Investors follow trail of geo-tracking firm
As geographic targeting gains momentum, a Net-mapping technology company receives a $10.5 million investment from AOL Time Warner Ventures and other investors.
Digital Envoy received first-round investments from strategic partners including Siemens Venture Capital and H&Q Asia Pacific, as well as venture capitalists Frontier Capital, Cordova Ventures and CrossBow Ventures. The company said it is using the funds to expand its work force and market its products.
The Atlanta-based company's growth contrasts widespread cutbacks at tech-focused companies. Its technology and competing products have caught on with online businesses because they localize content and advertising, improve the delivery of Web pages, and help organizations stay within legal boundaries increasingly being imposed online.
Yahoo, for example, butted heads with the French government last year over its auctions of Nazi paraphernalia to French citizens. The online portal recently signed a deal to use geo-targeting technology from Akamai Technologies to deliver consumers online ads based on their physical location.
Digital Envoy develops an Internet-mapping technology called NetAcuity, which can pinpoint the geographic location of computer users by country, state, city and demographic marketing area, a term borrowed from ranking firm Nielsen that targets a broader region such as the Bay Area. The technology also can determine a computer's Net connection speed, allowing a Web site to deliver content or rich media advertising more efficiently.
Web businesses such as 24/7 Media use such technology to deliver targeted advertising based on the visitor's location. Streaming media companies including iBeam and CinemaNow employ the software to send streaming content to authorized viewers based on their geography.
Competing geo-tracking products also have caught investors' attention. In April, Digital Envoy rival Quova acquired European company RealMapping in a bid to dominate the market overseas. The purchase followed a $21 million investment in March from such investors as Softbank Venture Capital, IDG Ventures and VeriSign.
Len Leader, president of AOL Time Warner Ventures, said that geo-targeting technology "is of growing importance on the Internet" because it lets global companies establish a local presence online. By determining the location of Web visitors, sites can comply with local legal requirements when delivering content, for example.
Such technology has its flaws, however. For example, it cannot determine the origin of consumers using America Online or other proxy servers. Visitors using AOL appear to originate largely from Virginia, where the company's servers are located, knocking roughly 22 million U.S. Net users from such radar.
Digital Envoy said that its geo-mapping technology is roughly 99 percent accurate at determining the consumers' country origin. On the city level, its technology cannot account for the origin of AOL users; still, the company said its technology is "highly accurate."