Dollars still flowing to online ad start-ups

Online advertising start-ups have increased the amount of venture capital funding they have attracted, despite the economic slowdown in the US.

Online advertising start-ups have increased the amount of venture capital funding they have attracted, despite the economic slowdown in the US.

According to a ContentNext Media report covered by ClickZ, venture capitalists invested $US400 million in early stage US online ad businesses in the second quarter of 2008, up $US100 million on the corresponding period in 2007.

Based on a mix of company reports and educated guesstimation, ContentNext Media estimates that overall investment in online ad companies in the US topped $US2 billion between June 2007 and June 2008.

As for online ad connected acquisitions, a few big buys took their total value for the year to over $US20 billion – primarily Google’s $US3 billion purchase of DoubleClick and the $US6 billion purchase of aQuantive by Microsoft.

ContentNext Network publisher Rafat Ali says much of the research was in web emerging technologies such as social networking rather than the pure search advertising sector.

“It does show the concentration of power in terms of Google,” Ali says. “Because of Google’s dominance, startups are worried about starting anything in search advertising and trying to take on Google.”

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