Glam Media raises $84 million, far short of its $200 million goal
Glam Media, the women-focused ad network, has raised $84.6 million, leaving the company valued at a rich $500 million. That still falls short of founder Samir Arora's hopes: According to a private-placement document circulating last year, he was seeking $200 million. Why'd he fall short?
Glam has a hefty publisher client list — websites it doesn't own, but for which it provides ads. (The list includes some sites which compete with Jezebel, owned by Gawker Media, the publisher of Valleywag.) Glam is also now the "largest women's network" according to ComScore, with nearly 45 million "readers."
Impressive? Not really. ComScore allows publishers to "assign" their traffic to another organization, letting ad networks pool the traffic from all client sites. If a widely used ad network like Google AdSense used this system, Google's network would be by far the largest. But, it's a disingenuous statistic, especially since Glam likes to pretend it's not an ad network.
Glam does have an argument that it's more than a network: That's because, like Microsoft has done with Facebook and Digg, and Google has done with MySpace, it buys up some sites' inventories at a guaranteed rate. That means the profit — or more likely loss — from those ad buys is entirely Glam's. But it's a very risky model. In a recent earnings call, Google executives complained that ads on MySpace weren't performing well. Google can afford that kind of risk. Can Glam? With only $84 million to play with, Arora hasn't raised the kind of bankroll that speaks well to that question.