LONDON Silicon Valley venture capital firm DAG Ventures has joined the backers of online advertising startup OpenX, leading a series C funding round of $10 million that takes total investment in the company to $31 million.
OpenX is an independent competitor to advertising services offered by Google (GOOG.O), Microsoft (MSFT.O), Yahoo (YHOO.O) and Time Warner's (TWX.N) AOL. It is run by industry veteran and former head of Yahoo's search business, Tim Cadogan,
The company said on Tuesday it would use some of the new funding to accelerate development of an online ad marketplace it launched last month that is designed to make it easier for smaller Web publishers and advertisers to find each other.
Advertisers are faced with an explosion in the number of Websites run by small publishers, some of whom have valuable niche audiences, while the publishers often find it hard to get the best value from ad platforms run by the likes of Google.
Cadogan said OpenX, whose more than 300 billion ad impressions per month put it in the same league as Google's DoubleClick in terms of volume, would now be able to explore other forms of online advertising, such as video and mobile.
"We increasingly see a range of opportunities - new markets, related markets, new product lines that we could get into," he told Reuters by telephone from OpenX's headquarters in California. The company also has offices in London and Poland.
Publishers are increasingly turning to Internet advertising as they chase dwindling audiences for their print products, who are racing online. Some, like Rupert Murdoch's News Corp (NWSA.O), are considering charging consumers for online content.
Cadogan said he believed those publishers who could survive the next year or two would have many more possibilities to make money out of their online offers than they currently do.
"I think we're on the cusp of a renaissance in online advertising outside of search," he said.
"The next year is definitely tough, but I do think within the next one to two years you're going to see a new level of quality, value, and consumer value of ads."
Existing investors in OpenX -- Accel Partners, Index Ventures, Mangrove Capital, First Round Capital and company Chairman Jonathan Miller -- also participated in the latest funding round.
Miller has recently been appointed News Corp's new digital media chief.
(Reporting by Georgina Prodhan; Editing by Rupert Winchester)