The funding comes from Bessemer Venture Partners, Columbia Capital, Charles River Ventures and New Enterprise Associates (NEA).

To date, the Baltimore-based company has raised $65 million. But that hardly seems sufficient when fighting Goliaths like Apple and Google, which both made multimillion-dollar acquisitions last year in the space.

Previously, CEO Paul Palmieri said it was Millennial’s intention to stay an independent company, and therefore aim for an IPO. Is $65 million enough?

The funds will be used for acquisitions in 2011, and to invest in the company’s international business, which is considered smaller than its competitors’, such as Google’s. So far, it has built a team in London, and has begun to expand to the Asia-Pacific region.

Market share statistics are notoriously poor in the space, but in December, IDC estimated that Millennial was the largest independent mobile ad network at 15.4 percent, trailing behind Apple with 18.8 percent share and Google/AdMob with 19 percent share. Millennial’s share was estimated to be larger than Yahoo’s 10.1 percent share.

Millennial declined to give specific numbers, but said it achieved “operational profitability” in 2010, and tripled its revenues during the year.

Being the largest e-commerce company is an obvious barrier to entry, but there are at least two opportunities in 2011 that will drive even more traffic to its site and others: Social and mobile.

A 78-page presentation by J.P. Morgan on the Internet Sector Outlook of 2011, which focuses a lot on the e-commerce market, predicts that the big losers will be physical retailers as more spending shifts online.

If you’ve been reading eMoney, you already knew this. Last month, we referred to these trends as the so-lo-mo trifecta, referencing the impact of social, local and mobile on e-commerce.

In 2010, J.P. Morgan found that nearly 8 percent of Amazon’s traffic was coming from Facebook, compared to 20 percent coming from Google, and that e-commerce revenues are expected to grow by 13.2 percent in 2011.

But as more consumers discover products and services through social networks, like Facebook, and compare prices on their smartphones in stores, traditional brick-and-mortars will lose market share and face bankruptcy, J.P. Morgan concludes. (It’s a small coincidence that Macy’s said it expects to add about 725 new positions over the next two years to beef up its Macy’s and Bloomingdale’s Web sites).

Here’s how J.P. Morgan makes the case for the future of e-commerce:

–U.S. e-commerce revenues totaled $28 billion in 2000, soaring to $166 billion in 2010. Revenues are expected to grow by 13.2 percent in the U.S. this year alone.

–In 2010, 36 percent of people said they bought something online at least once a month. Slightly less, or 32 percent of people, said they purchased one to two items online a month. However, less than 2 percent of folks bought more than 10 items a month.

–Traffic to Amazon’s sites is increasingly coming from Facebook, jumping 328 percent over the past year to almost 8 percent. That compares to almost 20 percent of referrals coming from Google.

–Facebook is driving less traffic to eBay than to Amazon, or roughly 4.7 percent, compared to 11.4 percent from Google.

–E-Commerce 2011 Top Picks: Amazon, Priceline and Latin American e-commerce provider MercadoLibre.

Apple can tout that it remains in the lead in the U.S. market with more than 28 percent share as of November. Android, meanwhile, continues to gain and now has 25.8 percent of the market.

RIM has been losing share, but remains in second place with 26.1 percent and is still in a statistical tie with the other two given that Apple’s lead is within the survey’s margin of error.

But those numbers tell only part of the story, since they focus on what phones are currently out in the market overall. More indicative of the future (and less rosy for RIM) are the stats on recent phone purchasers.

Those figures show Android attracting more than 40 percent of new smartphone buyers, with 26.9 percent opting for an iPhone and 19.2 percent choosing a BlackBerry. Consider how that has changed since June 2010, when BlackBerry was garnering 35 percent of new smartphone buyers and Android accounted for 27.5 percent.

Also of note were findings released by Nielsen last month that showed Android more popular among men and Apple’s iOS more popular among women.

The good news for all involved is that proverbial rising tide is lifting all the top smartphone boats. In November, 45 percent of recent phone buyers chose a smartphone over a feature phone, Nielsen said. In June 2010, only
slightly more than a third of phone buyers scooped up a smartphone.

In all, smartphones now account for 31 percent of the consumer market, as compared to 24 percent as of last June, Nielsen said.

That’s more than 50 percent above the estimates that most Amazon bulls, like Citigroup’s Mark Mahaney, were floating just a couple of months ago.

Bloomberg attributes the numbers to “two people who are aware of the company’s sales projections,” so the data could still be off, from outsiders who don’t know what the company is actually doing. Or it could be 100 percent accurate, from employees who know precisely how many KIndles Amazon is selling.

Regardless, the notion that Amazon is selling a whole lot of Kindles feels right, according to my 100 percent unscientific anecdotal survey: I know several people who are buying Kindles as holiday gifts this year, and they’re not early adopters.

To me, that feels like a tech gadget going from novelty to mainstream, helped by a three-year marketing push (remember when those first, brutally ugly Kindles hit the market in 2007?) and a $139 entry-level price point.

Take another look at this chart from Mahaney’s October report, which plots the Kindle’s price drop over the years. By all accounts, it looks like you could flip this thing over, and it would give you a good sense of Kindle sales:

So what about the data that shows Apple’s iPad, which lets you read books in color and do a whole lot more, eating into the Kindle’s market share?

It may be correct, but also not relevant: Shrinking market share doesn’t mean you can’t have booming sales, and my hunch is that people who buy $139 Kindles end up buying more e-book titles per capita than the average iPad owner.

Also worth noting that Amazon doesn’t necessarily lose when someone buys an iPad and not a Kindle. The bookseller’s read-everywhere platform means iPad owners can read Kindle titles on their machines.

I can back this one up with highly anecdotal data, too: The iPad that stays in MediaMemo HQ is stocked full of e-books, and only one of them has been purchased at Apple’s iBookstore.

“Apple’s share of the PC market has been below 5 percent for most of the past 15 years, and even with the much-hyped “iPod halo effect,” this level hasn’t changed in recent years,” Shope writes. “With the iPad, however, Apple is now offering a unique computing device that is priced for the mass market. In fact, our Apple forecast assumes that the iPad segment will surpass Apple’s Mac business in revenues and profits by the end of fiscal 2011–the first full year of iPad shipments….If we include tablets in our PC unit forecast, then our estimates suggest Apple’s combined iPad and Mac market share would reach 12 percent in 2011. Based on the current market share breakdown in the PC market, this could presumably make Apple one of the largest vendors in the combined PC and tablet market.”

As Shope concludes, that would represent a profound change in the PC industry’s competitive landscape. Apple’s share of the total PC market currently stands at around 4.4 percent, and that’s the highest it’s been since early 1996. For it to spike to 12 percent in 2011 on the strength of the iPad suggests that the traditional PC vendors need to redouble their tablet efforts to maintain market share.

Oh, one last thing. Shopes’s target on AAPL? $430

In fact, Caris & Co. analyst Sandeep Aggarwal says he expects Kinect to generate about $2 billion in gross revenue for the Xbox ecosystem. Beyond sales of Kinect itself, the controller is also driving sales of most everything else Xbox related. In Aggarwal’s view, Kinect offers four distinct benefits to Microsoft:

1. Better material attach rate for the 45 million Xbox installed base
2. Higher adoption and market share gain for the console itself
3. An uptick from the sale of new titles
4. Lower attrition and higher gross new subscriber growth for Xbox Live users

“As expected, the launch of Kinect increased noticeably the overall buzz around Xbox and helped improve the adoption of the console,” he concludes. “Just before the launch, Microsoft increased its forecast for worldwide sales from 3 million to 5 million by the end of the year. This forecast seems conservative now, given the strong reception.”

11:48 am: Joe Belfiore gives a quick résumé. Windows Media Center, Zune, etc.

11:49 am: Walt: Why so late?

Belfiore: We’ve certainly been doing phones for a long time. A lot changed in the industry with the iPhone. Belfiore says Windows Phone 7 tries to respond to what Apple has done with the iPhone and Google with Android.

11:50 am: Walt: What makes you think you are right up there when you don’t have a lot of things?

Belfiore: (Points to Andy Rubin’s comments that Android is really for tech enthusiasts.) Belfiore says he agrees and that Windows Phone is built more for everyday people, to do the key tasks average users do and do so in an elegant way. “There are certainly some functionality shortfalls, and we are going to work to address them,” he says.

Copy and paste coming in “early 2011,” he reiterates.

As for multitasking, he says some tasks are there, such as background fetch of email and Web pages. Music playing works (but only if you are using Zune).

Walt points out that is where iPhone was when it launched and it got away with it because it was so different from what was on the market.

11:53 am: Belfiore says that some of Windows Phone 7′s features are worth the tradeoffs. As an example, he cites a feature that takes a picture with one click even if the phone is locked.

“We’ve focused on valuable scenarios that are different,” he says. “Some set of users will choose the value of those scenarios.” Belfiore says that Microsoft still aspires to fill the gaps.

Walt: How many have you sold?

Belfiore: We’re not talking about numbers yet.

Walt: Other people do.

Belfiore: We’re four weeks in. At some point we’ll get to that. “It’s just too soon to talk about numbers.”

11:55 am: Talk shifts to Microsoft’s ad campaign that suggests Microsoft’s phone provides at-a-glance information so that people can go back to their “real” life.

“Being late to do this type of experience,” Belfiore says, allowed Microsoft to go back and see what was working and what wasn’t with existing software. “Can people accomplish the most common tasks more quickly?”

That, he says, is how the company was led to the dedicated camera button. Another good example, he says, is Live Tiles–icons that can update with notifications, photos or other data.

11:58 am: He’s talking more about the Live Tiles and the fact that you can have a tile for the people who are most important to you and then contact them in any way you want (text, photos, call, Facebook).

12:00 pm: Walt: How many apps do you have?

Belfiore: I think the marketplace now has between three and four thousand.

12:02 pm: Walt: (Google Android chief) Andy Rubin said that parts of Windows Phone 7 have been around a long time. Is it old or new?

Belfiore: It’s mostly new. It is true we have kernel code that has been around for a long time.

But that’s not a bad thing, he says. The code has been tested, the bugs have been fixed. It’s true on the desktop with Windows. It’s true of Linux as well.

It’s probably true of Android, since it is Linux-based, which is based on Unix.

But a lot is new, such as Silverlight and XNA, in which developers build their apps. “He implied we were encumbered by legacy…I don’t think that’s true.”

12:06 pm: Walt: Why not build your own phone?

Belfiore: Our view is that both Microsoft’s core capabilities and our ability to affect more people would be greater with third parties building diverse hardware.

But, Belfiore says, the company recognized the challenges that come when you don’t make both software and hardware. In the past, Windows Mobile was wide open. This time around, Belfiore says, the company aimed for “the right amount of specified variation in hardware and the right amount of specified sameness.”

12:08 pm: Over time we expect to increase the variation that you see. “We are trying to get the benefits of constraint,” such as better user interface and making things easy for developers while still giving choice to consumers.

12:09 pm: Walt: How long will it take you to again become one of the big players in terms of market share.

Belfiore: It will certainly take some time. He points out that current Windows Phone software runs on only about 10 phones, all high-end devices. Over time, they want to get to lower price points.

Walt: So, how long?

Belfiore: I don’t know how long it will take.

Walt: Months?

Belfiore: It will probably take longer than that.

Walt: A couple of years?

Belfiore: Yeah, maybe.

Walt: Who will be the leaders three years from now?

Belfiore: It’s certainly the case that there are a lot of people building good products. My personal feeling is things won’t change that dramatically that quickly.

I do assume we’ll be in it. The question has to start with whether you have a great product….I think we have that so far. We’ll see how this plays off. BlackBerry has done that in the past. Nokia has done that in the past. We’ll have to see about the future.

12:13 pm: Walt: What about tablets, an idea Microsoft has championed for a long time. But what is the strategy? Seems to be desktop Windows is not a variation of the Windows Phone.

Belfiore: Historically, Microsoft has tried to adapt Windows for other uses (e.g., Media Center, tablet).

So far we’ve continued down that path.

The work we have done on the phone has been focused on very small-screen devices.

Walt: Why not just scale up? Both Apple and Android are working from their phone OSs in doing their tablets.

Belfiore: We’re four weeks out of introducing this new thing. The state of the world today is Windows, is our broad operating system. Runs on same screen size as tablets.

12:15 pm: On to Q&A

Q: How can phone makers really differentiate beyond apps and things like a keyboard and a camera?

Belfiore says the company aims for elegant co-existence. Dictates certain screen sizes, three buttons, four-point capacitive multitouch. “We really want all users to get a great touch-typing experience.”

There’s no upper limit on what they can add in terms of hardware features. For example, a hardware maker could add near field xommunications or some other peripheral not already supported.

12:17 pm: Joshua Topolsky from Engadget asks about tablets again, says last answer a bit of a cop-out. “You can’t possibly be this blind” that Windows 7 isn’t going to work on tablets in the way you want it. Is that really the strategy?

Belfiore hints that the announced strategy focuses on Windows for tablets, but says the company will evaluate that going forward.

Topolsky: Courier?

Belfiore; I wouldn’t count on that.

Last question, from a mobile video calling app. As of today, no native access for developers that need things like native access to the camera.

Belfiore: Individual software makers don’t, but phone makers and operators do, so software makers could work with them. He reiterates the platform is new and the goal is to open things up.

Goal is that all of these creative things can be built. “We’re going to move as fast as possible.”

12:21 pm: Walt: One last question on carrier craplets. There’s a limited number of tiles on Windows Phone 7. On the two phones I saw, some of the space I saw was taken up by carriers.

Belfiore: I really like our approach. I think it is really well considered. When AT&T sells a phone it is AT&T selling the phone. Makes sense for them or hardware makers to be able to showcase their differentiation. Both phone makers and carriers can create tiles, but the user can choose to remove the tile or even uninstall the app.

“We are hearing that Verizon…may be willing to pay for exclusivity to itself and AT&T. For these reasons, Verizon could be more willing to give in to Apple’s terms,” Wu said in a note to clients this morning, adding that the iPhone’s continued success has undoubtedly given Apple the upper hand in its negotiations with the carrier. “Apple is back in the driver’s seat with a record 14.1 million iPhone shipments in the September quarter helping AT&T gain share against Verizon over the last two quarters as Android starts to lose some of its luster (at least at Verizon). In addition, our sources indicate that Verizon does not believe the pending launch of BlackBerry 6 on its network is likely to have a material impact.”

An interesting bit of speculation. If Apple were to win concessions from Verizon and AT&T to keep the iPhone exclusive to those carriers, it might be able to drastically expand the device’s distribution in the States and keep its margins in line at the same time. As Wu writes, “This is important as many, including ourselves, have been concerned that Verzion iPhone economics could be less favorable given the strength of Android and higher cost of components, particularly those associated with CDMA.”

That said, with Google’s Android OS gaining market share so quickly it might be a better move strategically to sacrifice a bit of margin to bring the iPhone to more carriers and temper its rival’s growth.

The engine for that spike in sales? Samsung’s Galaxy S phones, which the company distributes through six U.S. carriers, among them AT&T, Verizon, Sprint and T-Mobile. Samsung says it has now shipped three million Galaxy S smartphones since the line’s mid-July launch.

And how did other Android vendors fare in Gartner’s rankings? Motorola placed second, HTC came in a close third and LG a very distant fourth.

U.S. RANKINGS: ANDROID

1. Samsung
2. Motorola
3. HTC
4. LG

Seems Motorola’s alliance with Verizon is finally beginning to cost it a bit of market share.

“Motorola, by launching its key Android devices on Verizon Wireless, was able to gain significant market share in the U.S. but is now in a difficult position as their Android business is too reliant on Verizon Wireless with roughly 40-50% of their worldwide Android sales coming from Verizon,” Gartner analyst Hugues De La Vergne told me. “With a rumored iPhone coming to Verizon in Q1, Motorola is the hardware vendor that has the most to lose.”