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Glam, the controversial woman’s content and ad network run by Samir Arora (pictured left), is raising between $50-100 million in cash, and is expected to finalize the amount soon, we’ve confirmed with sources.

Along with that will be up to $100 million in debt, but the debt will be raised over the next year.

The news is in fact not new. We first reported Glam’s move to do so back in August, when the company emerged reporting a blitz of growth and boasting it was the fastest growing site on the Web. But we’re getting more details confirmed, as follows.

The company had originally sought to raise a mix of cash and debt, for a total $200 (see its prospectus, page 4), and that’s apparently still part of the plan. (Some reports earlier today didn’t account for the fact that Glam is also raising debt, and wrongly suggested Glam had lowered its sights).

Glam has created consternation in the industry. Glam is selling ads for scores of fashion and beauty sites, and sells ads for some of its own content sites too. Older competitors such as NBC/iVillage have looked on as Glam’s network has shot past their own, in terms of page views and unique viewers — though Glam doesn’t own most its sites outright but merely sells the ads on them. Glam has picked off top sales executives and created considerable animosity in the process — in fact, we’re hearing another big hire is about to be announced on Monday: a Yahoo top executive and holder of numerous Yahoo patents, in charge of display advertising technology. Glam has boosted its direct sales team to near 50, up from 5 last year. The Yahoo executive is designed to help Glam expand its technology platform team in Silicon Valley.

Glam’s chief executive Samir Arora (pictured above in January’s Folio’s magazine) is quite the slick salesman, habitually wearing pink, and with a penchant for French fashion shoes. His detractors paint him as an upstart whose network is more smoke and mirrors than the juggernaut he paints it out to be. See the recent Folio article here, and our pieces here and here for more on Glam’s model and the controversy around it.

Some reports suggest that Glam has sought to raise money at a near $1 billion valuation, but our sources have never confirmed that figure. We’re hearing Glam consistently got feedback during fundraising that it could raise money at a value of between $350 and $500 million, not more. Even that is high, considering Glam is mere four years old and was valued at $150 million a year ago. (Though IGN, a men’s/gaming site comparable to Glam in size, was purchased by Fox for $650 million in 2005).

Glam’s existing investors, including DAG Ventures, Draper Fisher Jurvetson, Accel Partners, and WaldenVC are all participating in the round, we’re told. DFJ’s Tim Draper is adding to the hype, going around saying Glam is the fastest growing company “on the face of the earth,” faster than his previous companies Skype and Hotmail.

We’re also hearing Glam has an annual revenue (run rate) of $40 million, and is aiming for $80 million or more this year. Valuations are tied to revenue, and media companies are typically valued at three or more times revenue, but rarely as much as ten. Glam lately has been trying to push itself toward a social network, which could give it a higher value than an traditional ad network because of the community that builds around it (though the jury appears to be out right now on how vibrant Glam can build a network, when much of the community lives around the individual blogs it represents).

The value question will also be dictated by whether Glam can claim “ownership” of the 44 million unique visitors it says it has globally. Traffic measurement company Comscore has decided to designate these visitors to Glam’s camp, even though Glam doesn’t own the sites of its network outright. Glam argues Comscore is correct to designate those uniques to Glam, because Glam retains an exclusive ad relationship with most of its network blogs (though it is true that it doesn’t have exclusive relationships with some of them).

See the table below, which shows the value of various companies in the network area, and the value per visitor, called the “visitor multiple.”Assume Glam raises money at $400-500M level, with monthly global unique visitors (to its network) of 44 million, that would give it a “visitor multiple” of 10 to 12, much lower than the median of 25, or 22 if you factor out the outlier, Facebook. But still, I think this is what Glam would like to argue and the question is whether investors will accept that (i.e., that Glam is a true network, and so should be compared against these other sites).

Finally, we’ve heard that Glam received an offer to be acquired a few weeks ago, in the range of $350 to $500 million by a large media company, but that it decided to go it alone instead.

One reason for the excitement around Glam is its sector’s growth. Women’s sites, along with politics, was the fastest growing audience categories in 2007, according to Comscore. And here Glam has doing better than the norm. Glam grew at 213 percent, while iVillage grew at 27 percent –again, that is, if you include both Glam’s and iVillage’s directly owned sites as well as their ad partner network sites.

Glam Media, the controversial Silicon Valley company that says its network of woman-oriented sites is the fastest growing on the Web, has released a new set of features designed to boost traffic even more.

One is a Digg-like feature for recommending stories, only designed for non-geek woman. Call it the anti-Digg.

See our earlier coverage of the company, and the notable follow-up piece in Forbes about the company. What makes this company so interesting is that promises to be a raging success if it gains a certain critical mass in time — by signing up enough bloggers and ad deals that it can sustain itself after a its rapid buildup. Or, if the steam runs out of the economy, and spending on advertising dives, Glam could just as easily go down in flames. It is about to finish raising another $200 million.

Today, at the DEMO conference in San Diego, the company has released three more features. First is a new navigation bar, to make its expanding empire — now numbering 400 publishers — more navigable. The navigation bar organizes all content items according to whether they are articles, blogs, photos, quizzes, products or part of a specific theme area with its own channel, for example “health and wellness.” A blog item about health would fall under this channel, but would also fall under “blog,” for example. Glam will soon introduce video as a content type.

The move is significant because the content is all indexed and processed with tags, so that it can be better searched, including by search engines — all part of Glam’s effort to make its content rise higher in result rankings to give it more traffic as it tries to distance itself from competing networks like iVillage.

Second, Glam has introduced a “Story Box” feature, or a widget that shows what other “hot” content exists around the Glam network is relevant to the page the user is looking at. Glam’s Samir Arora says the box has been tested, and has already produced two billion ad impressions a month.

Finally, it has unveiled something called “Curate It,” which lets users recommend an article or other piece of content for others, similar to how Digg or Yelp let users recommend news or restaurants. However, Glam is holding to the reins, by picking professional curators to guide the content-ranking process.

Here’s how it works: Regular users can being curating, and then work their way up to get more status. As they do, their votes count more. They work themselves up from curator, to senior curator, to power curator. At that point, like eBay does with its “rising star” system, Glam steps in and anoints someone with “executive curator” status. Finally, the top step is “curator-in-chief.” See images below. In another twist, Glam lets users choose which curators they like, and which ones they don’t. That way, Glam can see which curators are maintaining a following and can reward them with promotions, accordingly.

Users can take their curates and distribute a “curate badge” as a widget on their site, on Myspace, Facebook, Glamspace, and so on.

updated

In an era when Web advertising networks are red hot, Glam lays claim to being one of the hottest.

Focused on gathering up female-oriented Web sites, and then selling advertising on their pages, Glam says it is the fastest growing property on the Web, and is about to sign a whopping $1 billion advertising deal.

But Glam is becoming a magnet for controversy. While investors appear ready to invest at high valuations (see our past coverage), Glam has also sparked ire from jealous competitors, who claim it is a sham. They say Glam is not a destination site, and just a network. Glam, meanwhile, says it never claimed to be a destination site — but spins the message differently: It says it has the largest “reach” among women on the Web.

To start with, Glam is now getting 20 million unique viewers, up from 782,000 about a year ago – a faster growth than even MySpace during the frenetic year before it was acquired by News Corp. Comscore, the traffic measurement company, backs up Glam’s claims. Now, Glam also is raising $200 million more in venture capital, and some insiders say Glam could be valued at $600 million or higher – something VentureBeat first reported earlier today. [See the full confidential memo here. Update: The memo is an early draft. We're told four banks are now on the deal, including Allen & Co., Deutsche Bank and Credit Suisse.]

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Tomorrow, Glam will announce a new deal with Google to provide Web results on Glam’s Web sites. Most significantly, however, Glam is about to close a $1 billion-plus advertising deal for its sites, VentureBeat has just learned. Glam will get between $500 million and $800 million in revenue from the deal over the next three years. We’re told negotiations are still under way, but that there have been at least two bids by major advertising companies.

All rosy, right?

Well, Glam has fierce critics. VentureBeat has spoken with at least three of its competitors. To them, Glam isn’t a Web property, so much as an ad network. Glam progress, they say, is driven by smooth, dapper chief executive Samir Arora, who tends toward ping-red shirts, Italian suits and French shoes — and has a riveting marketing spin. If you look at the sites Glam claims to “own,” they look very different from the sort of high-end professional female demographic Glam’s Arora likes to associate Glam with, these critics argue.

We obtained a copy of Glam’s Comscore breakdown of sites; it’s shown below. Note the sort of sites that show up prominently. Half of Glam’s page views, it turns out, come from MyYearbook, a social networking site. Some 6.5 percent come from Meez, an avatar site. There’s Dogster – a social network for dogs — and other questionable sites (see red arrows in graphic below). Take Free-Beauty-Tips.com, for example. At first glance, the site looks like a spam site. It features lists of links to articles loosely related to the theme of beauty and tips. The site’s name, together with links, allow it to feature highly within Google’s search results for “beauty tips”; it therefore draws all sort of traffic. Moreover, Glam has reportedly guaranteed sites such as Meez $200,000 a month in order to have its business. Says one critic, an anonymous competitor to Glam: “To me, Glam is Boo 2.0,” he says referring to Boo.com, the hyped fashion site of the late 1990s that crashed and burned after the Internet bubble burst.

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Competitor iVillage/NBC was until last month the largest woman-oriented network, until it was overtaken Glam, based on the number of unique visitors. IVillage executives say Glam’s claim that it enjoys $20-$30 CPM advertising rates on its core properties is bogus. Glam’s Arora, who says he can’t say much publicly these days because of his fund-raising mode (there are SEC regulations that govern what you can say) has insisted in past interviews that Glam is indeed getting those high rates.

Sugar Publishing and Federated Media Publishing (disclosure: Federated handles much of VentureBeat’s advertising), meanwhile, are about to announce the launch their own network to compete with Glam for its business, VentureBeat has learned. The network will be called the Sugar Network, and will be powered by FM, two inside sources said.

With Boo.com during the first Internet boom, there were clear signs of hype. The site itself was fraught with problems.

With Glam, however, it’s much harder to claim it’s a sham; it’s pulling in major revenue. One competitor begrudgingly conceded Glam appears to be doing a great job building a network. That’s what makes this an interesting story. A site network is a powerful concept, but also can be amorphous. If you turn a network into one like Google’s – where advertisers have an incentive to do business with you because you are the biggest, and offer the best targeting technology – then your lead can snowball. This is the so-called “network effect,” something that eBay perfected. However, right now, it’s too early to tell how vibrant Glam is. It doesn’t actually formally own the sites it has in the network. These sites can leave for other networks, usually with a notice of between a few months and a year. One site in its network, Kaboodle, for example, was just sold to Hearst, and so Glam will lose the right to sell ads exclusively for Kaboodle. Glam’s momentum, therefore, may be fleeting if it can’t convince sites in its network to stay.

One thing is clear. Glam’s Arora knows how to sell. He has founded and helped sell multiple businesses, including NetObjects. Arora’s message is slick. He’s offers sites a technology edge, with new search and advertising targeting technology, which we’ll get to in a minute. He also responds to critics of the sites in his network. MyYearbook, for example, features quizzes that produce highly valuable results for advertisers, he says. Quizzes engender a depth of engagement with readers that is core to Glam’s model, Arora says. He learned the value of quizzes from his time as a board member at Tickle, the dating site that was later sold to Monster. MyYearbook also is popular among young woman, part of the Glam’s targeted audience.

As for Free-Beauty-Tips.com, Arora says Glam bought it not for the links, but to acquire the skills of the site’s owner, a specialist in search engine optimization (SEO). Making the sites in Glam’s network more sophisticated about SEO is a service Glam wants to offer the sites, Arora said. Moreover, Free-Beauty-Tips is a recent acquisition, and Glam will be rolling out real content on that site by the end of the month (Glam showed us screenshots of the new design). Arora also insists the existing site is not a link farm, saying the links go to real articles. On Arora goes, down the list of questionable sites, explaining the logic behind why Glam has taken interest in each one of them (Meez, the avatar site, is desirable because it has young readers, and advertisers tell Glam they want to reach the “Y” generation, Arora explains). Finally, he makes no excuses about owning business of sites that may not be focused on woman. He plans to diversify Glam further in the future.

In most cases, Arora says, Glam has exclusive agreements in place to sell 100 percent of advertising on the sites in its network. The same isn’t true of competing sites like iVillage. IVillage claims it is the largest “destination” site for women, but that may not be true. IVillage lists Sugar Publishing as one of its sites, and Comscore counts Sugar’s traffic as belonging to iVillage. However iVillage neither owns Sugar nor runs 100 percent of its advertising. In fact, Sugar Publishing currently runs no advertising from iVillage. We contacted Brian Sugar, owner of Sugar Publishing for comment. IVillage ads will start showing up next month, he said, because the relationship with iVillage was agreed to only recently (last month). However, even then, Sugar’s sales staff will control major sponsorships, Sugar said – a strong indication that Sugar really shouldn’t be considered part of iVillage’s traffic. IVillage also appears to rely on Fastclick and Doubleclick to serve ads on some other sites. IVillage, reached for comment, said it controls 100 percent of the ad-sales on the sites (see partial list below). However, we’re told it does not control the business of Care2, BooksRags and TestCafe. Like Glam, IVillage has odd properties, such as Astrology.com, which makes up 2.5 million of its uniques; and iWin.com, a promotion/coupon site. Other promotion and questionnaire sites include Promotions.com (just bought by TheStreet, so iVillage will lose that property from its Comscore data), Smartsource.com, Webstakes, and TestCafe. IVillage, for its part, says these are all useful properties.

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Meanwhile, Glam’s Arora says Glam will succeed because it has a technology edge, stemming form its Silicon Valley roots. It has developed new ad-serving technology for its 350 sites, which allows advertisers to not merely target Glam’s multiple woman sites, but also to target sites depending on the depth of engagement. Entertainment sites, for example, will have less engagement than certain social networking sites, where woman are performing daily tasks. Moreover, Glam can tell a sporting advertiser which Glam sites are focused on sports. Finally, if ads aren’t performing very well (in other words, woman readers aren’t clicking on them), those ads will be retired, and be placed on better performing sites. While other networks talk about having such technology, Arora says no other network has the woman-focused Web properties Glam does. Finally, Glam is launching a search widget (see details here) for sites so that users can search for content related to that specific site. For example, if it’s a beauty site, Glam lets users search articles within Glam’s beauty channel of sites. It is partnering with Google to offer full Web search. Glam has said it has an average CPM of $8 to $15 on its network sites, and about $27.5 CPM on the sites it owns outright, or those on Glam.com.

Finally, Glam is winning a poaching war. Jennifer Salant left iVillage/NBC to lead Glam’s business development efforts. Glam also just hired Karin Marke, head of MySpace’s west coast sales, and also hired Myspace’s lead performer of East Coast sales. Glam has poached execs from IAC, three from iVillage, and others from AOL, Elle, CNET and Conde Nast.

Finally, below is the traffic for PopSugar, the site that is about to launch its own ad network in conjunction with FM Publishing.

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Mike Arrington at Techcrunch has just posted a critical piece about Glam, making many of the same points of the critics. Numbers are being thrown around that make this all a big game of smoke and mirrors, and every player is wrapped up in this. Note, for example, that Sugar claims 4.5 million unique visitors a month, as reported by Techcrunch. Brian Sugar tells us these numbers are based on Google analytics. However, Comscore, which is what advertisers rely on, shows a much lower number.

Other reading: See NYT tonight on iVillage challenges.

Glam Media, the Brisbane, Calif. network of women’s online lifestyle, fashion and other blogs, said it has overtaken iVillage to become the number one women’s Web property.

It is also the fastest growing of the top 100 U.S. Web sites, according to traffic data to be released tomorrow by ComScore for the month of May.

Glam’s network had 17.3 million unique readers during May, compared to iVillage’s 17.1 million readers, according to the data. The rise of Glam Media has been quick. The four-year-old company fell into its groove two years ago, as more women built out blogs, and as Glam has lured them into its network. Glam now has about 350 magazines, websites, and blogs in its network, covering everything from shopping to beauty and health.

We initially expressed skepticism about this company’s prospects, after it raised financing on what seemed to be a very bubbly value of $150 million. After all, how could 50 employees command such a high value when all they’re doing is producing content, and when they don’t really own many of the properties in its network?

But then we visited with the company in January, and began to understand its model (see here for our story). Glam has negotiated long-term contracts with most the independently owned sites, and in return offers those sites highly paid advertising of between $12 and $20 per thousand views (CPM) — which is lucrative enough to keep most of them from straying. Glam keeps a portion of that advertising, though doesn’t disclose how much. It continues to build out fully-owned sites, too, and says it gets up to significant $35 CPM on those sites.

At that time, chief executive Samir Arora said he saw Glam headed toward a $500 million valuation, based on the value of comparable companies. Now he’s more bullish, saying Glam has effectively reached that goal within six months, and that its is worth is headed higher. He uses iVillage as a proxy: That company was sold for $650 million a year and a half ago, and its traffic has continued to grow strongly (see graphic below). Factoring in stock market performance, Arora estimates iVillage is now worth about $1.2 billion. And with Glam overtaking iVillage in traffic, well…

The trends helping Glam are strengthening, he says — as new blogs get created and advertisers search for new ways to reach readers beyond traditional media. “The deeper we go into this,” said Arora in an interview with VentureBeat last week, “the more it seems the fragmentation has increased. It is deeper and wider than we thought.”

Glam continues to build its ad network, including targeting technology so that advertisers know the age of the readers on Glam’s sites, along with other demographic and engagement data. Glam has signed a deal to run Google text ads on sites, beside its other premium and display advertising. It has affiliated with more than 90 other sites, with Hearst being a big one.

Without knowing more about the exact relationships it has with its network of blogs, it’s hard to tell how sound Arora’s value estimates are, and how sustainable this model will be if consumer spending falls, and advertising drops. It’s also hard to say what the barriers to entry by others players are. If Glam can command greater advertising rates because of more sophisticated targeting (due to the size of the network), it could enjoy the so-called network effect — and keep getting bigger. We’re not certain this will happen. However, Glam sure has momentum (see growth rate chart below).

Glam has raised $30 million from Accel Partners, DAG Ventures, Draper Fisher Jurvetson, Walden Venture Capital, and Information Capital

Glam is making a big deal of its surge. Tomorrow, it launches a full-page ad campaign in the NYT, the WSJ and others to trumpet its surpassing of iVillage, the site that has held the No. 1 spot for more than eight years.

The traffic suggests Glam’s properties reach about 10 percent of the U.S. Internet population.

updated

We finally “get” Glam, the network of Web sites for women’s fashion and lifestyle.

Last month, VentureBeat was incredulous when venture capitalists invested in the company at a value of $150 million. Glam is just another new media company, dependent on ads. How could an upstart team of 40 employees produce that sort of value?

The company has just demonstrated why. It is the fast growing of the country’s top 500 web sites, according to Comscore Media Metrix numbers just published — and shared with VentureBeat by chief executive Samir Arora (pictured here) during an interview Monday.

Glam enters 2007 with impressive momentum: Hip social networking company, Facebook, was No. 1 fastest-growing site in 2006 — until December — when Glam doubled its uniques in a single month and blew past Facebook at the last minute. Glam now has more than 8 million U.S. unique visitors per month. Glam overtakes Disney’s women network and CondeNast’s network, jumping to second largest women’s web property, behind only iVillage. (See data below.) Glam has more than 16 million global visitors, Arora says.

Not bad for a company conceived started four years ago in Arora’s Haight-Ashbury Victorian in SF.

There’s a slight caveat. For its traffic, Glam counts visitors to more than 200 partner and affiliate sites, which Glam doesn’t own, but delivers advertising too. On the one hand, these sites could choose to leave Glam if they get large enough. However, they are less likely to do so than VentureBeat originally suspected. Glam has solid relationships with these sites, having spent three years piecing them together. Glam typically contracts with them for two to five years, and Glam requires an exclusive on all prime advertising, in return guaranteeing a minimum payment to the partners. Glam is thus very much in control of the advertising, and so likely to be making a good cut — though it doesn’t disclose exactly how much. He likens the structure to a TV network, where NBC sells advertising for its affiliates, but gets content from them.

Even if the cut with partners isn’t particularly high, Glam would make up for it through its very high banner ad rate for advertisers, which is $12 to $20 per thousand views of a site (CPM). The rates on Glam’s fully-owned sites are $20-$35 for every 1,000 page views — a huge premium over most Web sites get. The reason, says Arora, is because advertisers want to reach women, who have been underserved by Web sites until recently. For email, advertorials and other features, the rate is $50 to $120, he says.

Women are finally catching up online, and the market is rewarding the players embracing them. The Knot was among the top ten Internet stock growers last year (126 percent increase).

Also, Arora points to comparable companies to justify his company’s relatively high value. Leader iVillage traded in 2005 in the $600-700 million market value range, before being acquired by NBC for over $600 Million plus earn outs. Over the course of 2006, as Internet companies became more valuable, iVillage’s value became an estimated $800 million. Other comparables suggest Glam is fairly valued relative to Daily Candy and IGN, a men’s site comparable to Glam, and which was acquired by Fox for $600 million.

Going forward, Arora says Glam plans to use its base in Silicon Valley (it also has an office in New York) to maintain its tech advantage over its competitors — pushing more video and TV content this year. Arora is a great salesman. Closing our hour-long interview, he says the company is headed to 20 million uniques globally. With the market valuing these sorts of companies (iVillage, IGN, etc) at 25 to 32 times unique users, he says Glam’s value is headed to $500 million! And we left believing him.

Visual search technology is still in its infancy, but a number of new start-ups are pushing the possibilities forward — the latest being Xcavator.

Riya’s Like launched recently (see our coverage), giving users a way of highlighting a shoe, or part of a shoe, and then look for similar shoes within its database of retail items — and so is helping with comparison shopping. You’ll notice, though, that Like operates in a controlled environment, allowing search within limited categories (bags, watches, shoes). Similarly, Swedish company, Polar Rose, just raised $5.1 million to help it launch its facial recognition, apparently due to be unveiled within the next couple of weeks.

Enter San Francisco’s Xcavator, which attacks visual search differently. It’s not open for general use yet, but VentureBeat got an early look. It will launch next year. Compared to other players, Xcavator lets you drill down further into a picture to find similar features. It claims it is getting closer to what the human eye/brain does. For example, if you’re looking for pictures with attributes similar to the Asian woman’s face (see above), Xcavator lets you circle it, and ignore her white shirt, arms and white background. See the YouTube demo below a demo of the technology. It finds pictures with other faces of Asian women (homing in on skin tone, hair color, and dark eyes and hair (it works for blondes too).

It also lets you click on unique points on a picture, like a butterfly’s wings, or petals of a daisy to find those specific features (see image at bottom, and related tour, which explains more).

The big question, though, is who will want to use this technology. We all have a favorite shirt or blouse that is getting old, and so we might upload a picture of it in an effort to find something that looks exactly the same. That seems like a lot of effort and its probably rare. It’s early days for this company, and its unclear how it can become a stand-alone company earning real revenue. Unlike Like, Xcavator is not crawling the entire Web to index pictures with the goal of becoming a destination site. Rather, it intends to liscense its technology to other companies, even to competitors, such as retail and fashion sites, but also to Riya, Yahoo, Google, or to companies with image software like Apple or Adobe. It’s also working with military agencies for intelligence work. It may work with professional photography sites like Getty Images to scan ad placements across the Web to check for copyright infringement.

The company has been self-funded for three years, and is based on technology built by Russian Lenny Kontsevich, PhD, who has researched his area for a decade. The total team is 10 people, split between SF and Moscow. It is looking to raise a round of venture capital.

The strength of this company is its ability to search vectors within a picture. If you select the entire picture of the Asian girl, for example, it will look for pictures with the white background, with dark hair, arms in similar positions. But it also allow for rotation of such vectors — finding picures with arms in slightly different angles, for example.

Xcavator’s parent company, Cognisign, has various projects up its sleeve. One site will focus on a younger demographic (girls aged 14 to 25) than Riya, because of the viral marketing possible with that age group. [Update: Xcavator has a placeholder name for site, but wants us to keep it confidential for now, for competitive reasons; we've removed screenshot too]. It will let users search, rank, and comment on images, and do it from their mobile phone. The seed/A round would be used to launch this project, says chief executive Bryan Calkins. We aren’t quite sure what would attract girls to this particular offering, but who are we to know.