VentureBeat

In April, we wrote about Montreal company Weblo, and we called it somewhat of a pyramid scheme.

It lets you buy virtual domain names, for example www.LosAngeles.com for a few bucks (even though the domain name is owned by someone else on the real web), pretend you own that city and then sell off properties there to the fool who comes along to bid on it. Your incentive is to recruit others to do so. Everything in the real world exists in this virtual world of Weblo and is for sale.

Apparently, some investors have differed from our skeptical view, and think there’s real value in such a site. It got $3.3 million in a second round of VC funding from VantagePoint Venture Partners.

Weblo’s original funding, which we hadn’t reported, came from Richard Rosenblatt the co-founder, chairman and CEO of Demand Media and the former Chairman of MySpace.com and CEO of parent company Intermix; Fred Harman, the managing partner of Oak Investment; Matt Hill, the chairman and founder of eForce Media; and William Woodward, the managing director and founder of Anthem Venture Partners.

According to the release:

There are no 3-D fantasies in this world; just the real world and real money are involved. Weblo is about a virtual world where thousands of people are investing real money to buy virtual cities, states, properties and celebrities. A virtual copy of every real city, state and property is up for sale with over 9,000 cities worldwide and 4,000 in the United States being sold.

An owner of a city or state will collect a percentage of all transactions, including memberships, within their territory. California sold for $53,000 in real money, Texas Sold for $23,000 and New York State sold for $19,350.

Aside from owning properties, cities, and states, the 36,000 Weblo users are also managing celebrity profiles of their favorite stars for free and earn money in doing so.

In response to our original article about this being a pyramid scheme, the company responded saying it it does not consider itself one. Here’s what the spokesman said:

There is no downward link and the governors and mayors do not recruit members. Weblo is more about paying our members for user generated content. That is the market we go after.

Bambi Francisco, the former MarketWatch columnist who left last month amid a stir to form her own video company, has finished raising a round of capital.

The round includes Richard Rosenblatt, the former chief executive of Intermix, owner of MySpace, Georges Harick, a former Google engineer who helped develop Adsense, and Matthew Hill, early investor of Shopping.com and, as expected Peter Thiel, former chief executive of PayPal. She is keeping the amount confidential, but we expect it is at least several hundred thousand dollars.

Click on the image above for a link to a video showing Bambi talking about her company Vator.TV with Rosenblatt, after he steals the mic from someone else (Andy Plesser, of Beet.TV).

Entrepreneurs will be able to pitch their ideas in video, Powerpoint or other document. They can then upload it to Vator.TV, either password protected (where chosen investors can view the pitch) or publicly. In other words, a video form of RaiseCapital.com (see VB coverage). The site will soft launch next week, with a more formal launch later on. Early videos will feature Francisco and Thiel.

Rosenblatt is chief executive of Demand Media (see our coverage), which is buying up generic Web sites and searching for content to fill them up with. He’s also been marketing the .TV domain category, and Francisco said Vator.TV will likely be participating in that, though specifics haven’t been agreed. She said Rosenblatt is a significant investor.

Francisco said she was able to access Amazon’s EC2 offering, which will lower the costs of streaming the video.

Demand Media, the company pursuing the audacious strategy of buying up a bunch of generic Web sites that have no staff generating real content of their own — to throw advertising on them — has raised another $100 million.

In May, we reported it raised its first $120 million. Lately, though, the company appears to be buying content as well, including acquring Hillclimb Media, a producer of niche web sites.

The chief executive is Richard Rosenblatt, the former chairman of the company that ran MySpace. No doubt he has grand expectations; nothing to lose from swinging for the fences. Among the half-dozen acquisitions in recent months, Demand Media also acquired eNom, which claims to be the second largest domain name registrar.

The financing was co-led by 3i, a London based public venture capital firm with offices in Silicon Valley, and Oak Investment Partners. Spectrum Equity Investors also participated in this round.

Rosenblatt is also chair of an Arizona search engine marketing company, called iCrossing. There too, he has received lots of cash ($15M) from Oak.

Brad Greenspan, a former chief executive of the company that ran MySpace, has been just as active, if not more so.