I know quite a few companies that spend a lot of money on advertising services from the biggies, such as Google (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT) and Yahoo! (NASDAQ: YHOO).

So how much of this stuff turns into real customers? Unfortunately, it's unclear.

That's exactly where there is opportunity for Adchemy, which develops sophisticated lead generation systems. The company has raised a cool $19 million in venture capital from investors including Mayfield Fund, Hellman & Friedman, LLC. and August Capital.

"When I started the company three years ago, I realized that there was a need for more efficiency with online advertising," said Murthy Nukala, who is the CEO of Adchemy, in an interview with me. "To solve this problem, we put together a strong team that has developed sophisticated scientific algorithms. We want to make online advertising a revenue center, not a cost center."

Basically, Adchemy is an evolving learning system, which improves -- over time -- based on the real-time activity of the company's network of customers.

As a testament to the technology, Adchemy snagged Rajeev Motwani, a Stanford professor and the co-author of the PageRank paper that led to the creation of Google, as a new board member.

Finally, if you want to check out other interesting venture capital deals, visit DealProfiles.com.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

Adchemy: Making online ads really work originally appeared on BloggingStocks on Fri, 25 Jan 2008 14:45:00 EST. Please see our terms for use of feeds.