Building B, a Silicon Valley media start-up, has emerged from more than two years in stealth mode to announce a new “TV 2.0″ business model.

But for all its talk of innovation, its Sezmi service is most likely to win consumer support as a cheaper alternative to satellite and cable TV providers.

Sezmi aims to offer TV channels at low-cost by using existing infrastructure. Its set-top box will tap a broadband internet connection and the spare capacity of terrestrial broadcasters to download programming to its hard-drive, while a sophisticated indoor aerial will enable live over-the-air digital channels to be seen.

Sezmi will therefore partner with terrestrial broadcasters and internet service providers (for a graphic explanation of how it is supposed to work see this diagram from the local San Jose Mercury News).

The company seeks to make a virtue out of this hybrid model with the TV 2.0 label. This means presenting personalised programme lists for each member of a family , allowing them to choose to watch what they want, when they want, including internet-based video.

A commercial launch is touted in several major US markets later this year, but Sezmi has to convince consumers this is the future and faces an uphill battle against the incumbents.

Its biggest weapon will be price, but there is no word as yet on what it plans to charge.

Building B has attracted some big industry names. Phil Wiser, its president, is Sony’s former chief technology officer in the US, while Andy Lack, Sony BMG Music Entertainment chairman, is on the board

Morgenthaler Ventures, OmniCapital, Index Ventures and private investors took part in a $17.5m financing round last August.

Bob Pavey, a Morgenthaler partner, said breathlessly at the time: “I am as excited about Building B as I was about Apple when I first invested in them.”

What happens to all those logo-festooned tote bags, pens and other pieces of corporate schwag that get handed out ad-nauseam on the convention circuit? Sure, some of it eventually goes on to serve some useful purpose. But much of it goes straight into the bin.

Enter the Schwaggin’ Wagon. Born just ten days ago over lunch in LA, the Schwaggin’ Wagon has cut a high profile at this year’s Web 2.0 expo.

“I was having lunch at a Thai restaurant and I brought up the fact that there is a lot of waste in this schwag game,” says Michael Liskin, an LA-based social media consultant who is one of the group’s six founders.

Schwaggin’ Wagon’s mission is to raise awareness about wasteful schwag practices and, eventually, to find a better use for the mountains of conference bric-a-brac that would otherwise end up in landfills.

In just ten days, the Schwaggin’ Wagon crew has built a website, procured a van, and attracted more than 150 followers on Facebook. They plan to collect schwag from conference-goers and donate it to Innerkids, an LA non-profit that hosts after-school programmes local youth. 

Eventually, the group hopes to act as a bridge between conference producers and a number of charities who can distribute things like leftover t-shirts and pens to people who really need them. 

It is still early days, but judging by the reaction among conference-goers, Schwaggin’ Wagon has struck a nerve. Several Web 2.0 companies have lent their support to the project and organisers are looking for more sponsors.

Mr Liskin stresses that the group’s goal is not out to eliminate schwag altogether -  a potentially Sisyphean task. Rather, it is to make everyone involved think twice about what happens to their wares once the party ends.  “It’s not about putting anyone out of business in any way,” he says. “It’s about streamlining and giving it more thought.”

Zap-pow! Web 2.0 and user-generated content have hit comic strips.

Bitstrips made waves at South by Southwest last month with its launch of a cartoon-building website that makes creating your own strip easy.

Now the internet-savvy Scott Adams has launched Dilbert 2.0, an online version of his strip that allows readers to change the punchline.

My Dilbert, where fans will be able to rewrite the whole strip, will follow in May, along with Group Mash, which allows users to collaborate and write different panels together.

The cartoonist already allows readers to search, rank, comment on and receive RSS feeds of his strips. He aims to work with his audience by authoring random frames and seeing if groups can successfully develop strips.

It sounds like the kind of spirit and teamwork that is singularly lacking in Dilbert’s fictional world and something that Catbert, Evil Director of Human Resources, would never allow.

Flickr is the Apple of online photo-sharing with its high multimedia standards, cool interface, tools and fanatical following, but a failure to add video has been a major shortcoming of the service.

No longer. The Yahoo subsidiary finally introduced video today, but with some limitations.

Only Pro members, who pay an annual $24.95 subscription, can upload to the new service and clips are being kept to 90 seconds and 150mb in size.

Flickr says the 90-second limit is an artistic rather than a technical one.

It told its community:

“You know that Flickr is all about sharing photos that you yourself have taken. Video will be no different and so what quickly bubbled up was the idea of “long photos,” of capturing slices of life to share.”

So Flickr appears to want to remain distinctive by discouraging the kind of music video and TV-clip uploads seen on YouTube. Videos should be an extension of photos, perhaps recorded on the same camera, considering that so many digital cameras now have a movie feature.

The new service is completely integrated and looks as cool as the photo one - it has already attracted its first meme, Fridgets.

It has been a week of regulatory decisions on internet privacy issues.

The UK’s Office of the Information Commissioner has given the go-ahead for Phorm, the targeted advertising company to start trials with BT. While the ICO statement of this is not exactly a ringing endorsement of the service, it doesn’t raise any insurmountable concerns. Phorm is still under close scrutiny, but for now, allowed to go ahead.

At the same time, the Article 29 Working Party has finally published its opinion on data protection issues related to search engines, going much further than some observers expected. Search engines are to be required to delete search logs after only six months compared with 18 currently for Google and 13 for Microsoft and Yahoo.

There is still much puzzling over the exact interpretation of the dense document, but under some of the strictest readings it suggests that even the search terms you type into a search engine are personal information and should not be used without your permission for other purposes. In other words, they shouldn’t be used to send you targeted ads, an interpretation that would entirely undermine Google’s business model.

It seems unlikely that the rules will be taken to this extreme, but it is clear there is a clash coming between Google and the European regulators on the recommendations. Google maintains it needs server logs for 18 months – some European regulators say even 6 months are too much. After a year and a half of talking, neither side has convinced the other. It doesn’t bode well for finding a compromise from here.

The Phorm and Google cases show that regulators have fallen out of sync with public opinion on these matters. For internet users, Phorm is the easier to hate, because noone really likes advertising. Google, on the other hand, provides a useful service and is forgiven for much.

The regulators, however, appear to see Google as the more problematic of the two. It is OK to target people with ads as long as it is done anonymously, without identifying people. What is not OK is having a lot of personal details sitting on company servers, however unobtrusively they may have been collected and used.

Any company hoping to launch targeted advertising services should be watching the fate of UK start-up Phorm with great interest. In particular, they should take note of what this says about the public’s double standards on privacy.

Phorm is trying to build a new ad platform, serving ads targeted around users’ internet habits and interests. It is hoping to make this acceptable to the general public with reassurances that no personally identifiable information is kept or stored as part of the process.

According to Phorm, the system will know it is serving an ad to a 30-35 year old male looking for a new car insurance deal. It will not know who you are, however.  You are just a random number. It will not even keep your IP address.

Phorm has consulted with every possible stakeholder to assure people the system is privacy-friendly - like the UK Home Office and the UK Information Commissioner - and it has had its privacy system audited by Ernst & Young and 80/20 Thinking, a privacy consultancy. It is inviting anyone with an interest to do their own inspection.

But none of this has really helped with public perception. There has been a blogosphere furore, and Phorm has been branded a spyware company in the press. A UK think tank this week sent an open letter to the Information Commissioner’s office, asserting that Phorm was possibly illegal.

As was seen in Facebook’s Beacon experiment, people are strongly against the idea of targeted advertising. Given any choice in the matter, it seems, they will campaign hard against it.

The attitude is, however, inconsistent with our tolerance for all kinds of other, less overt data collection and targeting. Where people are not explicitly told about targeting they are generally too lazy to protest.

Every Google search is stored for 18 months, complete with IP address and cookie information from a personal computer. There is much more of a profile kept on Google’s servers than on Phorm, yet, even after the issue was raised a year and a half ago by European privacy regulators as a problem, users have not abandoned the search engine in droves. It appears to be too convenient to boycott.

Millions of us carry store loyalty cards that allow supermarkets to closely profile our shopping habits. This is linked to our name and address – but that doesn’t bother any more than a handful of people.

In fact, we hand over our personal information constantly to any number of companies, from signing end-user licensing agreements to use software, to filling in forms to extend warranties on our household goods.

The companies to which we give this data use it for their own targeting – and are notoriously bad at protecting it. Several recent studies have shown that only a minority of companies have adequate data safeguards. Many don’t even know what data they have in their files and couldn’t say if any of it had leaked or been hacked. Big data losses such as the TJX incident are just the tip of the iceberg.

This is not causing major uproar.  However, if a company declares its intention to target us, albeit in as secure a way as possible, we feel outrage. Phorm is in danger of becoming a scapegoat for a general frustration about an information society we no longer feel in control of.

It is a shame, because the company was at least trying to move privacy technology forward to some extent. It may not have gone far enough, but it is a start. Stamping the business out before it has even started will not stop attempts to target advertising, but may simply drive it underground. The lesson from all this seems to be:  if you want to target, just don’t tell anyone you are doing it. They probably won’t notice.

You’ve probably heard of Guitar Hero, the best selling game from Activision that puts a guitar-shaped peripheral in gamers’ hands and lets them play along to well known rock songs.

Guitar Hero has surpassed $1bn in retail sales in North America, sold 16m units worldwide, enlivened countless parties and prompted Guitar Hero nights comparable to karaoke ones in clubs and bars across America.

However, you’ve probably never heard of Patent Number 5,990,405 filed by the Gibson Guitar Corporation in 1999 for a “system and method for generating and controlling a simulated musical concert experience.”

The patent document describes it as a virtual-reality device where a guitar player could wear a head-mounted 3D display equipped with speakers and be given the simulated experience of playing a real concert with other musicians. It envisages the invention as a source of entertainment for professional and amateur musicians or as an aid for guitar makers in selling their products by allowing prospective buyers to recreate a concert atmosphere.

The system does not seem to have made much progress. I could find no mention of it among the current product listings on Gibson’s website and the company’s spokeswoman was travelling and unavailable for comment today.

But Gibson wrote to Activision in January alleging that Guitar Hero simulates a musical concert experience in a similar way to the device in the patent. It said it should obtain a licence for the patent or stop selling all versions of Guitar Hero and its peripherals.

In response, Activision filed a complaint in a Los Angeles court this week seeking a judgement that it has not infringed the patent.

The background is that Activision’s RedOctane subsidiary, publisher of Guitar Hero, signed an agreement with Gibson in 2005 to feature several of its famous models, such as its SG and Les Paul guitars, in the game and as peripherals.

They have featured in Guitar Hero I, II and III, but no agreement has been reached for any further titles.

Activision’s senior litigation counsel, Mary Tuck, wrote to Gibson this week saying it “knew about the Guitar Hero games for nearly three years, but did not raise its patent until it became clear that Activision was not interesting [sic] in renewing the License and Marketing Support Agreement.”

She said this suggested Gibson was not acting in good faith.

Gibson has yet to respond but, with millions in future licence fees at stake, a heavy legal riff of its own seems likely.

The investors in San Francisco start-up Zivity would prefer to think they are funding the next wave of social networking rather than an online peepshow.

Zivity, which serves up photo-shoots of scantily clad and tastefully nude women for subscribers paying $10 a month, is announcing its second-round funding today and has raised $7m from some prominent venture capitalists.

Founders Fund and BlueRun Ventures are providing the financing for the company founded by Scott Banister and his wife Cyan.

The connection is the online payment service, PayPal, bought by eBay for $1.5bn in 2002. Founders Fund founder Peter Thiel was chief executive, John Malloy sat on PayPal’s board before he co-founded BlueRun and Scott Banister was also a director. Mr Thiel was also an early investor in Facebook and both have invested in Slide, which provides popular social-networking widgets.

“The fundamental investment is in people who can make the seemingly impossible possible and the unlikely likely. We’ve worked together on other things and Scott is someone who has done great things a few times over and he is still a young guy,” says Mr Malloy.

The 32-year-old is a serial entrepreneur and co-founded IronPort, an email security company that Cisco bought for $830m last year.

Mr Banister draws parallels with Zivity – IronPort aimed to challenge the dominance of Sendmail in email, Zivity aims to challenge the dominant advertising model for social networking.

“The subscription model is coming and we are interested in having great content and paying the people that create that content,” he says.

Subscribers to Zivity, which is still in invite-only mode, get their own profile page where they can add their details, friends and status updates, but the focus is really on the models and photographers, with members allowed five votes a month to give to their favourites.

Mr Banister says it is giving an unprecedented 40 per cent of its subscription revenues to the content creators, divided according to how many votes they get. His own wife Cyan, as well as being Chief Strategy Officer, is also one of the topless models eligible for the profit sharing.

“You see stars like Lindsay Lohan appearing nude [as Marilyn Monroe] in New York magazine and getting paid for it, but in this era of self-publishing, women do it on MySpace and see their photos taken down by the MySpace abuse department,” he says.

“There’s a big gap we can bridge here, the models and photographers are really excited.”

Despite soft-porn photos being available in abundance on the internet for free, Mr Banister feels Zivity can still create sufficient interest to be a profitable business.

“We’ve close to 30,000 people on our waiting list to get in, the reaction has been incredible,” he says.

“We’re creating something here that is just not available on other social networking sites and we’re providing an outlet for models and photographers that they’ve never had before.”

A bit like Victor Kiam and his Remington shaver, some bloggers liked the Seesmic video product they tested so much that they decided to buy the company.

Well, almost: a long list of industry “names” has been announced as investors in Loic Le Meur’s hot San Francisco start-up.

They include well-known bloggers Michael Arrington of Techcrunch, Dan Gilmor, Steve Garfield, a video blogger, and Jeff Pulver.

Also investing are Atomico, the investment group of Skype founders Niklas Zennstrom and Janus Friis, Steve Case, co-founder of AOL, Ron Conway, an early Google investor and Reid Hoffman, LinkedIn founder, among others.

This first round of funding is worth $6m. Seesmic allows users to make videos of their thoughts as easily as adding a comment to a blog post.

It is still in closed alpha, but Mr Le Meur’s clever cultivation of well-known bloggers as testers has garnered Seesmic influential support, plenty of publicity and now, loads of money.

Palm Desert, California: Online video creation, distribution and analytics are becoming more sophisticated as the industry matures. A number of companies focused on video are launching products here at DEMO 08. The highlights:

Xtranormal, based in Montreal, Canada, introduced "movie-making in a box". It can turn an IM-like chat into a movie, attaching the text to a 3D avatar and using emoticon-type animation icons in the text to add movements. It’s an intuitive interface that should be easy enough for children to construct school projects and adults to make their own chat shows, business presentations or animated blogs. Users can add their own mugshots to the avatar to make it more realistic and their animation can take place in a range of sets. Xtranormal will likely sell additional packs of props and sets. The finished result can easily be published to a blog or social networking site. Xtranormal plans to launch in April.

BitGravity launched BG LiveBroadcast, a Flash-based video streaming service. It showed video in high-definition quality and switched between sources in the rapid channel-hopping style of regular television.  There were also digital video recorder features - skipping back and forward. Perry Wu, chief executive, said the service was designed for live broadcasting. "The only thing traditional TV was better at was live broadcasts, today that’s all about to change," he said. To demonstrate its technology, BitGravity has been streaming the DEMO conference itself.

TubeMogul showed off how it could deploy video to different services such as YouTube, Metacafe and MySpace, saving content creators the bother of encoding for the different services and allowing them to instantly reach a larger aggregate audience. For anyone uploading less than 150 videos a month, the service is free. TubeMogul is also able to provide detailed analytics on where the video is being most watched and a breakdown of the demographics of the audience.

Visible Measures can give creators information on how viral their video is and how much it engages its audience. It demonstrated how the well known World of Warcraft Toyota ad lost 20 per of its audience online before the truck actually appeared. It has just acquired Vidmeter, a viral video ratings and distribution service. The Boston-based start-up has also announced $13.5m in second-round funding at DEMO.