Coursera, founded last fall by Stanford professors Daphne Koller and Andrew Ng, expands today to include non-Stanford classes and also announces $16 million in Series A funding, in a round led by Kleiner Perkins.

Coursera is adding about 30 online courses from the University of Pennsylvania, Princeton, Stanford and the University of Michigan. (More courses and universities will be added in coming months.) The courses, which cover topics from computer science and medicine to business, history and literature, aren’t just class videos — the company is not “just shoving the video on the web and hoping for the best,” Koller said. Rather, Coursera aims to recreate an on-campus experience for virtual students. Its coursers include video lectures with interactive quizzes, homework, interactive assignments and collaborative online forums.

“A professor teaching 100,000 students is almost like a new medium, like moving from papyrus to prose,” Ng told me. “For example, how often do students want to see the instructor’s face? Do they want pre-typed text or should the instructor hand-write the text? We’re still figuring it out. Multiple top universities working on a single site provides the opportunity to leverage resources, and partner institutions can learn from each other about how one ought to teach in this new space.”

“We are seeing tremendous retention on the site; when homework is due, traffic spikes,” Koller said. “If you’re changing the lives of millions of people, there will be a way to make it financially sustainable.”

Bringing more “free” to the $12 billion textbook industry

A new tool from white-label digital college bookstore site Akademos tackles another problem in higher education: Expensive textbooks. The textbook business today is run by “very powerful book publishers who can afford to have massive sales forces that go out and work individually with professors to convince them to buy textbooks,” CEO John Squires, who was previously at Time Inc. overseeing the development of magazine JV Next Issue Media, told me. “It’s not unlike the pharmaceuticals industry.” And because textbooks are so expensive, he says, “kids basically choose not to buy. They borrow or steal or they go without.”

Akademos aims to get cheaper textbooks into students’ hands by making the textbook discovery process easier for professors. The company’s Textbook Adoption Tool, launching today, lets professors access and compare textbooks across 3,600 subjects and 2 million books.

Faculty using the platform can search for the course they teach, view textbooks by school adoption and bookmark textbooks for possible later adoption. They can also sort by affordability and peer reviews. And searches pull up not just textbooks from the largest publishers but also free Open Educational Resource texts and other types of books.

For now, the textbook adoption tool is simply a free resource (and a way to draw attention back to Akademos’ white-label business), though it may eventually include e-commerce links. “The textbook industry is a $12 billion industry and faculty don’t really have any way to fairly evaluate and track high-quality content,” Squires said. “We think having some influence over that is going to be a pretty fascinating opportunity for our business.”

Photo courtesy of Flickr user beautyfromashes

Update:: Squires will be leaving the venture, a Next Issue rep told paidContent.

One of the first challenges Guenther faces is figuring out exactly what Next Issue’s business model is. Work on the business strategy has already been started by management consultant Oliver Wyman, who was hired in February. The general goal Next Issue has mapped out from the beginning was the development of ad formats and standards for e-reader devices, outside of what Apple (NSDQ: AAPL) is trying to do with its closed iAd system for mobile. Even though they celebrate the sales of digital replicas of periodicals on the iPad and iPhone, publishers have bristled at the tight control that Apple maintains over consumer data, something that magazines and newspapers were used to having.

Interestingly, the news of Guenther’s hiring comes a day after Next Issue member News Corp. acquired Skiff’s e-reading platform and IP — a purchase that did not include ownership of the actual the Skiff device. Skiff’s e-reading platform is designed to work across devices, not only on Skiff

Time Inc vet John Squires, who started gestating the idea out of the parent company last summer, was named the interim managing director, as the company looked for a permanent CEO to run it. And that’s where the problems started, sources say. With two different recruiters working on it for the last 6-7 months, they still don’t have a candidate, and burned through tons of goodwill among the potential candidates they dragged along on this hunt. One candidate told me about recruitment meetings with every board member, following which there were still meetings left with Rupert Murdoch and Jeff Bewkes, after which the candidate withdrew from the process.

Another source close to the company insists that a decision on CEO will be wrapped up by end of this month. It is likely Squires will become the permanent CEO, but the question is why didn’t they go with him in the first place? He even publicly said he wanted to be the CEO, in an interview with us at company launch announcement. Why string him along as they look for “someone better than him?” At minimum that is demeaning for him, one source close to Squires said.

Meanwhile they hired management consulting biggie Oliver Wyman to figure out the business strategy and write a business plan, which is never a good sign for a “startup”. While that generated some good presentations for MPA conferences, little else.

Then as tons of other e-readers kept coming in the market Next Issue didn’t have a product on the market, and still doesn’t. As Apple (NSDQ: AAPL) started working on iPad and started reaching out to media companies, Time Inc. along others, looked at Next Issue to provide the expertise and platform to develop for it, but when it became clear that wasn’t going to happen, each went their own way. Now, who needs a third-party company, and for what? Analytics, maybe, but that’s really where Apple and other platform/device companies are the gatekeepers. One of the stated goals of the company: develop a common digital storefront. Well, while that idea sounds grand, again, it isn’t their decision; in iPad’s case it is Apple’s decision to not let any third party sell content outside of their system, and unlikely that will change soon.

One of the other stated goals, of developing ad formats and standards for these devices, could still be a business it could run with. It is early in the game, and the ecosystem is very fragmented. Agencies are still struggling with keeping up with these platforms, and a third party company, with access to all this content, could really go creative with this, if it had the right structure.

Next Issue and Time Inc refused to comment on this story.

– Canoe Venture’s David Verklin characterized the impetus of creating a JV as an attempt to satisfy the need for something “nimble, aggressive, adaptive,” while having the support of an existing infrastructure. Verkin: “The world is littered with failed JVs. We named our company Canoe because the only way you can get the six major cable companies to work together on a coast-to-coast venture is to get into the same boat. You don’t need 100 percent unanimity, but you do want to get to the same destination.”

– Time Inc. (NYSE: TWX) EVP John Squires, now Managing Director, of mag industry JV Next Issue Media, suggested that having a strong board that is able to provide clear direction from the outset is also a key to making sure a JV works.

– Caraeff: Vevo started with Universal, but the need to have critical mass demanded that other companies sign on as well. Just like Hulu wouldn’t have worked if it just featured one network. You don’t need everyone, but you need more than one entity to attract advertisers and viewers… We embrace ubiquity for the fan, as well as scarcity for the advertiser.

– Squires: Who else would he like on Next Issue’s roster? “The New York Times.”

– Verklin: Summing up the JV ethos, he said, “If you want to go fast, go alone. If you want to go far, go with a group.”

– Verklin: Getting the engineering and technology established is a major project and it will take time. We’ve tried to keep a low profile as we grind through the technological processes.

– Greenfield: The key challenge for Hulu, because they got great consumer adoption, is what will happen if they put a full ad load? Will that kill the service? I’m sure everyone on this panel would love to be considered similar to Hulu from a consumer perspective. But how can they make money? Is it an ad model? Is it a paid model?

– Rafat puts the question of “openness” to Caraeff: We don’t put a lot of restrictions of where Vevo can be put: any digital device or console. But I can’t allow the advertising to be scraped and put on an MP3 or audio on demand service.

– Caraeff: Our goal is not to change people’s behavior and just be the one destination for music videos. A lot of people are comfortable with AOL (NYSE: AOL) or Yahoo (NSDQ: YHOO) or MTV. Vevo wants to power those places. We don’t just want them to come to Vevo.com. We’re selling all the advertising and controlling the inventory over our network, which includes AOL, CBS Radio. Greenfield: Did Warner Music Group (NYSE: WMG) make a mistake in not joining? Caraeff: Their priorities are different. I don’t think they have scale to drive major advertisers to their sites. We’re doing 30 million streams a day. No one music company can do that.

– Verklin: Do you know how we’re keeping track of viewers in Paducah, Kentucky? Nielsen diaries! That’s Neolithic. We’re not attempting to throw a grenade into the TV marketplace, but we do want set-top box data to be the main unit of measuring viewership.

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It only seems like we’ve been hearing about a digital magazine consortium for ages, according to John Squires, the interim managing director. “There’s been a lot drum roll for it but it hasn’t been been that long.” After some chatter, the effort came together over the past four months. The Time Inc. vet has been in the mix all along and is now one of the candidates for CEO of the nameless venture being announced this morning. Squires is leaving Time Inc. to serve as interim director while the CEO search is conducted. “Hopefully, I’ll be CEO,” he told paidContent during an interview.

Squires said there are no plans to take on further equity partners but they’re talking to client partners. No numbers from Squires or others involved on how much the five partners are investing. He calls it “enough to give us a good start.” He also isn’t talking about staff size, although he is hiring for a Manhattan office. A company name? That probably will wait until there’s a product.

– Other groups: Squires isn’t stressing over possible competition or complications from others, including efforts that might involve the partners. News Corp. is still working on its own consortium, for instance. “I don’t know that that’s relevant to us. We

Squires’ departure from Time Inc. has been anticipated since the summer, when Chairman and CEO Ann Moore assigned him the task of finding a digital media solution for the Time Warner (NYSE: TWX) publishing unit.

So far, Conde Nast and Hearst are expected to be part of the initial team of publishers. The new company will be charged with setting up a seamless distribution channel for digital mags across the iPhone, the BlackBerry and other digital devices, creating a standard template for advertisers and readers. The group doesn’t plan to create a single digital e-reader product; instead the publishers want to set up an iTunes-like storefront for magazine content. In addition to electronic versions of mag content, the storefront would also allow for print subscriptions and sales.

In some ways, the proposed JV sounds a little like Maghound, which Time Inc. introduced a year-and-a-half ago as a web-based subscription service including outside mag publishers like Meredith (NYSE: MDP) and Conde Nast. Maghound was initially envisioned as a “*Netflix* for magazines” in much the same way this new company has been touted as a relative to Hulu. But some Maghound publishers have given Time Inc. low marks, saying the system was slow to work out the bugs and that it has yet to achieve any real scale. As Time Inc. embarks on this latest all-inclusive system, Maghound represents something of a cautionary tale.

The plan comes out of the brainstorming John Squires has been doing at Time Inc, after he was kicked upstairs earlier in the summer at the mag giant to figure out digital for the company. The idea: for mag publishers to work to deliver content (new products or old products rehashed) onto new generation of portables like Amazon (NSDQ: AMZN) Kindle and upcoming Apple (NSDQ: AAPL) tablet. The reason for a JV? So that they can control the terms on rev split, among other things, unlike the much hated Kindle 70-30 rev split, and the perennial favorite Apple iTunes hold over the music industry. Another reason: controlling customer data, as opposed to these third-party retailers.

Update 1: I just spoke to someone involved with the project, and the source insists the project is not about rev split or consumer data, but more about trying to develop new formats and standards so that when the devices come in, the mag industry is ready.

Most of the mag website have become headline products, and if such tablets become the norm going ahead, as is the prevailing sentiment, then the mag industry needs to take advantage of the touch screen, full browser, video capability, interactivity and portability in a better way. One of the other things to be solved as part of JV: how does consumer pay once and then access it across all devices, unlike the clunky model WSJ has developed in charging for every format, including print, online, Blackberry, iPhone and Kindle.

The source confirmed that the JV is looking to bring in an equity partner and raise money for it. The independent company does have a timeline for launch with the product, but a lot depends on what kinds of devices get launched, and what kind of distribution the new mag venture gets. And my sense in speaking to the source is that the talks will be with likes of HP, Dell and others, outside of the Amazon-Apple combine, at least to begin with.

By the way, Time Inc already has a magazine industry wide effort JV going in Maghound (though owned fully by Time), which isn’t exactly burning up the charts anywhere.

Update 2: From a top exec at one of the companies planning to be part of this JV, with a healthy amount of skepticism: “I do think it

At its most basic, the memo almost sounds like Time Inc. hasn’t had a strategy. (It has, of course. Far more than one.) When I asked Squires about that during an e-mail interview, along with why this approach, he replied: “It

– Wenda Harris Millard, co-CEO, Martha Stewart Living Omnimedia: Beginning to see a softening in the ad market, a lot of unrest with consumers. “I think they’re confused about what’s going on in the financial markets. Hopefully, there will be some stability in the packaged goods marketers.” There’s been no real long term planning by marketers. Just in time buying in digital, but also in print, which is a challenge.

– John Squires, EVP, Time Inc.: “Magazines tend not to be affected much by downturns, as people tend to stay home. But we’re going to be dealing with a difficult ad market for the next year or longer. Things that have a high emotional connection, whether it’s magazines or the internet, will still retain their high value to consumers and advertisers.”

– Jack Klues, managing partner, Publicis Groupe’s ViviKi: “We’re seeing a measured response, and it varies according to channel. You’re going to see greater emphasis on the growth markets — the BRIC countries — and the more measurable media will continue to show growth. But instead of 23 percent growth, a lot of the forecasters have taken it down a bit. So now we’ll see 20 percent growth, which is still a pretty good number.”

– David Eun, VP, content partnerships, Google: YouTube will benefit from the downturn. Every minute, 13 hours of video are uploaded. “When you think about the ad question, people want to go to where the opportunities. Not only are we measurable, we’re performance-oriented too.” Burgi noted that the ad question hasn’t been completely unlocked. How does that affect *Google’s* plans? Eun: “When TV first came out, all the best practices from other media, such as radio, were applied. We’re not taking the so-called easy money. We’re no replicating the TV model. So we’re pursuing and experimenting with different kinds of ad products. These are the early days. But the opportunity is large.”

– Jessica Reif Cohen, managing director, Merrill Lynch: The Merrill Lynch view is that the first six months was a real estate recession and the last six months were a cap ex recession. “The consumer recession is just starting. We expect this to be long and deep. The stocks tell you a year before. Entertainment companies typically don’t recover until a quarter before a recession is over. Advertising is a lagging indicator as well and typically doesn’t recover until a quarter or two after a recession ends.” More after the jump.

– Broadband, mobile at risk in a downturn?: Eun says no: “People are so used to being attached to their mobile and broadband access, that even as consumers cut back, those are two areas that people can’t live without. Millard: “At a time of uncertainty, the notion of not being connected would cause panic in the streets.” Cohen: “Cable tends to recover faster. And yes, if you are staying home, if you’re unemployed, staying connected is essential. And tough economic times have shown that video penetration grows.”

– Ad revenue: Klues: “I don’t want to sound Pollyannish, but there are opportunites. People don’t change unless they have to. The paradigm that existed when I started in the business is model that is shifting. Clients have more information about their core users. We can take advantage of fragmentation — we call it personalization — and we can move away from CPM mechanics and the broad sweep that has been the traditional model. Eventually, the target will broaden and the media mix will reflect that.”

– Cable ad targeting: Cohen asked what the panel thinks of Canoe Ventures. Klues is enthusiastic, saying it fits into the new paradigm he was just talking about. Targeting, not mass, is king.