Confirming weeks of speculation over whether it was being sold or just raising another round of financing, Mr. Battelle's Federated Media Publishing has announced a $50 million minority investment from Oak Investment Partners.
Insurance against recession
"We're ready to stand up to any big brand online," Mr. Battelle said. "Unlike some of the new internet start-ups that [marketers] can dabble around with, we're going to be around for the long term. ... We've got the resources to make it happen."
That might sound like braggadocio, but $50 million is a large sum for any internet start-up at any time, but it represents a particularly significant vote of confidence now as the economy slides into a downturn. It gives the company insurance against any potential recession, Mr. Battelle said, although that's not reason No. 1 for raising the money. The company became profitable in the third quarter of 2007, according to the announcement of this latest round.
While Mr. Battelle wouldn't come close to commenting on how this round values his company, but PEHub suggests it's about $200 million.
Federated Media makes a business by aggregating and packaging high-quality blog content for marketers. Some of the online personalities it works with include Heather Armstrong, author of mom-bait blog Dooce, Ask a Ninja, TechCrunch and Boing Boing.
Federated views itself less as an ad network and more as a rep firm, building out high-touch campaigns with branding goals vs. direct-response goals -- and commanding cost-per-thousand ad rates higher than what most ad networks are able to nab. Some critics have argued Federated's model doesn't scale as well; Mr. Battelle disagrees.
The funding "gets us into a position where we have options," Mr. Battelle said. But what those options were he wouldn't say exactly, beyond some partnerships and possibly some mergers and acquisitions opportunities. There are "some [plans] I can speak to, some I can't because it involves other people and other partners," he said.
He pointed to ways Federated has worked with its talent to expand their brands, such as the recent expansion of popular blog Boing Boing into TV, and said the funding allows him to "take risks together" with Federated talent and expand the brands of that talent.