Privately held social network Facebook just saw its prices go higher. Digital Sky Technologies has announced it will pay $14.77 a share for an additional stake in the social network, bumping its total position in the company to up to 3.5%. If this deal is completed, it would imply a total value of $6.5 billion – down about one-third from Digital Sky's last investment in Facebook.

Even the $6.5 billion a share value is optimistic. Investors have pushed the value to below $5 billion in private secondary market transactions over the past few weeks. Nonetheless, the relatively new company is still valued well above major technology and media heavyweights, including CBS (NYSE: CBS) with a $4.06 billion market cap and SalesForce.com (NYSE: CRM) at a $4.72 billion market cap.

After the dot-com implosion, there was much talk about the death of the venture capital (VC) industry. And, while there was some pain, many firms survived. But the death may have only been delayed.

VCs need to generate substantial returns for their investors. Even though there have been some winners – such as Google (Nasdaq: GOOG) and Salesforce.com (NYSE: CRM) – there hasn't been enough activity. Simply put, the IPO market continues to deteriorate and M&A transactions are trailing off. Hey, there were only six VC-backed IPOs in 2008.

So, with thousands of VC firms in the market, it appears that the industry is poised for a Darwinian shakeout, according to the FT.

However, this doesn't mean that VC fundings will go dry. Basically, top firms will continue to do deals, but the approach will be more cautious and certain categories will get starved (such as social media and Web 2.0).

What are some hot spots? Well, according to the NY Times, the areas include web-based software, cloud computing, virtualization, open source and clean tech. Also, new companies will need to go beyond advertising revenues and expand their business models to areas like subscriptions.

Yes, as the recession continues, expect fewer free Net services.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

Credit crunch? Not so for the venture capital space. According to various surveys, there is still lots of strength.

For example, the MoneyTree Report (from PricewaterhouseCoopers and the National Venture Capital Association) shows $7.1 billion in VC investments for the third quarter. A report from Dow Jones (NYSE: DJ) VentureOne shows about $8.1 billion in fundings.

It certainly helps that there has been a pick-up in the IPO market. Oh, and the tech sector has had a nice rally. The most popular categories for VCs include software and biotech.

As for software, there has been a megatrend for on-demand offerings. As seen with the growth of companies like Salesforce.com (NYSE: CRM), VMware (NYSE: VMW) and Taleo (NASDAQ: TLEO), the enthusiasm is certainly understandable.

However, I'm not so sure about biotech. The sector has been fairly weak in terms of public offerings. But, then again, it seems biotech companies always need to raise gobs of money, right?

Something else: There's been a pick-up in cleantech deals. After all, with high energy prices, there appears to be lots of opportunity.

Visit DealProfiles.com if you want to see other recent VC fundings.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements

Human resources can be kind of boring (except when there are lawsuits). And it is often an area that is largely neglected in terms of the budget. Yet this is not stopping venture capitalists from investing in the space.

The latest funding in the space is a $22.5 million round for Authoria, which "provides talent management solutions," according to the company's website. It's the firm's fifth round. The investors include Horizon Technology Finance, Velocity Financial Group, Menlo Ventures, Austin Ventures and Van Wagoner Capital Management.

It does help that Authoria takes an on-demand approach. That is, the technology is delivered via the Web, which tends to be cheaper and easier. More importantly, it's a red-hot trend in tech, as seen with Salesforce.com Inc. (NYSE: CRM) and Taleo Corp. (NASDAQ: TLEO).

It's not clear if Authoria is profitable, but the company says that its bookings surged 40% for the first half of this year.

With a plethora of IPO filings for on-demand software – which include companies like NetSuite – we'll probably see Authoria take the same path at some point.

If you want to check out other venture capital fundings, click here.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

When Salesforce.com (NYSE: CRM) teamed up with Google, Inc. (NASDAQ: GOOG) this year, there was more in the air than just the ability of Google's AdWords program to be integrated into Salesforce.com's web-based console for customers. (At least, it was in the air for me.) After Salesforce.com posted a 42% rise in paying customers for the Q2 period last night, one has to wonder if Google has plans to move into that territory -- the lucrative corporate territory it so richly wants to invade.

Google's been on the M&A warpath over the last year, spending billions in stock and cash to acquire firms left and right. YouTube, DoubleClick (pending) and even the latest GrandCentral purchase have been just a few. Still, Google's largest revenue source is web-based advertising meant for consumer eyeballs. Would it love to take this treasure trove and extend it into the corporate buying and transaction arena? In my estimation, yes -- and Salesforce.com's target corporate market makes it a perfect partner. Google knew this when it partnered with the web-based customer relationship management company this year. My take: it wants more.

Will Google pony up billions for Salesforce.com? In terms of history, it's been around for a while and has proved itself a legit contender to installed software-based competitors like Oracle and Microsoft. There's no software at all to install, and any upgrades and changes are done behind the scenes, not with IT departments. This is the way Google operates as well -- just inside of a web browser. Is a buyout in the works behind the scenes? If Google wants to get into the "service providing" business alongside its advertising business and connect even more buyers and sellers, it very well may be.

This week, I had a chance to talk to Michael Braun, a veteran of the tech world. Back in 1981, he helped to launch the original IBM (NYSE: IBM) PC. He has also been the CEO of three Silicon Valley companies.

His latest gig is the CEO of Intacct, which develops on-demand financial management systems for small and midsize businesses. It has about 2,000 customers so far.

While on board for only five months, Braun has taken swift action. He has retained key managers and board members. Moreover, he got $14 million in a venture capital round. The investors include Sigma Partners, Sutter Hill Ventures, and Emergence Capital Partners. Emergence also invested in Salesforce.com (NYSE: CRM), which is the premier on-demand company.

"The venture round was fairly quick," said Braun. "The investors realize the big market opportunity in providing financial applications. We are allowing QuickBooks' users to graduate from entry-level accounting."

Intacct's applications have proved to be extremely sticky, with a retention rate of 99%. Says Braun, "With on-demand, we are seeing a major platform shift. If you look at the history of these kinds of changes, it's often the new players that dominate the markets. And we are also in one of the biggest categories of business software."

To see other recent venture capital fundings, click here.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.