Online Trackers Rake In Funding

Venture capitalists are plowing money into companies that help target online advertising, despite public concern about privacy and potential government restrictions.

In the past three months alone, online-tracking specialists Lotame Solutions Inc., Media6Degrees Inc., eXelate Media Ltd., [x + 1] Inc. and Turn Inc. each secured new investments from prominent venture-capital firms. In January, Millennial Media and Tapjoy Inc., which deliver ads to smartphones, each said it had raised more than $20 million.

“It’s a huge market and it’s growing,” says Chris Fralic, a managing partner at First Round Capital, which ranks among the venture firms most heavily invested in tracking the movements of Internet users. “We saw a lot of things jelling around those spaces.”
First Round, a six-year-old firm that primarily invests in young companies, has backed 33Across Inc., which analyzes users’ social networks, and Demdex Inc., which boasts a “behavioral bank” of user profiles.

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