Last Blogger

Sponsored

So as we’ve been discussing this week, the sponsored post/link wars are beginning. There are some very serious challenges laying ahead for this controversial revenue generating strategy. Google’s latest announcement with regards to sponsored links has revived the issues of blogger ethics, whether sponsored links are spam, etc… But just as the clouds were darkening the skies, a ray of sunshine came beaming down.

In order for PPP to survive something needed to happen. Something big. As it so happens, there was something big in the works for the lost while that has just been announced. $7 million. Yep, you heard it. $7 million in their second round of venture capital fund raising. That means that they’ve not got enough wiggle room to try and push through some of the immediate challenges. With opportunity though comes the big question. What are they going to do with $7 million?

They continue to have significant software development issues, so trying to shore up those issues would go a long way. The problem in this kind of market is that money isn’t everything. Finding the talent and developing the testing strategies takes more than money. It takes skilled, experienced software developers. Those are becoming increasingly difficult to find as all companies are ramping up and expanding. The thought of working at a company that lies directly between Google’s cross hairs may be intriguing to some, but for most, it simply spells short term paycheck.

Will the new capital be enough to beat out Google or will it be enough to allow them to grow to the point where they are big enough to work it out with Google. While it’s commonly believed that Google’s algo is Google’s algo and breaking the rules will get you busted no matter what, that’s not entirely true. There are lots of examples of big enough companies using techniques like cloaking and lots of other stuff that Google’s generally against and maintaining their rankings, and the some. So size does matter. $7 million is nothing to rival Google’s billion dollar earnings, but it’s enough to start developing enough growth to start making some noise. Particularly when you consider the fact that PPP growth means growth of associated bloggers which will increase their leverage exponentially.

By the same token though, PayPerPost’s growth will come equally through the expansion of their advertiser base. By convincing advertisers to advertise on blogs, they’re tackling Google’s bread and butter. So while PPP may be able to wiggle their way out of the corner they’re in, Google’s not going to be cutting them any slack any time soon.

The original press release:

The PayPerPost Revolution Accelerates, Sponsored
Blogging Marketplace Secures $7 Million Series B

Draper Fisher Jurvetson leads round and joins Board of Directors

ORLANDO, FL – (June 12, 2007) – PayPerPost, the leading marketplace for advertisers to reach bloggers and other consumer content creators, today announced it has completed a $7 million second round investment led by Draper Fisher Jurvetson, an investor in the company’s Series A and one of the world’s leading high-technology venture capital firms. The financing brings the total amount of capital raised by PayPerPost to over $10 million, giving the company considerable resources for further development as the industry’s leading Consumer Generated Advertising marketplace. Additional participants in the round include existing investors Inflexion Partners and Village Ventures as well as new investor DFJ Gotham. With this investment, DFJ Managing Director Josh Stein also joins PayPerPost’s Board of Directors.

“PayPerPost created this exciting new advertising space and has established itself as the industry leader,” said Ted Murphy, chief executive officer of PayPerPost. “Although we’ve only used a portion of our first round capital, this added support from investors unlocks significant growth potential. Our content creator and advertiser ROI metrics clearly demonstrate the upside for PayPerPost’s model. We intend to use this capital to build the infrastructure, visibility and professional expertise necessary to reach and retain a greater network of advertisers and content creators than ever before.”

Since its founding in June of 2006, PayPerPost has signed more than 6,500 advertisers to its groundbreaking service, which has enabled Consumer Content Creators to be compensated for their efforts discussing specific companies, products or services via blogs, videos or other media. The content creators are required to disclose relationships with advertisers on their blog, providing transparency for the end reader. Over 125,000 Internet postings, most in the form of blogs, have already earned money for their creators through PayPerPost’s innovative marketplace. PayPerPost recently released PayPerPost Direct, a disruptive new service that allows advertisers to contract and negotiate directly with individual bloggers they identify through a safe, managed system.

“PayPerPost has laid a strong foundation for the future,” noted Tim Draper, founder and managing director of Draper Fisher Jurvetson. “It continues to attract a critical mass of participants from both the advertising and blogging communities. Analogous to Overture’s sponsored search model, we believe PayPerPost’s business model holds disruptive potential and will enable the company to thrive in the evolving paid-content arena.”

To mark the $7 million dollar funding, PayPerPost has launched a new website detailing the company’s service offering at http://www.payperpost.com. Bloggers and advertisers can easily sign up at the site and begin leveraging the self service marketplace.