What Privacy Problem Web Ad Targeter Media6Degrees Raises $17 Million [MediaMemo]

60" title=target alt="" src="http://mediamemo.allthingsd.com/files/2010/12/target-275x183.jpg" width=250 height=166>One way to gauge what’s really going on with privacy and Web advertising: Follow the money. If investors really think privacy problems are going to weigh the industry down, it’s going to be a lot harder to get checks out of them.

So use that context to think about this news: Media6Degrees, a behavioral advertising technology start-up, has raised a $17 million funding round led by Menlo Ventures.

Earlier investors U.S. Venture Partners and Venrock, which had helped the 2-year-old company raise another $12 million before the new B round, are re-upping.

The money is supposedly targeted for general expansion, not M&A, says CEO Tom Phillips, who joined the company in 2009 after a three-year stint at Google.

Phillips says his company will end up booking $20 million in revenue in 2010. And he says that by Q4 it had ramped up to a $30 million annual run rate–that is, it will do about $7.5 million in the last three months of the year.

Media6 describes what it does as “Social Targeting,” which sounds as if it’s trying to find links between your various social networks. But the company’s work has nothing to do with your Facebook or Twitter profiles. While it doesn’t like the term “behavioral targeting,” that’s essentially what it’s doing.

In a nutshell, Media6 Web marketers track the surfing behavior of their existing customers, then try to find similar behavior patterns–a matching “social signature”–for other surfers, so they can show them ads.

Depending on your perspective, that’s either creepy or a common-sense strategy to help advertisers spend their money more efficiently. If it does weird you out, you can go ahead and opt out. But Phillips and his company would like you to know that the company never tracks individuals–only their anonymized browsers.

Still don’t want any part of this stuff? In theory, companies like Media6 will be in trouble if lots of surfers really do start opting out of data collection. They can do that by telling individual Web sites and ad networks not to track them–or, more ominously, by using browsers with “do not track” filters built into them.

But we’re a very long way from that kind of change. And the start-up’s investors seem to be betting that it’s never going to come.

Tagged: Facebook, Google, Internet, MediaMemo, Peter Kafka, Twitter, advertising, digital, media, search, software, ads, B round, behavioral targeting, do not track, filters, funding, investors, M&A, Media6Degrees, Menlo Ventures, privacy, profiles, Q4, revenue, social networks, social signature, Social Targeting, start-up, surfers, technology, Tom Phillips, track, U.S. Venture Partners, Venrock, Venture Partners, Web | permalink

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Help Desk Software Startup Zendesk Raises $19 Million

million round of Series C funding today led by Matrix Partners with participation from Benchmark Capital and Charles River Ventures, putting the 3-year-old startup’s total funding to date at about $25.5 million.

Zendesk, which manages customer service responses for companies like Groupon and RackSpace, does away with the phone tree and gives both customers and employees transparency into how customer inquires are being handled.

For instance, both the customer and the company’s customer response team can see which employee is handing the customer’s ticket and when that employee is expected to respond.

The service is within a price range that small businesses with small customer bases can afford, but it also counts a number of companies with puny employee-to-customer ratios like Groupon and Twitter.

The company recently acquired its 5,000th paying customer, and CEO Mikkel Svane says it’s achieved about a 300% revenue increase in 2010.

With the $19 million of new funding, Zendesk is planning to expand the number of channels to which customers can submit inquiries and continue its aggressive innovation (the company has launched four new features for its product in the last three months).

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