Chicago-based MyZeus is a tailor-made movie service currently in beta created by three entrepreneurs, Patrick Algrim, Matt Hooks, and Brandon Weiss. Think Pandora for movies, perhaps. We caught up with all three of them to find out more about their service, to hear their views on predictive services and their journey to where they are now.

midVentures: Tell our readers about your service and how it is unique. How does it work? What kind of information do you request from them?

MyZeus: Watching a movie has a certain cycle: you discover a movie, you watch that movie and then you share it with your friends. We’re shooting to encapsulate that entire cycle and make it easier every step of the way.

What’s particularly unique about what we’re doing is the way we’ll help you find movies to watch. We do our best to stay away from the term ‘recommendation’ because that’s an oversimplification of what we’re trying to do. We will allow you to search our database with specific tastes in mind, and will eventually make educated, user-specific suggestions based on those tastes.

We’re trying to request as little questionnaire data as possible; a significant portion of our data will come from the unique way we allow you to find movies. We believe the more you use a piece of technology, the more it should learn about you and the better it should work for you.

midVentures: When do you plan to go live?

MyZeus: We’re not setting any hard dates just yet. However, because of the complexity of what we’re building, we do plan to have a small subset of users try an early-stage release in the next month.

MyZeus: Anyone who likes to watch movies and wants to share what they’re watching with their friends. Take a look at Netflix, where most users spend more than 10-15 minutes just trying to find something they actually want to watch, and then it might not even be available for streaming. If finding movies on Netflix or any other sources is too difficult for you, then MyZeus is perfect for you.

MyZeus: Our standpoint on predictive social services is fairly scientific. Through algorithmic engineering, larger-scale services such as Facebook have been able to determine a specific user’s preference or intended interaction to the utmost of perfection. In fact, users don’t even realize their interactions have an impact on their future usage. We strive for these types of ideals, where we cultivate a source of human-computer interaction that feels effortless. Over time we believe more services will begin to implement these types of intelligences and the accuracy of the formulas for which the algorithms are created will contribute to the overall success of the technology.

MyZeus: It started off as a much smaller idea, but as we were working on it we realized it could be so much more. So we just changed it up mid-stream. It turned into a longer journey, but in a good way. We don’t have as many resources in Chicago as San Francisco or New York, so we’ve had to develop the product over a longer period of time because it’s [for now] on a part-time basis. But our location is just a minor roadblock—no one is going to stop us from crushing through them.

MyZeus: We’ve all worked on products in all different stages. From idea to concept and and from launch to mid-product. We’ve seen the mistakes people make by not taking chances. We may fall flat on our faces, but at least we went big and tried to solve a challenge others were too scared to tackle.

MyZeus: The Midwest seems to largely shy away from challenging or risky ideas. Venture Capital in the Midwest is kind of a misnomer, because most investors here are seemingly looking for little to no risk. Most investments and resources go towards products that have a directly apparent return on investment. But the riskier products are often the most interesting, so the best people naturally gravitate towards places where riskier products flourish, like Silicon Valley. But we wouldn’t say that these challenges have hindered our progress. It’s definitely had an impact, but we’re going to make this happen no matter what.

Grooveshark is an odd service. If you don’t know, Grooveshark lets you play music for free by allowing users to upload songs which it then streams to listeners. Alarm bells should be ringing if you know anything at all about the world of online music. What gives? How is Grooveshark still online and growing?

Under no current litigation that puts its future in doubt, Grooveshark was even named by TIME.com as one of the Top 50 websites for 2010. Not only that, but Men’s Health said this month that they were better than Pandora.

Grooveshark has even expanded to offer free college courses to intermediate programmers at Grooveshark University in their local Gainesville. Using the Santa Fe College’s Center for Innovation and Economic Development (CIED) as the campus, they aim to “teach students about cutting-edge technology used by Grooveshark, including HTML5 web standards, Python programming language, and mobile application development for platforms like Android,” according to Santa Fe College News.

Grooveshark claims their revenue comes from a premier service called ‘Grooveshark VIP,’ advertisements, and artist promotions on the site.  But even still, how are they paying the artists? With deals with more than 1,000 musicians, publishers and labels, they lack deals with 1,000′s of others. Wikipedia rates the service as streaming a quarter billion songs a month. One could conclude that if the company did start paying for each and every stream it would be quickly bankrupt.

According to their blog on December 26th, they launched a copyright management page where they include a web-based DMCA takedown tool. They say:

It is our policy to honor all takedown requests that comply with the requirements of the Digital Millennium Copyright Act (DMCA) and other applicable intellectual property laws.

We strongly suggest that you contact us at licensing (at) grooveshark (dot) com before filing a DMCA infringement claim. Grooveshark has an artists/label program to ensure that any owner of content will be compensated fairly for each time their content is played via Grooveshark. To be clear, as long as your infringement claim complies with the terms of the DMCA we will honor it, however we would much rather pay you than remove your content.

It seems they are relying on the consumers to tell them what they’re doing wrong, and for artists to file before paying.

It seems Grooveshark is just waiting for a lawsuit to end its parade. And yet, on the service goes. The company dealt deftly with a lawsuit from EMI, which ended in a licensing deal and settlement, and a scuffle with Universal cost the company their slot in Apple’s app store.  However, you can still download the app with “jail-broken” iPhones or other Apple devices that allow unsanctioned applications.

Grooveshark is quite literally the website that either you can’t kill, or possibly the site that no one wants to kill. It certainly is popular.

What will become of Grooveshark? No one knows, but if the past forecasts the future, the company will more than likely enter into a protracted legal battle that ends with its untimely demise. Then again, the company was launched in 2007, and has yet to fear for its life a single time.

Could 2011 be the year that Grooveshark grooves its last? How long can they keep streaming music and not get in trouble for it? How much expansion will occur?

Ifbyphone, Inc., an automated phone management system based out of Skokie, Illinois, has just raised $8 million in funding from investors, which brings the startup’s total funding from two rounds of investment to $16 million.

Launched in 2005, Ifbyphone specializes in Web-integrated phone applications that help companies track, route, and automate calls, thus improving lead conversions.

“Ifbyphone builds ready-to-use, off-the-shelf software applications that improve customer interactions for businesses of any size,” CEO Shapiro said in an interview last month.  “Our applications are easy to set up and quick to deploy. This ease of use is key for small- to mid-sized businesses – they are juggling lots of projects, the last thing a business needs is software that requires programming or is difficult to set up and use.”

In addition to the phone applications offered by Ifbyphone, the startup’s acquisition of Cloudvox about a year ago positioned the cloud-based call management company to be a leading application development platform.

Signing the round B of funding are investors Apex Venture Partners, Origin Ventures, Spring Mill Ventures, i2A Fund and Second Century Ventures—the investment fund of the National Association of Realtors (NAR). As part of the new deal, Ifbyphone will be working on developing solutions for voice interactions of NAR’s 1.1 million members.

“In Ifbyphone we’ve identified a partner who can help our members grow their businesses,” said NAR president Ron Phipps, broker-president of Phipps Realty in Warwick, R.I.. “We look forward to working with Ifbyphone to create customer interaction solutions for our industry. Ifbyphone will help NAR members lower their cost of doing business while also offering them new ways to leverage their marketing and advertising dollars and generate increased sales in the process.”

Currently, Ifbyphone has about 40 employees and over 3,000 customers. The investment funds will be used to increase staff and develop products such as “specialized automated-voice applications for real estate and other industries,” according to Shapiro.

We look forward to hearing more news about this Skokie-based company.

“I’m so over YouTube.”

Those were the words that smacked me in the face yesterday. A gaggle of teenage girls sat at the airport in front of the television watching Entertainment Tonight. Specifically, they were watching a piece about several YouTube videos where college kids dunk hoops in crazy places (off airplanes, jumping off cliffs, high rise shots, between railroad cars).

“But, why,” one equally baffled girl asked her.

“Stupid stunts, annoying people trying to make it famous and forwarded “funny” videos in my email inbox. I just want it all to go away,” she said. I was shocked to hear this come out of anyone’s mouth, let alone a teenage girl. The other girls nodded their heads in agreement, uttering “Totally” and “God, I agree.”

They got me thinking.

The day before this puzzling remark, I read an article by venture capitalist Mark Suster about how “Google turned YouTube into one of the most valuable future Internet properties,” and here is this younger, dare I say, hipper generation saying how over YouTube they are.

I had even just uploaded a video of my nephew’s insane reaction to receiving a Wii for Christmas in the hope that Nintendo would notice and send us a free game or even a letter – anything to acknowledge or validate our existence.

Let’s be honest, I’m just as fame hungry as the rest of them. Or should we call it desperate?

But, are these girls just an example of where the mainstream is headed? Are we so obsessed and focused on trying to be or trying to find the next star on YouTube that we don’t recognize it’s doomed existence? Is the demise of YouTube before us?

Sometimes surrounding ourselves with other technologically savvy and passionate people, we can get out of touch with how the mainstream truly feels about certain things. The media clearly believes that YouTube news is what people want to watch, otherwise they wouldn’t be showing it.

Then again, the BBC quoted Tamar Kasriel, founder of Futureal consumer trends consultants, predicting that a term called “techno yoyo” will come into the common vernacular to describe people who have a love-hate relationship with technology. These people will begin demanding “Wifi-free” zones to disconnect from all technology.

When will the public stop becoming interested in crazy, unbelievable tactics from talentless people? When will we stop being impressed by the baby Charlie that bites his brother’s hand? Or the Ninja cat that stalks its owners? Or the double rainbow? Or the viral sensation of wedding dances and entrances? (I personally will never cease to be impressed by choreographed dances.)

People, interns and talent scouts spend hours scouring the Internet for the next sensation. But is it all useless? Are the next sensations already washed up before they’re even found?

If the Guinness World Records is anything to use as comparison, we won’t give up hope. We will always be craving stupid, mind-numbing exploits to see who can be faster, bigger and better. Or simpler, more ironic and more subtle – as the fad seems to be going now.

I guess these are just our ways of telling stories – of connecting with other humans. We will always want to cheer for the underdog – the next Susan Boyle, the next Antoine Dodson or Justin Bieber. We all want to say we found that person before they were famous, or to be able to hope that that person could be us.

Jason Fried, founder of 37signals, tweeted yesterday “Kinda incredible to ponder that the iPad is only about 8 months old.” Eight months is an eternity in the technology world. I certainly don’t remember a time before the iPad. That’s pretty insane.

People are hedging their bets right now on YouTube sticking around, the Google and the investors certainly are – but it’s impossible to say. Could these teenage girl’s comments be the beginning of the tipping point? How many people have to repeat that one sentence – “I’m so over YouTube” – for the trend to disappear into AOL-land? With two billion views daily, it seems unlikely.

I guess we won’t have to wait long to find out.

Update 12/29: Apparently, speculation on Groupon’s round of financing was only partially right, according to TechCrunch. They have raised $171 million to date, and expect to finish off at $4.75 billion – not the $6.4 billion quoted yesterday.  Allen & Co is advising Groupon on the deal.

More Groupon news today: Mashable is reporting that Groupon is raising almost $1 billion in Series G funding, citing VC Experts.

The story from VC Experts claims that Groupon is filing to raise up to $950 million in funding, which would give the Chicago-based daily deal startup a valuation of about $6.4 billion, more than Google’s reported $6 billion buyout offer earlier this month.  From VC Experts:

There are a few key differences in terms and pricing between the Series G and its Series F, raised in April. The $135 million Series F, led by Digital Sky Technologies, was priced at $32.12 per share and was junior in liquidation preferences to all preferred shares. This round is priced $.53 less, at $31.59 per share and is senior to all. The latest filing also increased the authorized shares of voting common to 250 million shares, and if all of them are issued, Groupon’s valuation could be as high as $7.8 billion. The financing comes just weeks after Groupon’s rejection of Google’s $6 billion buyout offer. Groupon gave no official reason for the rejection, though reports speculated pricing, strategy and anti-trust issues were to blame.

This is huge news for Chicago.  We’ll find out more and post soon!