Contextual Ad Provider Linkstorm Completes $4.2 Million Third Round

Online ad firm Linkstorm has raised a third round financing of $4.2 million from about 85 individual investors, including 25 previous backers such as Esther Dyson and Bob Weissman, former CEO/chairman of Dun and Bradstreet. The New York-based company also attracted 60 new investors for this round, including Jim Rutt, who is a principal of JPR Ventures, and formerly CEO of Network Solutions; and Jeff Ballowe, formerly president of Ziff Davis’ interactive media division and publisher of PC Magazine.

I spoke briefly with Linkstorm CEO David Sidman, who founded the company in August 2000. He said the company has raised a total of $9 million to date, all from 150 individual investors in the past seven years. Since the company was started right in the middle of the dotcom bust, he’d found it difficult to round up institutional backers and has relied on individuals ever since.

Linkstorm opened shop under the name Content Directions, which focused on content indexing for educational and professional publishing companies. Two years ago, it was reborn as Linkstorm and began marketing its contextual ad system more widely. The purpose of the current funding is to increase its sales staff and target advertisers more directly. The company’s main selling point is a navigational tool that lets it create hyperlinks that point to multiple sources. For example, in the case of client Hyundai, Linkstorm inserted menus into an existing banner ad that let interested users navigate to the particular product information of their choosing. Other clients have included Ogilvy, MRM and Hachette Filipacchi, as well as Microsoft, Cisco (NSDQ: CSCO) and Hewlett-Packard. Release

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