Only eight months old, the Rubicon Project has already raised roughly $21 million. In fact, today the company announced its latest infusion: $15 million. The investors include: Mayfield Fund, IDG Ventures Asia, Stanford University, University of California Berkeley, Matt Coffin (founder and former CEO of LowerMyBills.com) and Clearstone Venture Partners.

Essentially, the Rubicon Project helps companies manage the complexities of online advertising networks. The system is getting lots of traction, with more than 3,000 websites signing up.

"We are seeing huge demand," said Frank Addante, CEO and Founder, in an interview with me on Friday. "Customers also want a way to benefit from advertising networks in global markets."

I asked Frank about the concerns of a slowdown in online advertising (especially in light of the cloudy economy in the U.S.). His take? Well, he is not seeing a slowdown. "I experienced the downturn in 2001," said Addante. "That was mostly the result of dot-coms running out of money. As of now, things are different because it's traditional companies that are buying online advertising."

Interestingly enough, the genesis of the Rubicon Project's funding came from Frank's trip to Hawaii – which he wrote about it in his blog.

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

Many top players, such as Google (NASDAQ: GOOG), Yahoo! (NASDAQ: YHOO), and Microsoft (NASDAQ: MSFT), want to get a piece of the local online sector. But it hasn't been easy.

There are a myriad of smaller players trying to get an edge as well. One up and comer is Yodle, which recently announced that it has raised $12 million in venture capital. The investors include Draper Fisher Jurvetson and Bessemer Venture Partners.

Yodle offers a platform that allows small businesses to purchase local online ads. Keep in mind that roughly 63% of consumers now use the internet to search for local businesses.

So what makes Yodle different? Well, the company has made it possible to measure the return on investment for ad campaigns. For small businesses, this is certainly a big deal. For example, Yodle claims that a $1 ad spend can result in an $8 return.

If true, I can see why a small business wouldn't pass on this kind of thing.

Interested in more cool 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.

Microsoft Corp. (NASDAQ: MSFT) CEO Steve Ballmer told an audience yesterday that the world's largest software company won't stop supplying its online services with cash in light of continued losses from that business unit -- for fear of ceding the race to rivals. In other words, Microsoft won't close its billion-dollar checkbook and give the world of online advertising and services to Google, Inc. (NASDAQ: GOOG).

Is Microsoft this afraid of Google, or does it see a fundamental shift of services moving from the desktop software program Microsoft owns (like Microsoft Word) to web-based replacement services? Or, does Microsoft just want a larger piece of the advertising revenue from web search -- an area that Google dominates completely and where it has made all its money? It's a little bit of both.

Don't put anything past Microsoft, I say. The company in some ways looks like a laggard, but it has the cash (net of a tiny amount of debt) to do anything it wants. Google's cash pile is growing tall as well, so although the Microsoft-Google debate will rage on, both companies will continue sparring inside the field of internet advertising. Both have the fortitude and cash to square off for a long, long time. Ballmer is no wimp by any means, and in 10 years we could have an internet ruled by both companies if this punch-counterpunch competitive strategy continues as it has. Someone call Evander Holyfield and Mike Tyson, please.

11-18 note: see my later post for more and updated information on this story.

A new ad delivery system unveiled this week by NebuAd will provide advertisers unprecedented details about your web access activities, allowing them to place their advertising more effectively.

Unlike conventional ad delivery companies that track your choices when you log onto a site that is part of its network, NebuAd takes the concept one frightening step further, tracking your browsing via your internet service provider (ISP).

The difference? Think of the typical ad delivery system as a lookout that spots you when you pull into the parking lot of the mall, who then alerts all the merchants that you've arrived, so they can put up the appropriate displays for your tastes.

In this analogy, NebuAd would be a guy staking out your house, ready to tail you, or your children, wherever you go, reporting your comings and goings to anyone willing to pay for the information.

The company claims that it aggregates and anonymizes the information such that it can't be misused, a claim that I view with great skepticism. As the FTC probes privacy issues and internet advertising, this company will probably serve as the stalking horse. If it's allowed to thrive, there will be little left to defend.

Google Inc. (NASDAQ: GOOG) recently trading up $15.29 to $609.20.

GOOG is expected to report earnings per share (EPS) on October 18th. GOOG October at the money 580 straddle is priced at $32.10. GOOG October option implied volatility of 38 is above its 26-week average of 27 according to Track Data, suggesting larger risk.

The Gap Inc. (NYSE: GPS) CEO Glenn Murphy hosted a meeting with analysts on October 5th.

Smith Barney says "Mr. Murphy is focused on making the company gets an adequate return on its investments. This includes a focus on the expense of the business. We suspect there will be continued focus on moderating the cost structure and assessing various cost components, including marketing. We think the real estate portfolio is under review." GPS over all option implied volatility of 31 is near its 26-week average according to Track Data, suggesting flat price risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

In a recent piece on C/NET, there's some chatter that the mortgage mess will ultimately lower online spending -- taking some of the wind out of biggies like Google Inc. (NASDAQ: GOOG) and Yahoo! Inc. (NASDAQ: YHOO).

Hey, just based on my own browsing, I'm not seeing many mortgage banners. So should we be worried?

I had a chance to interview Frank Addante, who is a veteran of the online advertising world. He sold one of his companies to DoubleClick and his latest gig is The Rubicon Project.

Are big-time newspapers going to survive the instant news rush and immediate availability of the internet?

That question gets bandied around so much every day that some tennis balls would be jealous. But, just like other businesses that continue to be upended by the freedom of the internet, newspapers seem particularly vulnerable. The New York Times is losing readers, other big papers hide content behind "paid access" models on their own websites when anyone can get local and national news on laptops, cellphone screens and any other net-connected device, most often for free.

What do newspapers have left to contribute? A lot, actually -- but not morphing with the times is going to be the downfall of many of them. Newspapers will have to give their content away for free to survive (say some), and in return for losing that revenue, they'll have to get with it in terms of online advertising. Ask Google (NASDAQ: GOOG) about this, as the company owns a billion-dollar empire based on that very principle.

As subscribers (paid ones, mind you) leave in droves, what's to become of many newspaper publishers that rehash the same AP wire stories, mix in local color and commentary and pass off this combo to increasingly leery customers? Some will go the way of the dinosaur unless change is made, as in now. Others, like the Washington Post and The Wall Street Journal, will most likely figure out how to strike a fine balance of excellent, journalistic content and advertising support behind that content.

For others, what value is left to add to the newspaper business that the internet (like Google News) can't destroy? That's the billion-dollar question for the next decade or so. The days of loading up on wire stories while eliminating local, original content to save money are over, and smart publishers knew it years ago. The ones battling with that concept now are already in a world of hurt. Some don't even know it.

The Wall Street Journal [subscription required] reports that Microsoft Corp. (NASDAQ: MSFT), hoping to bolster its legal challenge, is now paying a PR firm to drum up public opposition to Google Inc.'s (NASDAQ: GOOG) $3.1 billion deal to acquire online advertising firm, DoubleClick. Microsoft hired PR firm Burson-Marsteller to drum up opposition to Google's DoubleClick deal. In Europe, Burson urged Internet companies to sign an online petition for a more "transparent and competitive Internet," according to the pitches.

Why does Microsoft oppose the deal and why is it hiding behind Burson? Microsoft does not want Google to strengthen its competitive position in the online advertising industry -- and DoubleClick, which serves online display advertisements, would surely help Google expand its online advertising dominance. Microsoft has been hiding behind Burson in Europe because it has just lost a European Court upheld a ruling that found Microsoft had abused its near-monopoly position in PC computer software.

The irony of Microsoft's efforts to block competition through the courts and the media was not lost on the Journal. In the 1990s, Bill Gates enjoyed tweaking competitors which similar tactics by rivals as it cemented its own power in personal-computer software, and those efforts factored into its run-ins with antitrust regulators.

But current Microsoft CEO Steve Ballmer lacks Gates' competitive chops, so he's struggling to use the means of a second rate competitor against the market leader, Google. Those clumsy means will only make Microsoft look bad.

Peter Cohan is president of Peter S. Cohan & Associates,. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Google or Microsoft securities.

Rupert Murdoch all but said that he would take his new prize, The Wall Street Journal, and offer it online for free, even though he would be giving up almost one million paid online subscribers and about $50 million in revenue.

Murdoch is probably looking at the nearly $400 million that The New York Times (NYSE: NYT) says it will do through its online editions this year. According to Nielsen Net/Ratings, nytimes.com has more than 13 million unique visitors. WSJ.com has closer to 5 million.

Murdoch has hinted that he will add reporting on national and international news to the Journal's financial coverage. That would give him the opportunity to do real damage to the Times and potentially go after much of its consumer advertising revenue base. With internet advertising revenue at newspaper sites still rising at close to 20% a year, Murdoch is after a pot of money that The New York Times Company must know will be close to $750 million three years from now.

It's hard to make sense of what market analysts do sometimes. The stock prices of companies can swoon and sway based on analysts who can be 1) mostly incorrect about the prospects for covered companies, 2) dismal in their track records of earnings predictions and 3) falling into a pattern of some other weird alternative like market influence. I'm not saying all are that way, but some sure seem like it. When Google, Inc. (NASDAQ: GOOG) has a fantastic quarter but misses over-inflated earnings projections just a tiny amount, the stock price plummets (only to recover shortly thereafter). What is the point? To some, analysts run the market.

The same thing happened to AOL, a division of Time Warner, Inc. (NYSE: TWX). The company that owns this blog performed a fast and well-timed turnaround last year from a subscription-based model to an advertising-based model and the bet paid off from many perspectives. Of course, some analysts thought an immediate gratification of revenue from ad sources would befall AOL the first day this switch started happening. Unless things can be changed 'on a dime,' that generally never happens. Nevertheless, I consider AOL's strategy to morph into an ad-based revenue model to have worked pretty darn well in such a short period of time.

Alas, the double-digit ad revenue growth predictions by AOL execs, which turned into a few quarters of 40% ad revenue growth, set the stage for later disappointment. Although AOL's advertising revenue was less than expected for the second quarter that was reported on August 1st, it still went up a healthy 16%.

Most online news services give their readers access to their daily news stories for free, the main exception to that rule being Wall Street Journal Online, which charges users a annual fee to access all its content. This, however, may change shortly as the soon to be owner, Rupert Murdoch, appears to be toying with the idea of opening up the site's content to anyone wishing to see it.

This brings up an interesting discussion, and one that could have major consequences. Unlike most sites that have tried (and failed) to charge annual subscription fees, Dow Jones & Co. (NYSE: DJ)'s Wall Street Journal Online has proved able to successfully do just that. The site pulls in $79 for an annual subscription from its estimated 1 million users. That's a nice little chunk of change that Mr. Murdoch is considering throwing away.

But would he really be throwing away anything? That is where the debate comes into play. How many internet users would start to use Wall Street Journal Online for their primary news service if they were allowed unlimited free access? My opinion is that the number would be large, much larger than its current numbers, and as we all know... visitors equal revenues. In this case, visitors would equal huge advertising revenues.

I've known Dave Morgan, the founder of TACODA, for some time. Back in 1995, he founded Real Media, which was a pioneer of online ad networks.

No doubt, he's one of the top thinkers in the space – and has been a great source for my stories at BloggingStocks.

Well, today TACODA announced it is selling to AOL, a unit of Time Warner (NYSE: TWX) and also the owner of BloggingStocks.

Morgan has proved himself a step ahead of the technology curve and TACODA is no exception. The company is a leader in so-called "behavioral targeting" for online ad networks. Basically, it means an ad can be based on such things as preferences, age, gender and so on.

It's cool stuff – but not easy to pull off. Also, it's something that needs a lot of scale. And that's why a deal with AOL makes a lot of sense.

In fact, according to a study from eMarketer, the behavioral targeting market is forecast to grow from $350 million in 2006 to $3.8 billion by 2011.

So where's Morgan going now? Actually, he said he'll be moving over to AOL (this is according to an email exchange I had with him this morning).

If you want to check out more recent M&A deals, click here.

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

Google Inc. (Nasdaq: GOOG) has dominated the internet advertising space for quite a while via AdSense and AdWords but judging from interpreting a recent news event, Yahoo! Inc. (Nasdaq: YHOO) is finally going to be able bring it on. Yesterday it was announced that Yahoo! completed its purchase of RightMedia, in complete, for another $650 million. Although Yahoo! has already been a part-owner in the company, and the news that the complete acquisition was to occur was known by the public, the completion is very significant for the future of the internet advertising space.

When I used to run my own website I was very in-touch with the recent additions to the advertising space. In my opinion, RightMedia has one of the most interesting and innovative models for both advertisers and publishers. Essentially, RightMedia has created an open marketplace for all parties involved in internet advertising. As we've all learned from eBay Inc. (NASDAQ: EBAY), open marketplaces are much more interesting for everyone involved - the bidders clearly see what they are receiving and for what price while the sellers are able to maximize the amount paid for any item.

Yahoo! (NASDAQ: YHOO) is trying feverishly to inject more life into its online advertising business these days with the recent rollout of Project Panama, slated to give the company a more firm footing against Google Inc. (NASDAQ: GOOG). Google's efforts in the internet advertising arena have been quite huge in recent years, and the company leads all others by a large margin in the revenue it receives from advertising on the internet. Yahoo!'s previous purchase of Overture's bidding system, as it turns out, could not hold a candle to Google's customer-relevancy keyword advertising system.

And so, Yahoo! invented a system comparable to Google's that would allow advertisers to become more relevant to Yahoo! customers. Although Yahoo! is already far behind, the company still enjoys one of the largest overall internet audiences in the world. The problem? It's not monetizing that audience like it could. To help speed up the adoption and usage of Project Panama, Yahoo! has opened it up to businesses and other developers so that it can be twisted, formed, used and re-used as much as possible and as widely as possible.

Yahoo! has no easy task in trying to catch the wave of revenue that Google currently enjoys from its advertising system, but opening up it's new competitor to businesses and developers is a great start. Gone are the days of "walled gardens" and in are the days of "open platforms" so that your own customers can dive in and get things in front of end customers in the most customized and rapid fashion. Right now, it's still too early to see what kind of impact Google will see from this. What's your guess?

There are many global players in the area of advertising. Some tens of billions of ad budgets are doled out to a decent group of advertising and marketing agencies that drive the consumer economy in a large way (and that spending comprises two-thirds of the economic activity in the U.S. Television, radio, and newspaper/magazine advertising has been (and continues to be) a huge industry. But, internet advertising has started to shake up that ball field, as Google Inc. (NASDAQ: GOOG) and Yahoo! Inc. (NYSE: YHOO) (and increasingly, Microsoft) control much of the internet advertising landscape to the tune of billions of dollars per quarter.

Is the realm of advertising shifting to the internet more and more? That is a forgone conclusion -- and companies that are not recognizing this will be left for dead or will wither away to nothing in most cases. Even auto repair shops owned by a "mom and pop" are advertising on the web these days. It's a brave new (and global) world out there, and this new landscape is, well, under the control of just a handful of disruptive players.

Tracking the response and impressions of customer behavior on the internet is incredibly lucrative, as the "digital footprints" of customers and browsers leave a trail of data that would get almost any marketer salivating under the collar. As such, more and more money is flowing into this sector (with Google taking the lion's share), and television and radio advertising is becoming less and less relevant with the advent of iPods in cards and TiVos in homes. Will we see more ad dollars flowing into the world wide web? Bet on it.