Lotus 1-2-3.

So where are those kind of apps for systems like Facebook, I wonder, as I noted in another post about what to do with a group of 2,500 techies I have gathered on the social-networking site. So far, we have a whole lot of nothing to offer them.

3. Another argument made on the panel was that the blogosphere used to be disdained as goofy only a few years ago and now it is a true media power.

Well, it was never disdained by me and, actually, there were a lot of substantive and important blogs even back then to balance out the fluffier ones. In fact, there were more.

4. As RockYou’s Tokuda said, referring to me: “I believe for her the apps are useless because she’s not a teenage girl.”

This is not a news flash, although I probably am one of the older diehard fans of “Hannah Montana.”

But it is not necessarily true that advertisers will flock to these widgets, just because the kids love it.

Because as much as advertisers want to reach a younger demographic, they also do not want to do it in an environment of frivolous engagement and I doubt there is much appeal to them when people are busy slapping each other digitally or cartoonifying their friends. In addition, advertisers want to reach people who will buy things and few are in that mindset when they are anonymously telling someone else the “honest” truth or being a Human Pet.

I could go on, but will stop there, so the Lollipop Guild can respond in crayon.

But here’s one offer I will take RockYou’s Tokuda up on: A promise he made onstage to build something just for me.

Just some guidance, Lance: No poking, slapping, tickling or zit-picking.

Call me old-fashioned, because I know you will anyway.