VentureBeat

Online ad networks have been getting a lot of hype over the last couple of years. But many of these companies have been relying on sales deals with brands and ad agencies to build revenue — and not relying so much on measurable, reliably reported customer responses to ads.

Now that the general U.S. economy is doing relatively worse and brands are cutting back on their advertising budgets, ad rates are staying flat — or dropping. Pubmatic, a company that sorts and places the most valuable ads onto web sites from across competing ad networks, has released a monthly report today, showing that online ad rates for publishers have basically stayed level over the last three months.

(You can find more details from the report here.)

1. Yandex, Russian search engine, grows quickly
2. Opus launches hedge fund in New York
3. Matrix goes to China
4. Dogster takes $400,000 in financing
5. Semantic search engine Powerset raises $2M
6. Pubmatic, draw ads from all networks
7. Boobik, the Twitter clone, but for sex
8. Branson taking global warming to space
9. Oversee.net gets $150M to monetize domains
10. Google’s Palimpsest hosts terabytes of raw data

Yandex, Russian search engine, grows quickly — Yandex did more than a million billion searches last month, which is comparable to AOL and Ask. It is was the ninth largest search property worldwide, according to comScore. Meanwhile, Yandex revenue has doubled for the past five years, and is on target for $140 million in 2007.

PubMatic, the site that helps publishers draw ads from the highest paying networks, expands — Before, it drew ads from a handful of networks. Today, it said it can draw ads from any ad network. We haven’t tested its claim, but that’s quite a move.

Branson might save us from global warming, by taking the warming to space — There’s a great line by Branson in the stories (here and here) covering the vision of the Virgin Galactic project: One day we might be able to use space for energy production. While I believe aviation has to get more carbon efficient, seemingly benign industries like IT have outpaced aviation in carbon output. [One promise of a commercial space industry is] the ability to launch low-earth satellites that could literally take some of the heat out of the planet, by serving as a repository for information technology.

Boobik, the Twitter clone, but for sex — The squeamish shouldn’t click to this site; there’s a large number of people exhibiting themselves in images.. (Don’t go there if you dont’ like explicit images.)

Oversee.net gets $150 million to monetize domains — The Los Angeles company got the money from Oak Hill Capital Partners, a Silicon Valley private equity firm to help it monetize domains for domain owners.

Google’s Palimpsest project to host terabytes of data — Google is accepting the data sets and making them free. Wired has some details.

Opus launches hedge fund in New York — If you’re a Silicon Valley venture capital firm, and seeing all the profits being made by the hedge fund guys, its tough to move into hedge fund or other money management areas because your limited partners preclude you from doing so. So Opus Capital, of Menlo Park, has done it a different way. It has quietly launched a fund in New York, but says it hasn’t devoted any of its resources from its current fund. The firm didn’t want to talk about it, but when pressed, a spokeswoman explained that Opus Select, as the New York operation is called, was “started by two industry veterans whom we have known for many years, have set up their own operations and are making use of our financial and back office infrastructure.” Opus, you’ll remember, has a history of itchy feet. It was the group that split off from Lightspeed Venture Partners.

Matrix goes to China — Another venture capital firm making moves is Matrix, which like other successful firms Sequoia and Kleiner before it, is finally moving to China. It is raising a $250 million for a first China fund, according to a regulatory filing.

Dogster takes $400,000 in financing — Dogster, the social network for dogs and cats, has raised $400,000 in bridge financing. The company has long been around break-even, and with the economy teetering, what better time to take a little cash to keep you out of the dog house.

Semantic search engine Powerset raises $2 million — The bridge loan is designed to tide it over until it officially launches its site in March. The company has been testing searches using the structured online encyclopedia Wikipedia, and Powerset will apparently launch with that limited focus. We’ve covered the company before. Investors were disclosed.

 (Update: Part of the financing was debt; we’ve updated accordingly)

The Rubicon Project, a startup that wants to streamline the process of dealing with multiple ad networks, has taken $6 million in venture and debt funding. It plans to start private testing of the product next week.

The company’s fully-automated software solution will be a platform designed to help publishers sell their unused ad space to the highest bidder.

The company is being quiet about plans, saying only that its service gives any website “the most complete access to the total available advertising market.”

CEO Frank Addante got his start before the dotcom boom with L90/admonitor, a startup later sold to DoubleClick. At the time he started in the internet ad industry, there were only 15 ad networks, he aid. Today there are over 300 to deal with.

As that number continues to grow, publishers find it ever more difficult to choose the best network to use at any given moment. “Websites need to be able to connect to all the funding sources, but that takes some pretty sophisticated technology,” Addante said. “What we’re really doing is giving these websites more access to the advertising markets, and giving them the smart technology to do the work.”

A startup called Pubmatic, which started testing a similar service two weeks ago, with 400 publishers already signed up, helps publishers pick the best ads for their site from a handful of the largest networks. The Rubicon Project seems likely to play to a more sophisticated set of publishers, who want to have access to every ad network possible.

Still, big challenges remain for both companies, because ad networks don’t like to share their data, and so having real time oversight of the ad pricing and other terms across networks may not be possible

Based in West Los Angeles, the Rubicon project will be launching its private beta service in October 8th. Of its $6 million in funding, $4 million was provided by Clearstone Venture Partners, with the remainder coming in debt from Square1Bank.

Here’s the latest action (updated):

Google buys stake in China’s Tianya, launches two Chinese social sites: Google has invested in Tianya, a Chinese online community of twenty million registered users. A Google spokesperson confirmed the investment with VentureBeat, but didn’t say how much of the company it now owns. Reuters has more. The two companies also announced the joint launch of two services that compete directly against offerings from dominant Chinese search rival, Baidu.

One service, called Wenda, is similar to Google Answers Russia, which launched earlier this year. Remember, an earlier version of Google’s service couldn’t handle stiff competition from Yahoo Answers in the U.S., and shut its doors last year (that version of Google Answers charged questioners, and Yahoo’s doesn’t). Google Answers Russia has developed a more complex point system in which only the top answerers receive a fee. According to China Web2.0 Review, Google Answers China compares well against the answers service provided by Baidu, the dominant Chinese search company.

The other service, Laiba, is an online community that combines a message board and social networking features to help Chinese users connect with friends and share content.

Google tells us that both Tianya sites will be “powered by Google technology” but “are Tianya services, not Google services” — which could be a way for Google to have Tianya do the dirty work of censoring its Chinese users.

Google to invest further in China? — The above news follows reports last week that Google Inc. was planning to acquire one or two Chinese companies and invest in up to five more over the next year as part of efforts to gain ground on rival Baidu.com Inc. in China. “Over the next year, Google will acquire one or two companies in China, and invest in four to five companies,” said Kai-Fu Lee, president of Google China, quoted by PC World, citing a Chinese report. The report didn’t disclose specific company names. Google has already invested in Xunlei Networking Technology, a Chinese peer-to-peer file sharing Web site, and has a mobile search deal with China Mobile Communications, as well as a search deal with Sina Corp., China’s most popular portal.

Google’s gDrive may be alive? A YouTube video allegedly made by a Google employee suggests that Google has developed but not released a service that would allow users to store large files and other data using Google servers. More on this rumor at the blog Google Blogoscoped.

Frucall, the mobile phone that lets you compare prices while shopping, provides automated updates — We noted the company’s comparison shopping service previously. It has added a few new features, including wish lists, and an automatic alert when an item you’ve previously searched for is listed somewhere at a better price.

PubMatic latest online advertising company for blogs and other sites — PubMatic may be a useful service for small and medium-sized publishers who want to maximize the revenue they get from ads. PubMatic tracks four networks, including Google, Yahoo, Komli and ValueClick, and conducts an auction among them, bringing in the highest-paying ads to run on the publisher’s site. This is difficult to do, because most networks don’t provide that data real-time, but PubMatic tries to check as often as it can. The company also looks at the layout of the ad space, environment and other factors (such as color of background, time of day and geographical location your reader is coming from) on your site, and tries to pull in the best ad to match that setting, said co-founder Rajeev Goel. The four networks offered aren’t very high-paying networks, but Goel said he wants to add more networks.

Co-founders Rajeev and his brother Amar, have raised a seed round Draper Fisher Jurvetson and Helion Ventures. Rajeev is based in Menlo Park, Amar in Bombay with the company’s development team of 15. The company also has a small office in New York.

Notably, the brothers were behind Chipshot.com, a Web-based maker of customized golf equipment that soaked up $50 million in venture capital during the Internet bubble, and crashed in 2000. Rajeev said that company was profitable briefly before it got caught up in spending most of its millions on advertising. Since, the two have gotten experience working at places like Microsoft and SAP. They’ve invited 100 publishers to test the product, and only twenty or so places remain, Rajeev said. I’ve put a few more thoughts about so-called “remnant” advertising networks in the voice post below.