VentureBeat

When we broke the news of peer39’s initial $3 million funding in March, we reported that the company was working on a platform to use natural language processing for advertising. Less than six months later, we’ve learned that the startup has taken another $8.2 million.

The company, although trying to remain secretive, tells us it will soon be ready to launch. Peer39 combines semantic technologies with NLP to produce “groundbreaking algorithms that boost ROI for the industry,” according to a spokesman.

Back in March, investor Ed Sim of Dawntreader Ventures said on his blog, in response to our article, that the company mines unstructured data to boost conversion rates. We’re assuming it will attempt to make sense of the meaning of content on web pages, thus allowing advertisers to target ads more efficiently.

Another ad platform that recently released a so-called “semantic” advertising product is the United Kingdom’s Ad Pepper Media, which claims its iSense product can analyse every word on a web page to identify the overall subject, and then deliver an appropriate ad.

Google can do nearly as much with AdSense, though, so we think there might be more to peer39’s plan — in other words, going beyond word meaning toward sentence and overall story meaning.

Another clue might be the new website Twine, which also works with NLP and semantic search. Founder Nova Spivack told us recently that the company could potentially leverage its technology to provide users with highly targeted ads.

Twine is in the business of information collection — so it would have a large amount of the user’s personal info to work against. If peer39 wanted to do the same thing, it would need to be placed on websites where users directly interact with data.

That could be anything, from search engines to email clients. But it’s social networks, in particular, that are in desperate need of this kind of technology if they want to reach high valuations.

Of course, we’re just speculating.

The $8.2 million round of funding was led by Warren Lee at Canaan Partners, who will join the board. JPMorgan also participated. The previous round of $3 million came from Dawntreader Ventures.

Lending Club, the Sunnyvale, Calif. lending service where people borrow and lend money among each other, bypassing the banks, and theoretically getting better rates, said it has raised $10.26 million in a first round of financing.

Canaan Partners and Norwest Venture Partners made the investment.

The deal makes the the social lending industry very crowded, and the funding is a large amount for such a young company with little track record — especially when there’s so much competition (see our coverage). Prosper and Zopa both do something similar, and have raised much more cash. CircleLending, Wonga and GlobeFunder are other players (see coverage here).

However, Lending Club was first to build an application on Facebook, which it says has more than 13,000 Facebook users. It says $750,000 in loans have been made. It wants to use the money to expand beyond Facebook.

Lending Club’s investors say the market is still in its earliest stages: “The multi-billion dollar consumer lending market is just beginning to leverage the power of social networks,” said Dan Ciporin, a venture partner at Canaan.”

Lending Club is available to individual borrowers with credit scores at or above 640. Using Lending Club, borrowers can apply for personal loans of $500 to $25,000 to be funded by individual lenders. To date, lenders have funded 80 percent of all loan requests, the company says.

The company says it uses pre-set criteria such as credit worthiness, being friends on Facebook, sharing network affiliations, belonging to the same groups or by geographical location.

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Associated Content, a company that delivers all kinds of information online, from movie reviews to tutorials about how to fix a kitchen sink disposal, has raised a $10 million in a second round of funding.

Associated Content is notable because its branding is all but unknown, but it is drawing five million unique users and 12 million page views monthly — almost entirely by tinkering with its content so that it appears high in search engine results. The site has almost no return visitors based on loyalty. The traffic data comes from the company’s chief executive Geoff Reiss, and is based on his reading of Google Analytics.

CEO Reiss tells VentureBeat the site is using a mixture of “best practices” for search engine optimization (SEO), such as labeling articles with various tags on its pages to better bait the main search engines like Google. Timing of the news, which follows on the heels of an announcement by news site NowPublic that it had raised $10.6 million, is purely coincidental, he said. Canaan Venture Partners, a Silicon Valley venture capital firm, led the investment in the Denver/New York-based Associated Content. Existing backer Softbank Capital participated, as did Tim Armstrong, a Google executive. The company raised a $5.4 million first round last year.

Reiss told VentureBeat he does not see NowPublic as a competitor. News is only one component of Associated Content’s offerings. AC draws content from specialists in any field, and content can be text, audio or video. While it has fewer contributors than NowPublic (70,000 compared to 118,000), AC’s contributors go through a more rigorous sign up process, and tend to stick around longer, he said. AC has more traffic. AC’s content focus is extremely broad, in our view, and its difficult to see how they will establish loyalty through branding. Reiss said establishing such branding is a goal of the company going forward.
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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.