RSS lures venture capital dollars

A group of investors aims to raise $100 million to bolster start-ups and others developing RSS technologies.

Elinor Mills Former Staff Writer
Elinor Mills covers Internet security and privacy. She joined CNET News in 2005 after working as a foreign correspondent for Reuters in Portugal and writing for The Industry Standard, the IDG News Service and the Associated Press.
Elinor Mills
3 min read
A group of investors has created a venture capital fund to raise $100 million to fund start-ups and others developing technology based on the RSS Web publishing format.

RSS Investors, based in Cambridge, Mass., was formed last week to target the relatively new but fast-growing technology, with particular areas of interest being news aggregation, blogs, new classes of search engines and data aggregation in the financial and medical industries.

RSS, or Really Simple Syndication, allows people to subscribe to news alerts, blog posts and other online information that is then automatically forwarded to their computers, phones and handheld devices.

The technology, which is quickly becoming mainstream, enables anyone to become a global online publisher and is changing the way people get information off the Web, said Jim Moore, a founding partner at RSS Investors.

The fund has already raised $20 million through an alliance with partners at Ritchie Capital Management, Tom Crowley and Steve Smith. In addition to Moore, other partners in RSS Investors are John Palfrey of the Berkman Center for Internet & Society at Harvard Law School and venture capitalist Richard Fishman.

"There is a shift in the paradigm on the Web, and it's a shift to scripting solutions based on very high-performance Web services that are public or semipublic, that essentially become public network services," Moore said.

RSS got a huge boost when Microsoft announced late last month that its next-generation Windows platform, code-named Longhorn, will include support for RSS technology.

Also, Google, Yahoo and others have said they will be working with advertisers to market on RSS streams.

"There is a new wave or level of innovation" with RSS, Moore said. "New online companies will be born out of this, as well as existing ones will be transformed."

Moore said he could not comment on specific companies the group is interested in or talking to. However, he said he is personally impressed with UpToDate, a medical network for doctors to share information, and OhMyNews, a Korean Web site that distributes news written by citizens and professional journalists.

"That is an example of taking these technologies that allow you to build low-cost platforms for shared work and shared communication, and putting together new kinds of media companies that are hybrids of professional journalists and citizen journalists," he said.

Bloggers had varied reactions to the venture.

"This reminds me of years ago when Kleiner Perkins launched a $100 million Java fund in 1996," Tom Foremski wrote in his SiliconValleyWatcher blog. "It is a milestone for RSS and its use."

In response to Foremski's point on the Java fund, Paul Kedrosky wrote on his Infectious Greed blog: "Precisely, and that fund was a flop. While there are oodles of Web 2.0 opportunities, they are predicated on solving real problems, not on transport protocols."

Moore suggested that RSS is a broader technology than Java and said the funding will target companies that not only advance RSS but also make money doing it.

"What we want to do is more like what Softbank did in the early 1990s in (funding) Internet technologies," he said. "We have a very broad and inclusive mission."