In 2009, Glam’s growth rate was up 50% in display revenue, during a time when many of its competitors were seeing negative growth (Yahoo, which is the leader in display ads, is down 15% and iVillage/NBC is down 20%). CEO Samir Arora attribues Glam’s success in part to its very high engagement rates, with visitors spending much more time at Glam properties than they do at sites on iVillage or Conde Nast (see the table below).

The company hasn’t come through the downturn unscathed — they had some layoffs and performance cuts — but Arora says that some of their alternative measures like reducing executive pay helped prevent heavier losses. Now things are looking up: Glam turned profitable in September, and Arora says that the company will be profitable for all of Q4.

He came through earlier this morning to confirm the accuracy of the scoop, and also provided a statement from his team in order to shed more light on the imminent initiative. As we suggested, the new solution is tied to GlamApps, the company’s application platform.

Arora tells us:

With the launch of Tinker.com to help monetize “real-time” trends and events, Advertisers have been asking Glam to reach real-time stream users across multiple applications.

Unlike Social Network apps that live “inside” MySpace and Facebook, Twitter is revolutionizing the apps business by pioneering an open model- Glam sees this as the first mid and long tail of Social Apps, much like iPhone has done for mobile apps with a pay for apps model. Given internet apps are free, except for a small “pro” apps upgrades, it is vital that we can figure out a monetization quickly. Given the audience and vertical targeting Glam has developed for content publishers and the trust with brand advertisers, Glam can bring the learning to the Twitterverse. Like Portals like Yahoo and AOL offered advertisers content along with social apps like AIM, Twitter Apps Network helps Glam Media offer distributed social apps to brands- taking the next step in building a true distributed media company.

Yep, that’s still vague. Hopefully we’ll have a better understanding of what Glam Media is trying to accomplish when they share more details about the project next month.

We didn’t really ask, but Arora also shared some statistics about the current reach of the Glam network. He claims Glam Media currently boasts over 1,000 publishers with 6,000 editors/journalists/bloggers reaching 56 million unique users a month in the United States. That’s one big vertical.

We know this because a number of third-party Twitter app developers have received an e-mail this morning from Derek Houdyshell, Network Sales and Program Director for the California company, and one of them forwarded that e-mail to us.

This is what the message reads:

Hi [REDACTED],

I am interested in discussing syndication, distribution, and advertising opportunities with you.

Glam Media is building a Twitter powered advertising platform by aggregating the best Twitter apps on the web. The demand is high and we want [REDACTED] to be part of it!

Please contact me at your earliest convenience.

Best Regards,
Derek Houdyshell
Glam Media, Inc.

The description is rather vague, but apparently Glam wants to build upon its model of wrapping an advertising network around topical websites and blogs and extend it to the host of third-party Twitter applications that have come out of Twitter’s developer ecosystem. As far as we can tell, it has little to do with Tinker, another one of its ventures related to Twitter that centers around micro-payments but it could be connected to Glam Apps (its own application platform).

We’ve asked Glam CEO Samir Arora for more information and will update when he gets back to us.

Glam Media, which has raised a massive amount of funding ($125 million reportedly) to date, is one of the fastest growing networks on the Web. Like many other companies, it had its share of layoffs and other cutbacks following the economic downturn, and in an effort to conserve cash, Glam also recently slowed down payments to its partner publishing sites.

Not that Glam isn’t putting their funding to good use. In 2008, the company made a couple of strategic acquisitions and keeps on displaying a clear focus on international growth, while at the same time launching interesting side projects like Tinker.

Late last year, we reported that Glam Media was slowing down payments to its publishers as well as making significant pay cuts although it self-reported its Q4 to have been ‘surprisingly strong’. One month later, ComScore data showed Glam Media was one of the fastest growing websites in the US. It was also the ninth largest publisher of display ads, serving up an estimated 2.1 billion ad impressions per month.

It will be interesting to watch how Glam performs the next few quarters.

It’s not exactly the Time 100, but Glam’s new men’s network (see previous post) has its own list: the Brash 100. This is the sort of list you’d expect to see in Details, an attempt at an iconic list of “unforgettable” men. It’s filled with everyone you’d expect: Steve Jobs, Bill Gates, Tiger Woods, Barack Obama, John McCain, Jeff Bezos, Warren Buffet, Al Pacino. Even our own Michael Arrington snuck on the list (he has a tendency to do that).

If you don’t feel like clicking through all 100 names, on the Brash site you can skim through the full list below.

Al Gore
Al Pacino
Anderson Cooper
Andre Agassi
Anthony Bourdain
Arnold Schwarzenegger
Barack Obama
Berry Gordy
Bill Clinton
Bill Gates
Bill Maher
Bill O’Reilly
Bob Dylan
Bono
Bruce Springsteen
Dalai Lama
Damien Hirst
David Beckham
David Bowie
David Geffen
Dick Clark
Donald Trump
Dustin Pedroia
Elton John
Eminem
Frank Gehry
George Clooney
George Lucas
George Steinbrenner
Greg Louganis
Hank Aaron
Howard Schultz
Howard Stern
Hugh Hefner
Jack Nicklaus
Jackie Chan
Jeff Bezos
Jerry Seinfeld
Jesse Jackson
Joe Namath
John McCain
John Roberts
Johnny Depp
Jon Stewart
Judd Apatow
Kanye West
Karl Rove
Keith Olbermann
Larry Page & Sergey Brin
Lee Iacocca
Lorne Michaels
Marc Jacobs
Mark Burnett
Mark Spitz
Michael Arrington
Michael Bloomberg
Michael Jordan
Michael Phelps
Michael Schumacher
Mick Jagger
Morrissey
Muhammad Ali
Nelson Mandela
Nicolas Sarkozy
Paul McCartney
Pelé
Philip Seymour Hoffman
Prince
Quentin Tarantino
Ralph Nader
Reggie Jackson
Richard Branson
Richard Parsons
Robbie Williams
Rupert Murdoch
Rush Limbaugh
Russell Simmons
Sean Combs
Sean Connery
Sean Penn
Seth Rogen
ShahRukh Khan
Shawn Fanning
Simon Cowell
Spike Lee
Stephen Colbert
Steve Jobs
Steve Wynn
Steven Bochco
Steven Spielberg
Ted Turner
Tiger Woods
Timbaland
Tom Ford
Tyler Perry
Vidal Sassoon
Warren Buffett
Will Smith
Willie Nelson
Woody Allen

Editor’s Update: Glam actually acquired Codex Media back in July. What it is doing now is integrating Codex into Glam Deutschland.

Glam Media, the content network that mostly targets females, may have acquired a large German content network aimed at females, called Codex Media.

A tipster who has a connection to Codex Media first told TechCrunch about the possible acquisition this morning after receiving a letter from Codex saying “Codex Goes Glam.” On the company’s website, the same statement is used at the top of the page [Google Translation Warning].

Codex Media offers a similar service to that of Glam Media. The site offers a slew of premium female content to German women across a wide array of markets, including fashion and celebrity gossip. More importantly, many of its properties are highly sought after in the space: it owns Cosmopolitan Germany and Elle Germany, to name a few.

Neither company has made an announcement at this time about the acquisition, but considering Codex Media is now saying it has “gone Glam,” there’s little doubt that there are some major changes afoot.

And considering the rumors persist that Glam will lay off a part of its workforce or try to appeal to men to increase readership, it only makes sense for the company to try to put the $85 million it raised earlier this year to good use.

Glam, a women-focused advertising network, raised a massive $85 million round of financing earlier this year – bringing their total capital raised to over $115 million. A lot of that money was reportedly taken off the table by Glam’s founders, but the company clearly has the cash and stock currency to make acquisitions.

Presumably Adair’s deep finance and banking experience will help him make those acquisitions and investments as Glam gears up to compete with Sugar Inc. and other competitors.

As we predicted, Technorati now joins them with the launch of Technorati Media later this morning (the site will be password protected until 9 am PST today), their own blog advertising network. This comes just a couple of days after news leaked of their new round of financing.

The company has been testing the new sales product with a number of partners, including BlogTalkRadio, BlogCritics, BlogCatalog, BlogTV, Technabob, GPSMagazine, GeekAlerts and NerdApproved. CEO Richard Jalichandra says these blogs reach a combined audience of approximately 17 million unique monthly visitors.

Early advertisers on the network include Honda, Acura, Toyota, t-mobile, Adobe, HP, Sandisk, MSFT, Verizon, Sun, Sony, Visa, Nike, Scion, Chevrolet, Paramount, Universal Pictures, 20th Century Fox and Best Buy.

Technorati has explored selling ads for third party sites for some time, but this is the first time they’ve opened the service up to anyone. Unlike Glam and Federated Media, they will take all comers, and say they expect blogs, from the large players on down through the long tail, will find they do a better job monetizing sites than the current options.

Ads are sold on a CPM basis. They will not make revenue guarantees, says Jalichandra, but the split between parties is negotiable. He declined to state what rates have been negotiated with beta partners. This is similar to what Six Apart promises, which is also targeting the long tail of blogs.

Jalichandra also says Technorati is uniquely positioned to sell ads at premium rates, even through small blogs, because they will be able to use descriptive tags/keywords, along with their existing blog indexing technology, to better match ads with content.

Technorati’s has seven sales professionals, led by VP Sales Tony Pribyl, a new hire. They also hired a new marketing lead, Jennifer McLean, away from Glam recently.

For now Technorati is only working with larger blogs, although it will be open to all comers in 2-3 months.

The deal is a big win for Glam’s advertising network, with StyleFeeder bringing an additional 1.5 million page views (comScore) to Glam but more importantly over 1 million Facebook users (StyleFeeder claims to be the biggest shopping application on Facebook).

The deal with Shopping.com sees StyleFeeder adding comparison pricing to its personalized shopping engine, providing more of a one stop shop for users.

See our previous coverage here.

So what would Federated Media do with $50 million: Invest in sites. From a March interview:

Battelle: Well, I can’t say specifically what we might do with any money that we might raise, should we do a fund-raising round. But I think there are an awful lot of opportunities in this emerging field and it’s just good to have access to capital to execute any reasonable ideas that we might have. It’s a very quickly changing market and it needs financing. I mean individual sites need financing and we want to be a good partner for all of our sites.

Here’s what Michael said at the time:

Here’s what I think he really means: They’ll either buy sites outright, or guarantee revenue, or guarantee revenue in exchange for equity. A publisher wouldn’t consider Federated Media an attractive investor versus venture capitalists simply because it would mean tying their revenue to them over the long term.

VentureBeat talks about expanding the business and Facebook apps, but does FM really need more money to build out its core business? There’s every chance FM will be going down the Glam path in owning or part owning some sites and acting as the ad broker for others.

disclosure: FM sells ads for TechCrunch

At its core, Shine is a large blog with magazine style layout. Content is broken up into various subcategories with the front page highlighting the newest content from across the site. Topic areas include parenting, sex and love, healthy living, food, career and money, entertainment, fashion, beauty, home life, and astrology.

The Wall Street Journal quotes Amy Iorio, vice president for Yahoo Lifestyles saying internal research shows women are looking for a site to aggregate various content and communications tools:

“These women were sort of caretakers for everybody in their lives,” she said. “They didn’t feel like there was a place that was looking at the whole them — as a parent, as a spouse, as a daughter. They were looking for one place that gave them everything.”

With Shine, Yahoo will find itself competing with offerings from Glam Media, Sugar and iVillage. Screenshots as follows.

Scott Swanson, Glam’s GM and Vice President, told publishers in an email (full text below) that “house ads” that were served for unsold inventory were being discontinued as of March 25, except to fulfill “minimum commitments that Glam has contractually agreed to.”

The email says the change was made to give publishers “more choice when it comes to how you use your unsold inventory.” But according to one large publisher partner to Glam, this is actually nothing more than a way for Glam to dramatically cut payments to partners. He said “While they’re spinning this as positive news, it sucks for publishers. Publishers were previously guaranteed $3 – $5 CPMs for house ads. By no longer running any house ads, that revenue dies. And, given Glam’s fill rates retwork wide are only 30%, that’s 70% of traffic (for most publishers) that’s no longer earning revenue from Glam…It’ll basically cause a 30 – 80% drop in revenue for publishers”

Glam’s business model is to guarantee minimum flat payments to publishers. A medium sized blog will receive, say, a guaranteed payment of $10,000 monthly. Glam then sells ads into those blogs, and placed house ads with a high CPM for any unsold inventory. If the blog’s page views grew, those additional payments over the guarantee could really add up. Some publishers, with 3 or more ad units on a page, could guarantee a $15 or higher RPM (revenue per thousand page views). That’s an awesome advertising income for blogs, particularly blogs targeting women generally (highly specific niche blogs can command higher rates, but usually only at scale).

So why is Glam doing this? Three reasons, probably.

First, they need to get costs down. Last year the company lost $3.7 million on $21 million in revenue. They’ve promised investors that 2008 would bring in $150 million in revenue with $40 million in profit. The only way to get there is bring in a lot more publishers, sell a lot more ads, and keep a larger share for themselves.

Second, Glam really needed to keep all those bloggers happy last year while they were raising capital. There’s no better way to do that than to send them big checks every month. Now that Glam has raised the big round, they don’t need the small bloggers at all, and they certainly aren’t going to be losing money on them.

Third, Glam is actively acquiring many of the blogs that they currently sell ads for, and they want them cheap. By cutting their revenue dramatically and quickly, many of those blogs will immediately be in a very tight cash position. They may be forced to sell. And with revenues down, Glam can pick them up for a song.

What does all this mean? It means if you are a Glam publisher, you’ve served your purpose and the good times are over. Move along, please. They have a company to build. And if you’re counting on those guaranteed payments after the termination date on your contract, well, you’re as dumb as Glam hopes you are.

I’ve emailed Glam for a comment, but haven’t heard back from them yet. The company has raised a total of $114 million.

Update: Scott Swanson replies in the comments:

As GM of the Glam Publisher Network, my team’s #1 priority is to ensure the success of our publishers and to help them secure high-CPM brand advertising. Unlike most other networks we do not compromise on our rate card and as a result, our partners benefit from high CPM brand advertising. When we’re unable to deliver a paid ad, we have traditionally run a Glam house ad (i.e. a current house ad announces our upcoming Glam Network blogger awards). Publishers have requested more choice for the impressions that our house ads would normally fill. This default ad technology simply replaces the Glam house ads with a host of options. This is similar to standard network ‘default’ technology that’s been in general use for years.

I want to acknowledge that Glam is successful because of our publisher partners. As a company, our focus is on convincing the brands to engage in new ways with a media landscape made up of independent premium publishers with passionate audiences. We welcome the ongoing dialogue.

Full disclosure – Federated Media is our ad selling partner. Sometimes we love them. Sometimes, not so much.

Glam Media: A Flavor Of The Month

The first thing that stuck out was his criticism of competitor Glam. CNET’s Stefanie Olsen asked Battelle “Vertical ad networks like Glam Media are really popular right now. Investors love them. Why do you think that is?” His response: “Because people don’t understand them and they hope things that they don’t understand will pan out.” He added “I just think they are the kind of flavor of the month, but you have to get down to where do you add value to the marketer and where do you add value to the publisher.” In a world filled with over-media-trained executives, its refreshing to see someone go after a competitor with such a direct statement.

My next question would have been to ask him how Federated Media is different from Glam. Federated Media sells advertising for tech sites; Glam sells ads for women-focused sites (although their biggest partner is MyYearbook). Other than the focus of the ad sales effort, the differences are not obvious to the casual observer.

The truth is the networks have significant strategic differences. Glam owns a few properties of its own, which helped in the early days as anchor properties. Federated Media does not own any major publishing sites.

Glam also guarantees revenues to partners. MyYearbook is rumored to receive a guaranteed CPM on page views, and many of the blogs get guaranteed monthly payments of $10,000 or more. Those guarantees resulted in a loss for Glam of $3.7 million last year on $21 million in revenue. But it also accelerated growth and allowed them to raise a massive round of financing.Federated Media, by contrast, doesn’t guarantee revenues but is profitable. They’ve raised just $7.4 million.

But Battelle also reportedly has Glam envy. He turned down a $100 million buyout offer, reportedly because he felt Federated Media should be worth at least as much as Glam ($400+ million).

Will Federated Media Buy Or Invest In Publishers?

The weak point of Federated Media’s model is that they don’t control their own publishers. If a better deal comes along, those publishers will bail – which is what happened last year when Digg left the network for a big, three year guaranteed revenue deal from Microsoft.

One way to solve that problem without guaranteeing revenue is to own publishers, or at least a stake in them in return for a contract they can’t get out of. When Olsen asked Battelle what he intended to do with the venture capital he’s in the process of raising, he said:

Word has it you’re looking to raise money and you’ve hired Savvian to vet offers. (CNET News.com story here.) Given that you’re already profitable and don’t need the cash, what do you plan to do with the money?
Battelle: Well, I can’t say specifically what we might do with any money that we might raise, should we do a fund-raising round. But I think there are an awful lot of opportunities in this emerging field and it’s just good to have access to capital to execute any reasonable ideas that we might have. It’s a very quickly changing market and it needs financing. I mean individual sites need financing and we want to be a good partner for all of our sites.

What do you mean individual sites need financing? You want to fund some of the sites you represent?
Battelle: I’m not saying that we’ll necessary do that. I’m saying that it might not be a bad idea to be ready, should that become something that those sites are looking to do. In a fast-evolving model, it pays to have a strong balance sheet.

So Federated Media says they want the option of investing in their publishers down the road. But certainly there will be strings attached. Here’s what I think he really means: They’ll either buy sites outright, or guarantee revenue, or guarantee revenue in exchange for equity. A publisher wouldn’t consider Federated Media an attractive investor versus venture capitalists simply because it would mean tying their revenue to them over the long term.

But at one point in the interview Battelle said a roll up wouldn’t work, because authors must be independent to be authentic (I’m interpreting, not quoting). So there’s some conflict in some of his statements. What are they really thinking? I have no idea. But revenue guarantees would be a nice place to start.

From what we hear, Federated Media is looking at both financing and new buyout offers, but wants a valuation way beyond the $100 million floated to them last year. Founder John Battelle is said to be looking for more of a Glam-like valuation, in the $400+ million range. Glam has a similar business model to Federated Media, but focuses on womens sites. Glam also guarantees significant revenue to its partners, which resulted in a loss last year of $3.7 million on $21 million in revenue. Federated Media doesn’t guarantee revenue, and is reportedly profitable (they better be, with how much of our revenue they keep).

Federated Media is reportedly generating gross revenues in excess of $2 million per month, and they keep 40% of that after the split to partners.

It’s unlikely the company will get buyout offers in the price range Battelle is looking for, so a new financing is likely. But part of me wonders why they’re doing this at all. A new financing means a bigger valuation, which means they need a much higher price down the road when they do eventually sell. And with competitors springing up all over the place, margins can take a hit.

Perhaps Federated Media intends to take the Glam approach and go in the red for the sake of growth and begin to guarantee revenues. That’s a slippery slope, but it may also get Battelle his payday.

First, they’ve been pitching venture capitalists on another round of financing. That’s not surprising – their last round, $10.5 million, was in June 2006. The company has raised a total of just over $20 million, and given that they have 25 employees, it’s time for another round. But we’ve also heard that they’ve hired Montgomery & Co. to shop the company to buyers, simultaneous to their funding pitches.

What’s more interesting, though is what we’re hearing on the product front. Technorati, under new CEO Richard Jalichandra, recently changed it site to focus more on its core blogging audience.

That change foreshadows the upcoming shift – which places the Technorati site itself as an anchor in a new blog advertising network.

Advertising networks are popular right now – Glam recently raised $85 million after transitioning, seemingly overnight, from a small web property focused on women to selling advertising for a variety of similarly-focused publishers. And John Battelle’s FM Publishing, an advertising network focused on technology blogs, recently hired investment bank Savvian to help them raise money or sell after turning down a $100 million buyout offer.

Technorati will certainly be competing head to head with FM, although sources say they’ll focus on the long tail of the market as well (FM only takes larger sites). The network will be a self-serve exchange for bloggers (and other publishers) as well as advertisers. Ad units will include both display and text ads, and will allow units to be charged on both a CPM and CPC basis. This self-service model looks a lot more like Adbrite than Glam or FM.

Technorati tags, which are very often used to describe blog posts with keywords selected by the author, would also be a natural way for Technorati to target advertising more effectively.

Technorati has also considered other strategies recently, including a blog rollup. But our understanding is that they’ve gone with the ad network idea, and are currently focusing engineers on finalizing the product.

Will the strategy work? As we’ve argued many times, ad networks suffer from fickle customers. Glam offers partners revenue guarantees based on page views (and lost $3.7 million last year on $21 million in revenue). FM has resisted guarantees to date, but lost high profile partner Digg last year to Microsoft. Others, including us, have simply sold advertising directly while continuing to work with FM. With Technorati entering the market, publishers will have yet more choices. That’s good for everyone except the ad networks competing for their business.

The round was $65 million in cash and $20 million in debt, on top of almost $30 million they raised in three prior rounds. Investors included Hubert Burda Media, GLG Partners, Duff Ackerman & Goodrich, Hercules Technology Growth Capital, Accel, Draper Fisher Jurvetson and Information Capital. The valuation, as expected, was in the half billion dollar range.

The company, according to their original offering document, which is embedded below, is not yet profitable. They lost around $3.7 million on $21 million in revenue in 2007. 2008 projected revenues are $150 million and $40 million in profit.

Glam operates a number of small sites geared towards women. Glam.com is the main anchor with the largest reach among these properties, but other owned sites appear to be pure SEO plays like free-beauty-tips.com and celebrity-hairstyles.org. They also sell advertisements for other sites, which make up the vast bulk of its page views. We have criticized them in the past for claiming to be the largest womens site on the Internet, and the fastest growing site in the U.S., based on traffic coming from sites they sell ads for.

As an ad network Glam may find its margins squeezed as competition increases. Still, they control a lot of page views. Comscore reports that worldwide uniques across all sites that Glam sells advertising for had nearly 47 million unique visitors and 1.1 billion page views. That’s 4x the unique visitors and 11x the page views from a year ago.

http://www.docstoc.com/docs/wrapper.ashx?doc_id=412152&swf_url=http%3A//content1.docstoc.com.s3.amazonaws.com/Glam_Media_Teaser_Aug_07.pdf.swf&showrelated=0&showotherdocs=0&showstats=0&enableFullScreen=1
Glam Media Teaser August 2007

I mentioned that they were raising money in an August post. In that post I heavily criticized the company for trying to claim it was the largest womens site on the Internet, as well as the fastest growing U.S. web site. In their offering document, they said “Glam Media is a Web 2.0 distributed media company that is number one in reach for women as reported by comScore Media Metrix…Glam Media is the fastest growing web property in the United States…”

But Glam isn’t really the largest women’s site on the Internet – not by a long stretch. Rather, it’s a collection of a few sites that they own that generate some page views, plus a big ad sales team that sells ads for 600 or so other blogs and websites. In August the company claimed 19 million monthly visitors, but just 3.4% of them (654,000) actually visited Glam.com. The company will lose about $3.7 million this year on $21 million in revenue.

The company still claims to be the largest women’s site on the net, and still talks about those big unique visitor numbers. But their real position is much different – they rely completely on their partners for page views and advertising inventory.

Jarvis says Glam only had to “fire” one content partner this year. That suggests the power in the relationship sits entirely with Glam, when in fact the opposite is true. For now, many of their partners have few choices in selling ads.

But competition is clearly coming (Sugar, Inc. is going in this direction, for example). And when publishers have multiple choices for ad networks, they’ll start asking for guarantees and better margins. That will cut into Glam’s already unprofitable business model.

Not only will competition hurt Glam, but their network partners will leave them once they grow to a certain size. As soon as it costs less to simply hire a salesperson instead of paying Glam 40% of revenue, they’ll leave.

So while I think Glam is great, i don’t see them as the redefinition of new media and I do see some real problems with their business model. Whoever creates the content and the page views owns the real assets. Whoever sells their ads for them is little more than a service provider.

The company has hired Allen & Company to represent them in the transaction, and has been distributing a private placement document to potential investors. They’ve actually distributed it a little too liberally – we have a copy and have embedded it at the bottom of this post.

Glam has driven revenue aggressively and say they’ll get to $21 million this year, and $150 million next year. Losses this year are expected to be around $3.7 million.

But the company is driving that revenue by selling ads for partner websites, not on their own page views. A minimal amount of research into their business shows that the company is an ad network, not a content site.

In the private placement document, Glam describes itself in the first sentence as “Glam Media is a Web 2.0 distributed media company that is number one in reach for women as reported by comScore Media Metrix.” I believe this is a perversion of the term “Web 2.0″ (see below – any company this deep in SEO shenanigans is very Web 1.0 focused) and the company certainly is not the largest womens site on the Internet. While revenue growth looks good, Glam isn’t really a content site. They’re little more than an ad network that is claiming the traffic for all of its partners to make it look like a huge womens destination site.

Traffic Nonsense

A cornerstone of the company’s argument for raising such a large round is their tremendous growth over the last twelve months. They boast of faster growth than MySpace, and claim to be the no. 1 womens website on the Internet with 19.1 million unique monthly users:

Glam Media has grown from 782,000 unique users in June 2006, to 19.1 million unique users in June 2007. By way of comparison, MySpace grew from 1.6 to 15.6 million unique users the year prior to its acquisition by News Corporation in July 2005. Glam has been ranked as the highest in traffic growth in the Top Web 100 web properties by comScore Media Metrix for the past 6 months. By May 2007, the Company had reached #1 ranking (in terms of traffic) in the women’s category, per comScore Media Metrix, within only 20 months after launch, beating iVillage/NBC which has held the top position for over nine years. Glam continues to be the #1 ranked website in the women’s category with a 23% lead ahead of iVillage/NBC, 85% ahead of AOL Living and 185% ahead of all CondeNast websites combined.

The problem is that it’s all complete nonsense. The growth in comscore numbers has nothing to do with more traffic coming to Glam’s websites. Rather, Glam sells advertising for a number of very large partners (see list of some of the largest to the right) and is able to claim credit at Comscore for their user numbers. So the comscore numbers for sites such as MyYearbook, Kaboodle (recently acquired) and Meez, among dozens of others, are being used to support the 19 million unique visitor number.

Glam also owns a number of pure SEO sites like free-beauty-tips.com, celebrity-hairstyles.org and others. These sites drive a lot of traffic from search engine queries and pump up the Comscore numbers dramatically, but provide, as far as I can tell, absolutely no original content.

In fact, the numbers are so inflated that Glam.com, the main website owned by the company, brings in just 654,000 unique monthly visitors, or about 3.4% of the 19 million the company claims.

We’ve uploaded June Comscore numbers for the entire Glam network that shows where these 19 million users are really coming from – other sites. See Glam’s Comscore breakdown here.

There is no way that this site can in good conscience claim the user numbers that they do in the private placement document. Comscore has long been criticized for allowing companies to “steal” the traffic of others to make themselves look much bigger than they really are. This is a perfect example of how that kind information could be used to mislead the public and potential investors. Glam is an advertising network, and runs a very good SEO operation, but they are not the no. 1 destination site on the Internet for women.

Update: Matt Marshall at Venture Beat writes a very long post coming to a completely different conclusion. I’m not sold, but judge for yourself. Different viewpoints are good.

The funding was led by Duff Ackerman & Goodrich Ventures (DAG), with participation from existing investors Accel Partners, Draper Fisher Jurvetson, WaldenVC, and Information Capital. The money will be used to accelerate the growth of the network on the Web and expand the sales and editorial teams.

The Hearst/Marie Claire deal is a major move on the part of the fashion magazine industry. Typically high-fashion magazines horde their editorial content for their print versions. Magazine Web sites are a hodgepodge of advertising and blurbs. Bringing real magazine content to the online network is a smart move that is a long time coming. Glam Media reaches over 7 million global unique visitors per month and is a top 10 women’s property, according to comScore Media Metrix October 2006 reports. So why has it taken so long?

“From a business perspective, print magazines are an incredible place. Whereas all other offline mediums have been declining, print magazines have not been declining,” said Samir Arora, chairman and founder of Glam Media. “They’ve been steady at about 17 percent of advertising over the last five years and most of their focus is on print, as opposed to online.”

Arora pointed out that online advertising has not been geared towards women in the same way that offline magazine traditionally is.

“In 2004, under 50 percent of ecommerce was targeted towards women and in real life, that’s not the case, it’s more like 80 percent,” he said. “But when you go online, these magazines’ Web sites have largely been places to drive subscription to the print magazine. So whenever there is a medium change, it’s rare that someone that is dominating one medium also dominates the new medium.”

That’s what Glam wants to do and the notion that women-targeted networks should be more than short workouts and bathing suit ads is the right way to go about it, which this woman thinks makes the company a good investment.