Pixazza raises $12 million to make images across the Web interactive

Pixazza, a company that can take static images and enrich them with live links to products, has raised $12 million in a second round led by Shasta Ventures. Earlier investors, including Google’s new venture arm, also participated in the round. Todd Francis from Shasta will join Pixazza’s board of directors.

The funding will fuel a new self-serve product that will make easy for smaller publishers to enhance their sites with Pixazza’s technology. The Mountain View-based startup uses an army of taggers to identify products and link them to shopping sites like Amazon.com or Zappos. For example, you might see a photo of actress Penelope Cruz wearing a new outfit on a fashion blog. If you roll over the image, you’ll see links to similar products that you can buy. Pixazza then turns around and shares the advertising revenue with publishers.

“There are over three trillion images on the Web and no one has done anything with them for 15 years,” said Pixazza chief technology officer James Everingham.

The company has built a sophisticated back-end system to harness human judgment. When they log in, Pixazza’s software can make suggestions to them about what an image contains, cutting out millions of other possibilities and much of the hard work. Taggers are paid on a commission model, related to whether a shopper actually visits the destination or buys the item.

Since experimenting with the technology in fashion, Pixazza has recently branched out into home furnishings and travel and now attracts 25 million unique visitors per month and eight billion image views per year. Pixazza-enhanced images boast a 13 to 15 percent mouseover rate for every impression they get.

It earns revenue through standard online advertising models — cost per 1,000 impressions and cost per click — as well as affiliate revenue, where it earns a cut of every sale it drives.

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Companies: Google Ventures, Pixazza, Shasta Ventures

People: James Everingham, Todd Francis