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CyberBucks—Ex-Websense CEO launches new venture

Applications for Funding Double at Software Council’s Conference

Phil Trubey gets his thrills from starting new companies.

The former founder and CEO of Websense is now president of Merchandising Avenue Inc., a San Diego online merchandising provider.

Launched last September, the company selects products to be advertised on Web sites or portals that are relevant to those sites, thus increasing their viewing, and theoretically, sales of the products.

“What we do is ‘context merchandising,'” said Trubey, who led the firm’s first round of angel investment in December. “We leverage the E-commerce infrastructure of all E-merchants, and also leverage the distribution of all content sites.”

Earlier this month, Trubey’s new venture was among a group of 18 start-ups that gave short, eight-minute presentations at the San Diego Software and Internet Council’s investment conference.

The audience of 350 interested folks included VC angels, investors, entrepreneurs and other Internet execs , the type of crowd capital-hungry new businesses would sell their souls to make their pitches. The council got inquiries from 125 such firms before narrowing the field to 18.

To be fair, Trubey’s track record could open lots of doors. He helped build Websense, which provides an Internet screening system that stops employees from visiting certain types of Web sites. When he sold the enterprise last year, it was doing about $10 million in sales.

Today, the publicly traded company (Nasdaq: WBSN) has a market cap of more than $400 million and about 200 employees.

Despite an understandable reluctance on the part of many investors to touch anything connected to the Internet, Merchandising Avenue attracted $5 million from a group of about a dozen private investors and two local VC firms. Half the funds came from Timeline Ventures, while the rest came from the angels and Aztec Venture Network.

For Trubey, there’s a juice associated with building a new business that cannot be beat.

“It’s a little like the Wild West,” he said. “It’s an intellectual exercise to figure it out. There’s a process you go through with your team, and through that you build a esprit de corps. It’s the most challenging thing that I know to do.”

Trubey’s team at the moment consists of 42 employees who work in Sorrento Mesa. Merchandising Avenue has only two client sites in beta testing at the moment, but by next year, Trubey said he’s hoping to have more than 70, and revenues of about $7 million.

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The Other 17: The investment conference’s other presenting firms were: InterKnowlogy, LLC; Akonix; Bexel Technologies Inc.; Stone Analytics, Inc.; HaERT Technologies; reelTuna Inc.; Advanced Brain Monitoring Inc.; Dashbit Inc.; TargetSafety.com; DailyToast.com Inc.; Caimis, Inc.; Deal Management Systems Inc.; I-Witness Inc.; Streamload.com; Your Best Shape.com Inc.; Noemix Inc.; and STC Networks, Inc.

The number of applications for this year’s conference were more than double what were received last year, and are an indication of the region’s continued success as a high-tech launching pad, said Bob Slapin, executive director for the Software and Internet Council.

Wireless Facilities Acquisition: Wireless Facilities Inc. (Nasdaq: WFII), has agreed to buy Telia Contracting AB, a network management consulting subsidiary of Swedish telecommunications giant Telia AB, for $7.8 million in cash.

This purchase follows WFI’s earlier acquisition of a United Kingdom-based consulting firm and intended to broaden WFI’s post deployment services globally, the company said.

Telia Contracting, with some 80 employees, has some 20 projects around the world and concentrated in Asia, Scandinavia and Europe and South America.

WFI designs, deploys and manages wireless networks for large cellular, PCS and broadband wireless carriers and equipment suppliers. Headquartered in San Diego, the firm went public last November and has more than 1,400 employees including some 150 locally.

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Entrada Sells Operation: San Diego-based Entrada Networks Inc., a firm specializing in the development of storage area networks, said in a recent SEC filing it will sell off its frame relay business that was part of Sync Research, the Irvine company it acquired in August.

According to the filing, Entrada reserved $5 million for charges associated with write-downs on fixed assets and lease terminations on the business. In addition, the company put aside $1.2 million for employee related costs, and another $4.2 million in non-cash charges for goodwill related to its acquisition.

Entrada said it had $13.6 million in cash and equivalents at Sept. 30, sufficient liquidity to fund its operations for the next 12 months.

Ameranth Gets $5 Million: Ameranth Technology Systems Inc., a San Diego-based wireless systems software developer for the restaurant industry, said it obtained a $5 million investment from Springboard Capital, a Laguna Beach VC.

The latest funding will enable the firm to bring its product, now in beta testing to market, faster, said CEO W.J. Kitchen.

Called the 21st Century Restaurant, Ameranth’s product allows food servers to remotely access the restaurant’s point of sale system using a wireless computer. By cutting down on time both in making orders, tending to customers, and paying checks, the system would allow restaurants to turn their tables faster.

The latest investment follows on a May investment of $2.5 million by Microsoft Corp., which is providing its PocketPC platform to run its software.

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Motiva Closes: Motiva Software Corp., a privately held San Diego software maker that attracted more than $20 million in VC capital investment, closed, but left no forwarding address.

A recorded voice message on the company’s phone number last week said effective Oct. 13, “Motiva has ceased operation.”

The company was founded in 1995, and had some 90 employees, according to a report by LocalBusiness.com.

SVI Terminates Merger Plan: SVI, a San Diego-based software maker with products geared to the retail and training markets, said it has halted discussions on merging its operations with that of its majority owner, Softline Limited, a South African-based software maker geared to accounting and payroll.

Barry Schechter, CEO of SVI, said because of the inherent complexities of the combination and government regulatory challenges, the proposed merger is not in the best interest of each company.

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AMCC Sees Net Income Rise: Applied Micro Circuits Corp. reported net income for its last quarter ended Sept. 30 of $23.6 million, compared to $9 million in net income reported for the like quarter a year earlier.

Net income for the six months ended Sept. 30 was $27 million, compared to the $15.9 million for the first half of its prior fiscal year.

Net revenues for the quarter were $97 million, up from $37.9 million in the prior fiscal year’s quarter, while six months revenues were $171.2 million compared to $69.5 million for the first half of the prior fiscal year.

The silicon chip maker for optical networks said it will conduct a two-for-one stock split.

AMCC’s stock, one of the stellar performers in a battered Nasdaq market and traded between $27 and $219.50 over the past 52 weeks, was traded above $175 on Oct. 18.

Send tech-related finance items to mallen @sdbj.com.


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