Conduit, an Israel-based startup that lets anyone customize a browser toolbar that they can offer to their friends or others, reports rapid user growth.

Rapid enough, at least, to draw $8 million in a second round of financing from aggressive venture capital firm Benchmark Capital. This follows an initial $2 million investment by Israeli venture firm Yozma two years ago.

Chief executive Ronen Shilo said Conduit is doubling revenue, users, and publishers every quarter.

He said he chose Benchmark, well-known for its financing of eBay, Red Hat, MySQL (which was just sold to Sun today), and Second Life in part because of the network of contacts it can provide.

Users have downloaded 30 million toolbars from sites that offer Conduit’s toolbars, the company says. That’s up from 12 million when we last covered the company in August. Conduit reports 600 new content publishers creating one of its toolbars every day.

An example of a Conduit toolbar is below. Conduit targets publishers, including VentureBeat, letting them create toolbars with things like a search window, RSS feeds, podcasts and other things — all customizable from an online dashboard.

It lets publishers drag and drop widgets onto that toolbar, and create things like alerts. For example Fox News might use the toolbar to send you a urgent news alert/update. Or if YouTube provided you a toolbar, it could use it to alert you to new videos of your choice.
The Israel-based company boasts 140,000 publishers in its network, from Fox News to Greenpeace, and Lufthansa to Major League Baseball. The toolbar may not be a novel innovation itself, but by letting publishers customize toolbars for their own community of readers, it hopes to differentiate itself from other toolbar creators, such as Google, Microsoft, and Yahoo.

Users have the ability to add the content they want into their toolbars. For example, if you downloaded a Lufthansa toolbar, not only would you have access to the airline company’s booking engine, but you could add a RSS feed from your favorite blog (VentureBeat, of course).

Conduit has plans to open an office in East Asia and Europe later in 2008, Shilo said.

Conduit will not seek to monetize toolbar users. Rather, it will focus on providing advanced-tools and services at cost for publishers.

The company shares gets ad revenue from Google by making it the default search engine within the toolbars. Shilo says the company is “cash positive.”

With all the free tools, users of Internet browsers Safari and Opera will be disappointed: Conduit is only available for Internet Explorer and Mozilla’s Firefox for the time being.

Although for now Conduit is limited to toolbars and desktop alerts, Shilo says he has a much bigger plan for the company. He sees it as a new “method of communication” between publishers and users, and wants every website in the world to use Conduit’s toolbar system.

David Adewumi, a contributing writer with VentureBeat, is the founder & CEO of http://heekya.com a social storytelling platform billed “The Wikipedia of Stories.”