Federated Media closes on $50 million

FM founder John Battelle, who was also behind Wired and the Industry Standard, says that the investment was for a minority stake in FM.

Federated Media Publishing, which represents advertising sales for a network of Web sites, ended months of speculation late Monday with word that it closed on a $50 million investment from late-stage backer Oak Investment Partners.

Fred Harman, general partner at Oak, will join FM's board of directors.

FM founder John Battelle, who was also behind Wired and the Industry Standard, said that the investment was for a minority stake in the Sausalito, Calif.-based company. He did not comment on whether the company's previous investors participated in the round, nor did he detail FM's valuation on the investment, which has been pinned at $200 million. Early investors were J.P. Morgan Partners, the New York Times Company, and the Omidyar Network, among others.

Rumors have been swirling around the company since January, when FM hired the investment bank GCA Savvian Advisors to vet potential backers. During that time, FM reportedly turned down a buyout offer of $100 million.

Battelle said in an interview that FM plans to use the money to grow its network of publishing partners and build out a creative services group for marketing campaigns that would run on its network. The funds could also be used to invest in FM's publishing partners, Battelle said. The company represents ad sales for sites including Boing Boing, Digg, and Silicon Alley Insider.

"We plan to accelerate what we're already doing. Working closely with our partners, but with better resources," Battelle said.

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