October 2, 2006

Tomorrow, Per-per-Post.com is to announce it will raise $3 million (in its first round) of equity financing with venture capital firm Inflexion Partners.

Pay-per-Post is a marketplace for advertisers to pay bloggers to write about their products for a specific fee.

Such a service has created some controversy in the past, because advertisers can mandate that posts be positive on the product, and disclosure of payment is optional for the blogger.

However, that controversy didn’t stop venture capitalists from quickly jumping on board. The equity financing will be done with help from Villiage Ventures and Draper Fisher Jurvetson.

Dan Rua from Inflexion and Michael Barach from Villiage Ventures will take board seats. Josh Stein from Draper Fisher Jurvetson will become a board observer.

Rob Hof from BusinessWeek spoke to founder Ted Murphy and DFJ’s Josh Stein earlier Monday about the financing and the product in general.

Murphy says his business is doing well in spite of all of the controversy raised by paying off bloggers to write about certain products.

Josh Stein at DFJ seems excited about the potential profitability of the company, while downplaying the ethical issues raised by this and other blogs. "The market will sort things out", he said.

Some calculations based on numbers disclosed in this suggest that revenues after the first few months of operations would have been about $100,000.

Source: Yahoo News