geniuslogo.bmpNine months ago, we were nodding in agreement that Genius, a San Mateo company that lets Web site owners track every move of their customers, was spooky.

Pundit Rafe Needleman called the service scary. Here’s what we wrote at the time.

Now Genius has raised $10 million more in a second round of funding led by Mohr Davidow Ventures. Also participating are Emergence Capital Partners and Walden International, who in 2005 invested $5.1 million.

We’ve moved on in our thinking. First, increased dependence of companies on the Web for their business justifies more sophisticated tracking tools. Second, most valley companies have engaged in the privacy debate — it helps if a company goes out of its way to explain its policy. Here, Genius has narrowed its focus, and makes clear it doesn’t track consumers. It sells its tracking software to companies doing business with other companies, i.e., their vendors. It’s just another marketing tool. Even consumer Web retails sites are tracking all kinds clicking data as their customers move around their site, which most people appear to be accepting — so Genius looks comparatively tame.

There are other companies that do this, including Eloqua.

Genius says it has more than 100 customers, helped by its integration into — traction that Mohr Davidow partner Nancy Schoendorf cites as the reason for her firm’s investment. Last year, most of Genius’ sales were to companies wanting only one copy of the software, whereas recent deals have seen companies buying copies for 30 or more of their employees, says Felicity Wohltman,’s VP of Marketing.

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