Making Money Advertising

Online forums and communities present a largely untapped opportunity for making money — at least according to Dan Gill, cofounder and chief executive of Huddler.

The San Francisco startup is officially launching today. It’s one of those weird launches where the company has actually been working with customers for more than a year, and is only now getting around to telling the media that it exists. Gill said he wanted to make sure the technology was solid before doing too much to publicize it and attract competition.

Community-building software is a broad category, but Huddler approaches the market with a specific audience and mission. It’s looking for popular, product-focused forums that are built on either vBulletin or phpBB technology. Huddler contacts the owner of the site, offering to modernize the forum and bring in more money too.

Gill gave me a long list of benefits that Huddler can offer over older platforms. It gives the sites a makeover, so they look a bit less old-fashioned, not to mention more advertising-friendly. It optimizes the pages for search engines, and also makes them easier to share through Facebook Connect. And all the software is hosted online, rather than installed on someone’s computer, which means there’s less hassle for whoever’s managing the site.

Financially, there’s not much risk to the forum owner, since the software is free. Huddler is only paid by through a percentage of the increased revenue that it brings to a site. That revenue boost comes in a number of ways, Gill said — since the sites are product-focused, Huddler creates a product page with a link where visitors can buy the item in question. It also allows companies selling related products to create their own pages on the forum and engage with the community. And of course the sites can run advertising.

The transition to Huddler can be a challenging one because of the technology issues, as well as the likelihood that change will upset some forum members. Gill didn’t offer any details, but he hinted that he has seen his share of angry comments from users who didn’t like a new forum. But Huddler has become more proficient at both moving content to a new site and preparing users for the change, he said.

There are now 24 sites using Huddler, adding up to a total of 9 million unique monthly visitors. The success stories include EpicSki, which saw a 70 percent increase in natural search traffic after switching to Huddler, and DenimBlog, which doubled pageviews in two months and is now bringing in three times the amount of revenue.

Huddler raised $5.5 million in funding from New Enterprise Associates last year. For now, the company is focusing on existing forums because they’ve already got the audience, but Gill said, “There’s no reason you won’t be able to start your own Huddles in the future.”

[image via Flickr/Daniel Borman]

Next Story: Salesforce: Yes, Chatter really does improve productivity Previous Story: Otoy scores important deals for its server gaming technology

This post originally appeared on Forbes.com, where Mashable regularly contributes articles about social media, business and technology.

Why do web startups raise money? And how? These are two questions that account for a huge corpus of tech and financial discussion. Despite the complexity involved in these questions, their answers can be condensed into an eight-word statement: Someone somewhere thought he’d make his money back.

If you consider a few notable fundraising efforts from popular web startups, you begin to see how this aforementioned hypothetical “someone” might think his investment would be prudent and even profitable. Here are five popular web startups we’ve seen raising large amounts of money since the 2008 downturn, and a quick look at how they were able to do so.

1. Groupon

Groupon offers daily discounts for local businesses; these coupons can be redeemed only when a significant number of people choose to use them. For example, Groupon recently partnered with Gap to offer shoppers $50 worth of clothing and accessories for $25.

While daily deals and critical-mass coupons are fine and dandy for retailers and consumers, Groupon also takes its cut. The company usually keeps half of the coupon price and is expected to report $400 million in revenue for 2010.

Groupon has brought in increasing interest from investors. Since its relatively modest $1 million angel round in 2007, this startup has gone on to garner a total of $173 million over the past three years, the vast majority of which was raised after the 2008 economic crash. After collecting $6.8 million during its Series A round of funding, Groupon managed to bring in $30 million during its Series B round in December 2009, which was led by Accel Partners. Its headline-making $135 million Series C was led by Digital Sky Technologies, the famous investors behind Zynga and class='blippr-nobr'>Facebookclass="blippr-nobr">Facebook.

Without question, having a revenue stream as a core part of the company’s main product is a popular feature (with VCs) of funded startups. Groupon has that covered. Aside from the value the product offers, at scale, it also is intended to generate massive amounts of revenue. Unlike some social networking apps that require partnerships and advertising dollars to support an unrelated product for end users, generating revenue is Groupon’s most basic function.

2. Zynga

Zynga, creator of popular casual games, including FarmVille and Mafia Wars, boasts a revenue model based on small end-user transactions in virtual currency, which users spend on virtual goods. Zynga has proved that microtransactions at the scale of Facebook’s platform are big business worth serious investment.

Despite violating a core tenet of web startup wisdom: Never build your business on someone else’s platform, Zynga has racked up huge rounds and equally huge valuations. All told, Zynga has taken $519 million in funding, the bulk of which was raised after December 2009. In that month, the company closed a $180 million Series C from such firms as Andreessen Horowitz, Digital Sky and others. And in June 2010, Zynga took a $300 million Series D from class='blippr-nobr'>Googleclass="blippr-nobr">Google and SoftBank. With more than 56 million Americans playing social games, it’s no wonder why investors are putting down serious money in this industry.

3. Twitterclass="blippr-nobr">Twitter

Since its launch in 2006, micro-blogging service Twitter has become a social media darling, raising a total of $160 million since its 2007 Series A. The company raised $135 million over two rounds in 2009 from such firms as Benchmark, Morgan Stanley, Union Square and others.

Notably, all this money was raised before Twitter had found any significant source of revenue. This fact bucks a major trend in investment (that VCs like to see clear revenue stream before investing), but Twitter pulled it off because of one major factor: People.

Not only was the service growing exponentially, but it also had the endorsement (and daily usage) of pop culture celebrities such as Ashton Kutcher and Justin Timberlake. But nothing topped Twitter’s Oprah appearance, a watershed moment that brought a deluge of mainstream attention and a glut of new users.

Between the escalating adoption and increasing media attention, Twitter has become an opportunity investors can’t turn down.

4. Asana

Facebook Co-Founder Dustin Moscovitz and Facebook engineering lead Justin Rosenstein teamed up after leaving Facebook to found Asana, a startup that is reportedly building project management software. It is still in early development and hasn’t launched a product yet. This is one case where the product is presumed to be a sure bet because of the past experience and intellectual caliber of its creators.

Sometimes, a startup can raise money with nothing but pure pedigree. When a handful of big tech company engineers leave the mothership to found a startup, as happens in Silicon Valley from time to time, they can often drum up a round of funding before pencil meets paper.

Over seven months in 2009, the team was able to raise $10.2 million in two rounds of funding. In this case, investors are banking on Moscovitz’s and Rosenstein’s past successes. In a way, it’s as if they are investing in Beethoven’s next symphony or Van Gogh’s next canvas (i.e. the next Facebook).

5. Ustreamclass="blippr-nobr">ustream

Finally, there’s Ustream, a live interactive broadcast platform, which raised an impressive $75 million round of funding earlier this year from SoftBank. Previously, the startup had brought in nearly $13 million between a small 2007 seed round and a 2008 Series A. That’s a huge jump.

Despite a range of competitors in the online video world, including class='blippr-nobr'>YouTubeclass="blippr-nobr">YouTube, Ustream has made its mark on the live video market. Ustream has demonstrated mass-scale success in this arena by brokering deals to show live online footage of red carpet events, celebrity press conferences and even the 2008 Presidential Inauguration.

While challenging an industry leader like YouTube isn’t usually a prudent path to funding, doing so successfully through innovative technologies and user acquisition strategies can pay off.

More Business Resources from Mashable:

- 10 Emerging Social Platforms and How Businesses Can Use Them/> - 10 Free WordPress Themes for Small Businesses/> - The Future of Ad Agencies and Social Media/> - HOW TO: Run Your Business Online with $10 and a Google Account/> - 5 New Ways Small Business Can Offer Location-Based Deals

Image courtesy of iStockphotoclass="blippr-nobr">iStockphoto, Sage78

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Obama Says Fox <b>News</b> Promotes &#39;Destructive&#39; Viewpoint - NYTimes.com

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Obama Says Fox <b>News</b> Promotes &#39;Destructive&#39; Viewpoint - NYTimes.com

Fox News Channel responds to President Obama's sharp critique of the channel in a Rolling Stone interview.

Brad Friedman and Desi Doyen: Green <b>News</b> Report: September 28 <b>...</b>

IN 'GREEN NEWS EXTRA' (see links below): Halliburton Makes the Dow Jones Sustainability Index (and pigs fly); More than 100 Arrested at White House Demanding End to Mountaintop Removal; Australian climate activists close down world's ...

Obama Says Fox <b>News</b> Is Hurting The Growth Of The United States

President targets Murdoch, hedge fund executives, and whiny Democrats in Rolling Stone interview.

Online forums and communities present a largely untapped opportunity for making money — at least according to Dan Gill, cofounder and chief executive of Huddler.

The San Francisco startup is officially launching today. It’s one of those weird launches where the company has actually been working with customers for more than a year, and is only now getting around to telling the media that it exists. Gill said he wanted to make sure the technology was solid before doing too much to publicize it and attract competition.

Community-building software is a broad category, but Huddler approaches the market with a specific audience and mission. It’s looking for popular, product-focused forums that are built on either vBulletin or phpBB technology. Huddler contacts the owner of the site, offering to modernize the forum and bring in more money too.

Gill gave me a long list of benefits that Huddler can offer over older platforms. It gives the sites a makeover, so they look a bit less old-fashioned, not to mention more advertising-friendly. It optimizes the pages for search engines, and also makes them easier to share through Facebook Connect. And all the software is hosted online, rather than installed on someone’s computer, which means there’s less hassle for whoever’s managing the site.

Financially, there’s not much risk to the forum owner, since the software is free. Huddler is only paid by through a percentage of the increased revenue that it brings to a site. That revenue boost comes in a number of ways, Gill said — since the sites are product-focused, Huddler creates a product page with a link where visitors can buy the item in question. It also allows companies selling related products to create their own pages on the forum and engage with the community. And of course the sites can run advertising.

The transition to Huddler can be a challenging one because of the technology issues, as well as the likelihood that change will upset some forum members. Gill didn’t offer any details, but he hinted that he has seen his share of angry comments from users who didn’t like a new forum. But Huddler has become more proficient at both moving content to a new site and preparing users for the change, he said.

There are now 24 sites using Huddler, adding up to a total of 9 million unique monthly visitors. The success stories include EpicSki, which saw a 70 percent increase in natural search traffic after switching to Huddler, and DenimBlog, which doubled pageviews in two months and is now bringing in three times the amount of revenue.

Huddler raised $5.5 million in funding from New Enterprise Associates last year. For now, the company is focusing on existing forums because they’ve already got the audience, but Gill said, “There’s no reason you won’t be able to start your own Huddles in the future.”

[image via Flickr/Daniel Borman]

Next Story: Salesforce: Yes, Chatter really does improve productivity Previous Story: Otoy scores important deals for its server gaming technology

This post originally appeared on Forbes.com, where Mashable regularly contributes articles about social media, business and technology.

Why do web startups raise money? And how? These are two questions that account for a huge corpus of tech and financial discussion. Despite the complexity involved in these questions, their answers can be condensed into an eight-word statement: Someone somewhere thought he’d make his money back.

If you consider a few notable fundraising efforts from popular web startups, you begin to see how this aforementioned hypothetical “someone” might think his investment would be prudent and even profitable. Here are five popular web startups we’ve seen raising large amounts of money since the 2008 downturn, and a quick look at how they were able to do so.

1. Groupon

Groupon offers daily discounts for local businesses; these coupons can be redeemed only when a significant number of people choose to use them. For example, Groupon recently partnered with Gap to offer shoppers $50 worth of clothing and accessories for $25.

While daily deals and critical-mass coupons are fine and dandy for retailers and consumers, Groupon also takes its cut. The company usually keeps half of the coupon price and is expected to report $400 million in revenue for 2010.

Groupon has brought in increasing interest from investors. Since its relatively modest $1 million angel round in 2007, this startup has gone on to garner a total of $173 million over the past three years, the vast majority of which was raised after the 2008 economic crash. After collecting $6.8 million during its Series A round of funding, Groupon managed to bring in $30 million during its Series B round in December 2009, which was led by Accel Partners. Its headline-making $135 million Series C was led by Digital Sky Technologies, the famous investors behind Zynga and class='blippr-nobr'>Facebookclass="blippr-nobr">Facebook.

Without question, having a revenue stream as a core part of the company’s main product is a popular feature (with VCs) of funded startups. Groupon has that covered. Aside from the value the product offers, at scale, it also is intended to generate massive amounts of revenue. Unlike some social networking apps that require partnerships and advertising dollars to support an unrelated product for end users, generating revenue is Groupon’s most basic function.

2. Zynga

Zynga, creator of popular casual games, including FarmVille and Mafia Wars, boasts a revenue model based on small end-user transactions in virtual currency, which users spend on virtual goods. Zynga has proved that microtransactions at the scale of Facebook’s platform are big business worth serious investment.

Despite violating a core tenet of web startup wisdom: Never build your business on someone else’s platform, Zynga has racked up huge rounds and equally huge valuations. All told, Zynga has taken $519 million in funding, the bulk of which was raised after December 2009. In that month, the company closed a $180 million Series C from such firms as Andreessen Horowitz, Digital Sky and others. And in June 2010, Zynga took a $300 million Series D from class='blippr-nobr'>Googleclass="blippr-nobr">Google and SoftBank. With more than 56 million Americans playing social games, it’s no wonder why investors are putting down serious money in this industry.

3. Twitterclass="blippr-nobr">Twitter

Since its launch in 2006, micro-blogging service Twitter has become a social media darling, raising a total of $160 million since its 2007 Series A. The company raised $135 million over two rounds in 2009 from such firms as Benchmark, Morgan Stanley, Union Square and others.

Notably, all this money was raised before Twitter had found any significant source of revenue. This fact bucks a major trend in investment (that VCs like to see clear revenue stream before investing), but Twitter pulled it off because of one major factor: People.

Not only was the service growing exponentially, but it also had the endorsement (and daily usage) of pop culture celebrities such as Ashton Kutcher and Justin Timberlake. But nothing topped Twitter’s Oprah appearance, a watershed moment that brought a deluge of mainstream attention and a glut of new users.

Between the escalating adoption and increasing media attention, Twitter has become an opportunity investors can’t turn down.

4. Asana

Facebook Co-Founder Dustin Moscovitz and Facebook engineering lead Justin Rosenstein teamed up after leaving Facebook to found Asana, a startup that is reportedly building project management software. It is still in early development and hasn’t launched a product yet. This is one case where the product is presumed to be a sure bet because of the past experience and intellectual caliber of its creators.

Sometimes, a startup can raise money with nothing but pure pedigree. When a handful of big tech company engineers leave the mothership to found a startup, as happens in Silicon Valley from time to time, they can often drum up a round of funding before pencil meets paper.

Over seven months in 2009, the team was able to raise $10.2 million in two rounds of funding. In this case, investors are banking on Moscovitz’s and Rosenstein’s past successes. In a way, it’s as if they are investing in Beethoven’s next symphony or Van Gogh’s next canvas (i.e. the next Facebook).

5. Ustreamclass="blippr-nobr">ustream

Finally, there’s Ustream, a live interactive broadcast platform, which raised an impressive $75 million round of funding earlier this year from SoftBank. Previously, the startup had brought in nearly $13 million between a small 2007 seed round and a 2008 Series A. That’s a huge jump.

Despite a range of competitors in the online video world, including class='blippr-nobr'>YouTubeclass="blippr-nobr">YouTube, Ustream has made its mark on the live video market. Ustream has demonstrated mass-scale success in this arena by brokering deals to show live online footage of red carpet events, celebrity press conferences and even the 2008 Presidential Inauguration.

While challenging an industry leader like YouTube isn’t usually a prudent path to funding, doing so successfully through innovative technologies and user acquisition strategies can pay off.

More Business Resources from Mashable:

- 10 Emerging Social Platforms and How Businesses Can Use Them/> - 10 Free WordPress Themes for Small Businesses/> - The Future of Ad Agencies and Social Media/> - HOW TO: Run Your Business Online with $10 and a Google Account/> - 5 New Ways Small Business Can Offer Location-Based Deals

Image courtesy of iStockphotoclass="blippr-nobr">iStockphoto, Sage78

For more Business coverage:

class="f-el">class="cov-twit">Follow Mashable Businessclass="s-el">class="cov-rss">Subscribe to the Business channelclass="f-el">class="cov-fb">Become a Fan on Facebookclass="s-el">class="cov-apple">Download our free apps for iPhone and iPad

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Obama Says Fox <b>News</b> Promotes &#39;Destructive&#39; Viewpoint - NYTimes.com

Fox News Channel responds to President Obama's sharp critique of the channel in a Rolling Stone interview.

Brad Friedman and Desi Doyen: Green <b>News</b> Report: September 28 <b>...</b>

IN 'GREEN NEWS EXTRA' (see links below): Halliburton Makes the Dow Jones Sustainability Index (and pigs fly); More than 100 Arrested at White House Demanding End to Mountaintop Removal; Australian climate activists close down world's ...

Obama Says Fox <b>News</b> Is Hurting The Growth Of The United States

President targets Murdoch, hedge fund executives, and whiny Democrats in Rolling Stone interview.

eric seiger

Obama Says Fox <b>News</b> Promotes &#39;Destructive&#39; Viewpoint - NYTimes.com

Fox News Channel responds to President Obama's sharp critique of the channel in a Rolling Stone interview.

Brad Friedman and Desi Doyen: Green <b>News</b> Report: September 28 <b>...</b>

IN 'GREEN NEWS EXTRA' (see links below): Halliburton Makes the Dow Jones Sustainability Index (and pigs fly); More than 100 Arrested at White House Demanding End to Mountaintop Removal; Australian climate activists close down world's ...

Obama Says Fox <b>News</b> Is Hurting The Growth Of The United States

President targets Murdoch, hedge fund executives, and whiny Democrats in Rolling Stone interview.

http://www.businessweek.com/magazine/content/07_18/b4032066.htm

http://www.businessweek.com/magazine/content/07_18/b4032066.htm

http://www.businessweek.com/magazine/content/07_18/b4032066.htm

http://money.cnn.com/magazines/fortune/fortune_archive/1999/10/25/267811/index.htm

http://money.cnn.com/magazines/fortune/fortune_archive/1999/10/25/267811/index.htm

http://money.cnn.com/magazines/fortune/fortune_archive/1999/10/25/267811/index.htm

http://www.businessweek.com/magazine/content/07_18/b4032066.htm