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Private equity firm Providence Equity Partners has acquired a two-thirds stake in comparison-shopping site NexTag Inc. for about $830 million, according to the WSJ’s Kevin Delaney.

The deal values the San Mateo, Calif. Nextag at about $1.2 billion, and represents an amazingly lucrative deal for NexTag, which is just one of dozens of shopping search engines and which arguably doesn’t have any clear technology advantage compared to others.

VentureBeat has tried reaching the company over the past two days for comment, but it has not responded.

The deal, assuming it will be confirmed, also tells an emotional rags-to-riches turnaround. The company, a was almost left for dead in 2000. Facing $700,000 in debt after the Internet bubble burst in 2000, chief executive Purnendu Ojha gave his employees a two-month notice. He then hunkered down with four executives and they took pay cuts of 85 percent. They managed to save a staff of 16, down from 55, and they shed their previous model of an online auction. They instead turned to online shopping comparison search. Morgenthaler Ventures pumped $1.3 million into the company to help. Technology Crossover Ventures pumped in another $18.4 million in 2004.

Ojha is a very tough, headstrong guy. We got to know him and a few of his employees during this story written two years ago. Ojha introduced an ascetic culture that some considered extreme — many employees left. PR people were frustrated by his refusal to spend on marketing. The office was dreary — across the street from a graveyard. Ojha had learned from the excesses of the dot-com Bubble, and from the mistakes of his contemporaries. Through grit, he worked NexTag’s comparison search into the less glamorous areas, such as mortgage offerings and financial services — areas which have turned out to be very lucrative.

The company generates revenue from advertising on its site and, as the WSJ writes, by charging retailers and other service providers to direct consumers to their sites. NexTag’s Web site says more than 11 million people use its service monthly. It has been in the black almost from the beginning of its turnaround.

Under the deal, existing investors, including NexTag management and venture-capital firm Morgenthaler Ventures, will keep stakes in the company, according to the WSJ.

The size of the deal reflects the excitement in the private equity world about prospects in Internet advertising — it follows Hellman & Friedman’s home-run when it sold DoubleClick for a planned $3.1 billion to Google.

(Updated) Here’s the latest action, catching up for the past two days:

Boring shopping Web sites attract interest — There are so many shopping search engines, we’ve given up trying to count. And yet investors remain interested. Santa Monica, Calif.’s ThisNext, a social shopping Web site, has raised a round of venture debt Western Technology. It lets people share and recommend products with friends. This comes after rumors that private equity firm Providence Equity Partners is buying 66 percent of Nextag, the Silicon Valley also-ran shopping search engine, for between $1 and $1.2 billion, which would be huge. GigaOm has the story, but classifies it as a rumor. We requested comment from Nextag chief executive Pernendu Ojha Wednesday afternoon, but no word yet. Nextag is reportedly doing $200 million in revenues, with a lucrative mortgage and other lead generation business going — it buys ads from Google to get business.

Forget instant messaging, get ready for instant thinking — Brown University researchers have developed a way to let a man play simple games by moving a cursor with only his brain, no hands. We’ve read about similar research before; it starting with monkeys. So here comes the future: All work, emails, spreadsheets, and Google searches, will one day be performed by mind control. No way around it. You won’t need that Google chip in the brain, because you’ll be able to control everything, not just Google search. And then there’s the next step — “network-enabled telepathy” — or instant thought transfer. Your thoughts will flow from your brain over the network right into someone else’s brain, according to a DARPA researcher.

EBay moves into radio auctions — EBay will begin allowing radio stations to auction advertising air time on its platform, in cooperation with Bid4Spots Inc. of Encino, Calif. More than 2,300 radio stations are expected to participate. However, we’re not certain why this will work, when its effort in TV didn’t seem to work.

Yahoo prices ads on value of traffic — Yahoo’s Panama charges advertisers more to place ads on sites likely to draw the most valuable traffic, based on the number of people who click on ads and their likelihood of carrying through with an order. See statement here.

Google purchase of PeakStream — See our story here.

The Amp’d whitewashing begins — Amp’d Mobile, the bankrupt mobile network that offers entertainment to youth, no longer has the ridiculously high number of board members cited earlier (20). Jon Auerbach of Highland Capital Partners and Allen Beasley of Redpoint Ventures have resigned, Dan Primack points out. Each has removed mention of the company from their online bios. Highland has gone so far as to remove Amp’d from its online list of portfolio companies. Too bad. We like style of venture firm Bessemer: The firm boldly lists its mistakes.

Microsoft’s search engine skunk works not as reported — Earlier, we cited a report by Techcrunch that Microsoft has launched a stealth search project here in Silicon Valley. However, search expert John Battelle has heard the report is not correct, and says stay tuned.

This Google Street View gets worse — We’ve ragged on the service’s privacy problems already. Now we find out that Google’s cameras took a shot of a guy peeing on the side of the road, and this is still in its maps. Harder to believe is that Google has left it up for a full day after it was discovered by bloggers. See details via Digg. We’ve requested comment from Google. [Update: Kate Hurowitz, of Google, responded: "...we respect the fact that people may not want imagery they feel is objectionable featured on the service. We provide easily accessible tools for flagging inappropriate or sensitive imagery for review and removal." We at VentureBeat didn't see those tools immediately, but we do notice the offending image has now been taken down.]

Michael Volpi has joined Joost – We reported this; it is now official.

Ready for your iPhone? — See the company’s latest ads.

LaLa Media pays for music, and gives it to you for free — Lala is one of the quirkier companies in Silicon Valley. A year ago, we were puzzled when the Palo Alto, Calif. start-up launched as a CD-swapping service. CDs in 2007? We were puzzled again when it pocketed $14.7 million from Bain Capital (a private equity firm with little experience with start-ups) and Ignition, another venture firm. And then we really scratched our head when it bought a radio station, WOXY. What next? Well, as widely reported yesterday, Lala has blitzed the world by offering to serve music for free, directly from its Web site, and it has the agreement from Warner Music Group to do that with Warner’s music assets. Lala and Warner believe this will stimulate sales. If you like the music you listen to, you can buy the album. True to the odd style of this company, chief executive Bill Nguyen has decided he won’t let you buy individual songs — and for no apparent reason. Also, Lala will change pricing, depending on the popularity of the album, what is in your music library already, and other factors — which could create confusion. Lala also said it is working to license music from the other three labels.

Crazier, Lala will pay about $140 million to the labels in order to do this streaming. But unlike other music-subscription services, which charge users a monthly fee, Lala gives you this all for free.

The radical nature it all, and Lala’s ability to hack Apple’s iPod platform, is masterful: Separately, Lala lets you pay to download songs to your iPod for $0.99 cents, and you can do so only with the iPod — no other device. Once you do this, you can’t move the music elsewhere. So it it is a digital rights management (DRM) equivalent. It’s a direct attack on Apple’s iTunes, and ignores other devices too. It counts on people discovering the service through its web site. What’s more, Lala is getting its investors to pay for it. It said it is raising some $40 million to pay for expected short-term losses (there’s so much capital floating around, Lala may actually find a VC to fund this).

Finally, its program will scan your desktop for digital tracks — everything from iTunes downloads, ripped CDs, etc — and then keeps it all for you in an account online so you can access it from anywhere. It then lets you download that to your iPod too. And you won’t be able to use iTunes again unless you reconfigure your iPod! To our knowledge, Apple hasn’t responded to this yet. This is such an endearingly outrageous move by Lala that that we find ourselves warming to this company. It’s a very long, desperate shot, but if it works, it could be big.

More details at Gizmodo and at Techdirt.

Ask.com’s new search – The second-tier search engine calls its new search “Ask3D,” but it’s a terrible name, because its not three dimensional. The 3D refers to three columns, a new way of organizing a search engine format. See below for an example of a search on Oakland. On the left is the search bar, and underneath are pointers to ways you can refine your search if you don’t find what you want — something that Google doesn’t have. In the middle column are the results. This is where the 3D search falls short. It is somewhat bewildering: An ad in the middle is barely demarcated (if you squint, you may be able to detect a ever so slight difference in shade). Finally, on the far right, Ask gives you different types of files related to your search: video, images, links to MP3 files, event listings and encyclopedia results from Wikipedia. Videos are provided by Blinkx, but not Google Video, another shortcoming. Finally, no ads on the right. More details here and here.

Updated

If you’re searching to buy a product online, there’s no single “branded” engine that stands out — and for a reason. All of the major shopping engines sites have sold out to advertisers.

This may represent a grand opportunity: If a Google-like search engine emerges in shopping, perceived to be without bias, it could be hugely popular. It could “become the ubiquitous brand,” said Dan Ciporin, the former CEO of Shopping.com, calling this a “missed opportunity.” Ciporin left Shopping.com when it was acquired by eBay in 2005, and this week joined a venture firm Canaan Partners in its Westport, Connecticut office.

However, its unclear to us whether there ever will be a singularly popular shopping engine. There are too many ways to shop.

Here’s the background: Leaders like Shopping.com (owned by eBay), Shopzilla (owned by Scripps) and Pricegrabber (bought by Experian), and independents Become, Nextag and others all feature results that are paid for by vendors — so you’re never really sure why a particular product or vendor is ranked high or low. Many of them even buy search traffic by placing ads on Google and Yahoo. The sector is in malaise, experiencing a wave of management defections — even as a host of new companies are springing up to pick off niches. Retrevo and others are targeting consumer electronics. Ugenie focuses on books, and Like.com specializes in fashion, jewelry and textiles. Reflecting the fragmented state of shopping search, new sites like Roboshopper are aggregating results — just like the “meta” search engines that showed up several years ago to aggregate Google, Yahoo and Ask. But like those, Roboshopper’s site doesn’t really add much.

Even Google’s search engine, Froogle, has veered from purity. It forces vendors to submit “feeds” to its engine, effectively forcing out the small retailers who don’t want or know how to. Many brand names like Amazon.com and Williams-Sonoma aren’t represented.

Thefind, a Mountain View start-up, says its approach — of providing only unpaid results — is paying off. It crawls large portions of the Web, and returns results based on its relevance criteria. It has built its own equivalent of Google’s “Pagerank,” but for shopping, counting incoming links to a particular product as a sign of relevance, and accounting for things like how frequently it shows up at popular retail outlets. Thefind says it will hit a million visits next month, after only six months. It has some work to go in making consumers appreciate its benefits (relevance is difficult to showcase in shopping search, and semantics can be tricky; type in “dress shirt” at Thefind, and women’s clothing make up the top two results, with only the third result getting you to a men’s dress shirt from Jos A. Bank), but it looks to be on the right track. Thefind may be one to watch. It is raising its next round of capital.

[Update: See our update on Thefind, where we have revised our opinion on the company. Its results aren't as clean as we thought.]

Still, despite such efforts, peoples’ interests, motivations and tastes range so greatly, the concept of “relevance” may be more fleeting in shopping than it is in regular search. We’re more uncertain than ever there will be a single category killer in shopping search.

Wize.com, a San Mateo start-up, has launched yet another search engine for consumer electronics and other goods.

Wize’s promise hangs on a single, skinny thread: Its “Wize Rank” concept. Wize Rank is a numeric ranking of products (from zero to 100). Each product is rated according to how well users and reviewers judge it, along with the buzz it’s getting. It is a cute play on Google’s concept of “Page Rank.” The exact “Wize Rank” formula is proprietary, and so not being published. This lack of transparency may cause some people to dismiss it, but then Google’s algorithm has remained secret too.

It is very late in the game to be launching new engines like this. Wize focuses on research, and joins a full field of players such as Become and Retrevo. We played a bit with Wize, and it doesn’t let you buy products directly, but directs you which vendors are selling them for the lowest price. Here, it also has competition in Shopping.com, Nextag, Thefind.com and Pricegrabber. (Update: ViewScore, of Tel Aviv, Israel, is doing the exact same thing as Wize, a reader points out below, making even less original than we thought. Meanwhile, other sites are doing something similar for specific niches, i.e., movies, games etc.).

And yet Wize has gotten $4 million in funding from Mayfield Fund and Bessemer Venture Partners, a sign that the search engine sector — dominated by Google, and to a lesser extent Yahoo — is so profitable that its worth gunning for a success even if the odds of doing so are very poor.

Here’s the basic Wize Rank equation:

Wize relies on 1,042,806 consumer product reviews of 17,668 products.

Its weakness is that it remains subjective like most other rating sources (why does “buzz” matter, for example?). Each user has different needs. Wize.com says we should consider its method similar to Wine Spectator’s scoring. But Wine Spectator’s tasting scores are quite subjective. WS’s scores became popular because it was one of the early players to rate wine. Perhaps Wize can win some respect for its numbering system, in which case it could become quite a success (there is less chance of this happening, now that we’ve seen Viewscore). Here is an example of a camera that has received a score of 100:

Wize CEO Tom Patterson was an Entrepreneur in Residence at Mayfield last year, the company said.