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Plenty is being written about the woes of podcast company Podtech.

Now the company tells us it is taking on more debt, and will be making an announcement soon. This follows a recent $2 million round of fresh capital reported last week.

Podtech, a San Mateo, Calif. launched more than a year ago to create content that could be streamed to viewers, and planned to find advertising to insert inside of the content.

It was never clear what the business model was. The whole point about the new Web is that it is so cheap. You don’t need millions to produce content, or to distribute it — and yet Podtech initially raised $5 million to do so. we’re not surprised the company is now struggling.

Podtech, of course, is far from alone. Another company, Podshow, has raised close to $24 million. A wave of video content creation companies have subsequently launched this year. You’ve seen us become increasingly skeptical about the latest video companies, which continue to get millions of dollars of venture capital in backing.

Without a clear way to make money, Podtech is just the first of what will be many finding themselves backed into a corner. Perhaps that’s why Podtech’s public behavior has become odd. Techcrunch recently wrote a post, noting a change in strategy by Podtech to aggregate videos produced by others and to seek to find advertising for it all — using its own video player technology for distribution. Techcrunch was first to note the company had raised an extra $2 million from its existing investors U.S. Venture Partners and Venrock.

Yet several weeks ago, we’d actually heard about this funding from a source, and contacted the company for comment. Podtech’s PR person Valerie Cunningham said an announcement was pending, and suggested we talk with CEO John Furrier. However, Furrier proceeded to contradict Cunningham and said no money was being raised. He said a new round was being raised in fall. (See our resulting story, where we also wrote about Podtech’s new distribution strategy and its relationship with National Banana and RockinCat.)

Imagine our surprise when it it was later revealed that the internal funding had indeed happened. Furrier apologized last week for his evasiveness, explaining that he’d been in the process of raising a round (what he should have done was simply say “no comment”). Now he tells us the company is in the process of raising new debt, too, and will soon issue a press release about that.

There’s no point heaping more criticism on Furrier and Podtech at this point, because they’re under pressure and knowing the people working there, they mean well.

However, the company continues with a cloudy notion of where it is headed. Furrier’s post Friday describing the company’s “focus,” is anything but focused. Here is what he said:

7. focus of the company: 1) editorial content, 2) develop media franchises through signing (aggregation) of professional producers and in house development (our studio), 3) continue to be the leader in social media for our clients, 4) innovate on the social media ad models that we are developing, and 5) media technology platform

Unlike Techcrunch, we see little hope for Podtech going forward. It is neither focused on unbiased content creation, nor on developing an advertising platform to distribute video. If it is to survive, it must pick one or the other.

Another company, Odeo realized something similar, and actually gave its money back to its investors and took a different tack (we pointed to founder Evan Williams’ public confession about the matter here).

Podtech’s original model would have worked had it not taken venture capital. There’s plenty of business to be made producing marketing pitches for large companies, which it appears to have done with clients like Seagate and Intel. This is work that advertising/marketing agencies do, but there are plenty of these agencies, and you don’t need to be venture backed to do this. Podtech could have filled a niche in that industry, but now has taken too much capital to settle for this.

Meanwhile, how does it justify pumping $500,000 into special shows only to lose their anchors?

We should note that the whole relationship between Podtech, U.S Venture Partners and other portfolio companies is convoluted. In National Banana, US Venture Partners’ Steve Krausz invested in a company run by the husband of his sister. That company is now apparently distributing content through Podtech. Krausz told us his only experience investing in a media company prior to this was Palladium, a video game company that produced parodies on popular games (such as Pyst, in a parody of Myst) back during the late 1990s. The company struggled for some time. Krausz told us the company was sold for a small profit, but another source suggests it was sold at a loss. We’re checking public filings to verify. [Update: Here's what we've found. At time of sale, the deal was essentially breakeven to tiny profit, technically justifying Krausz' use of the term "profit." However, by the time U.S. Venture Partner's investors got the stock, many of them realized losses on it.]

But National Banana, with backing of $1 million, is run by Anthony Bettencourt, a former Entrepreneur in Residence at USVP who also has no media experience. Krausz says the project is an experiment, and worth doing given the huge changes going on in the media world. That’s fair enough. But if you want to do that, you should have a clear strategy about how to do so.

Podshow, a company that promotes podcasts and finds sponsors for them, has raised $15 million more in a second round of venture capital from its big-name investors, following up on $8.85 million in a first round last summer.

Dan Primack has the scoop.

This is, frankly, surprising, because the business model still hasn’t been proven for this medium. This is a lot of money. There are other players out there, too, like Odeo (funding from Charles River & others) and Podtech (raised $5.5M from USVP & Venrock).

But then a number of investors see a land-grab going on here, an effort to be the primary destination where thousands of individual musicians and other content producers will come to provide their wares, and where millions of listeners will want to download them. We just saw Digg founders launch Revision3 to go for this market in the video area. And like Podtech, Podshow is working with bigger companies — in PodShow’s case, mainstream media companies — to help them produce and distribute podcasts. PodShow is also buying up other podcasting companies, so the cash could be meant for buying up more sites to become the biggest player. Its programming is extensive.

Still, we agree with Dan’s skepticism, as the whole premise of the Revision guys (they raised only $1M, see link above) is that it really cheap to launch these sorts of services. According to Dan:

I just struggle to see venture-type [return on investment] for most of these deals, unless they can be flipped before Yahoo, Google, etc. put down their tall glasses of content Kool-Aid. This isn’t to say that the podcasting market is inherently unprofitable, because it isn’t. VC-backed companies, however, are supposed to produce something a bit more exciting than respectable margins.

Some VCs agree with me, but it is clear that many others do not. Case in point is PodShow inc., which recently raised $15 million in Series B funding. This follows up on an $8.85 million Series A deal from last summer, from Kleiner Perkins, Sequoia Capital, Ram Shiram and Jerry Newman. All four are back this time around, but an undisclosed lead came aboard at a major pre-money valuation step-up.

About a year ago, Dogster, the social networking site for dogs, made some eyebrow-raising news: It had turned profitable.

Now Dogster has raised a round of $1 million from a group of accomplished “angel” investors, to help it step on the gas.

In talking with founder and chief executive Ted Rheingold, we began to discover the real magic behind the site: It is all about the dogs, but then it isn’t really. Sure, dog owners are flocking to the site so that they can post pictures of their dogs, and check out the profiles of other dogs of the same breed, or of other owners in their neighborhood.

But more interestingly, owners are pretending they are the dogs, and writing little diaries, and the diaries are often becoming more about themselves, as seen through their dogs eyes. Take, for example, the “dog of the week,” a dalmatian/labrador retriever (pictured here) named “TK.” You can see all kinds of things on his profile, including character traits, hobbies, and you can also check out his diary. And this is where it gets interesting. As is typical elsewhere on the site, TK’s diary quickly becomes more about “Mommy” or “Daddy,” less about TK. Under pretense of their dogs doing the talking, owners are expressing themselves in all kinds of ways that they wouldn’t normally. See snippet below by the owner of TK:

In fact, owners may find it easier to say things they wouldn’t be able to say on dating sites. Rheingold is seeing all kinds of things — for example, one post was about a dog whose Mommy came home after something called a “date.” The dog said he didn’t know what a date was, but that Mommy said it didn’t go very well, this date, and so the dog said he stayed by her side and tried to make her feel better.

Now that Rheingold has the recipe, he wants to extend his empire, beyond Dogster, and Catster (his second site, also launched in 2004) to cover every pet — horses, birds, fishes, reptiles, you name it.

In April, Dogster and Catster combined raked in $100,000 revenue, a new milestone, and enough to start hiring more people. A three-man team in 2004 has already grown into a ten person team, and more hires are in the works.

It also gave Rheingold confidence to go out and raise cash. He wanted to be sure he had a sustainable business before taking on outside money. While he wants to avoid hiring 16 people immediately and taking $3 million — like some venture capital firms wanted him to do — it is time to pick up the pace.

The lead investor of this round, Michael Parekh, will join the board. Other Dogster investors are Joshua Schacter (of del.icio.us./Yahoo fame), Adam Beguelin (of Truveo/AOL), Michael Tanne (Wink), Jim Young (hotornot), Mike Jones (Userplane/AOL), George Sarlo (Walden Funds), Frank Caufield (Darwin VC), Aydin Senkut (of Google, now Felicis Ventures), Robert Simon (Alta Partners), Brad Feld (Mobius Ventures) and Jeff Clavier (SoftTech VC).

Rheingold says most dog and cat owners — 63 percent of households have a dog or cat — don’t know about the sites, and so it’s time to do some marketing, another reason to take cash. There are more than 70 million dogs and 90 million cats in the country. It is a $36 billion industry, says Parekh.

Dogster served 17 million page views last month. It has 290,000 dog and cat members, and is seeing a steady 7 percent monthly growth in these numbers, Rheingold said.

It is making money through creative advertising packages. Disney paid for a campaign around Lady and the Tramp, and at first said it wanted to buy a $13,000 banner ad. Rheingold warned Disney it might not be happy with such an ad, because it didn’t mesh with other parts of the site’s main activities. For a banner to be appreciated, he suggested, Disney might want to advertise all over Dogster’s site, from newsletters, to the messages Dogster sends to new members — and also let members talk with Lady and with Tramp — all so that the Lady and the Tramp branding could be better understood in the overall context of the site. Disney agreed. There was even a flat-screen TV contest. After the experience, Disney pledged to make the Dogster site a preliminary campaign for all dog-related movies, Rheingold said.