Draper Fisher Jurvetson, the venture-capital firm that invested in AdMob, an online ad network later bought by Google Inc., continues to pour funds into new advertising startups, said Mark Bailey, a venture partner at the company.
The venture-capital firm recently became a small investor in TrialPay Inc., which lets online merchants to place targeted ads during purchases, Bailey said. (Bailey declined to disclose the exact details of the investment.) It's also an investor in Tremor Media, which serves up video ads to connected TVs and set-top boxes, as well as in online media and advertising network Glam Media, ad platform isocket and online ad network RadiumOne. Draper Fisher Jurvetson also continues to look for mobile advertising startups, Bailey said.
Draper Fisher Jurvetson has become widely known for making bets on ad companies such as AdMob, a mobile-advertising company that was purchased by Google Inc. for $750 million in 2009. In August, comScore Inc. acquired another investment, startup AdXpose, a provider of ads analytics that's used to improve performance of ad campaigns. Draper Fisher Jurvetson sees more opportunities for investors and ads startups.
``The world of online advertising is continuing to evolve, and there are new and very promising opportunities for smaller, venture-backed companies,'' Bailey said. The U.S. online advertising market is expected to reach $31.3 billion this year, up from $26 billion in 2010, according to consultant eMarketer Inc.
Startups focused on serving social-networking companies such as Facebook Inc. in particular may have a big opportunity, Bailey said. Most social sites are still searching for ways to make money off of advertising, and traditional banner ads haven't proved affective, he said.
``We are all familiar with the spectacular valuations that today's hot social digital media properties are commanding,'' Bailey said. ``This investor optimism is also accompanied by very high expectations. A new business model has emerged among these digital media properties: freemium, monetizing a small portion of users.'' That's where TrialPay, which helps sites like Zynga Inc. and Fandango to push users of their free services to pay up, comes in.
``For those guys, selling normal advertising doesn't make that much sense,'' Alex Rampell, Chief Executive of TrialPay, said in an interview.
``The overarching idea is that we are all spending less time in front of our televisions, and more time on our mobiles, social media, casual gaming,'' Bailey said.
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