Outbrain gets rewarded for finding a smarter way

Outbrain, which has come up with a different take on collaborative Internet filtering, has closed a $5 million A-round investment with Gemini Israel Funds, Lightspeed Venture Partners, and GlenRock Israel.

The start-up makes a rating widget for blogs and RSS platforms that lets you personalize recommendations, the idea being to help point readers to the better blog and news content on the Internet.

Will the concept survive the economic contraction that's pressuring an increasing number of Web start-ups? We'll only know with 20/20 hindsight. But while the days of easy finance capital may be over for now, good ideas still get funded.

It also helps if you have a reassuring pedigree. The co-founders of Outbrain are Yaron Galai, who helped start Quigo (since bought by AOL), and Ori Lahav, a former R&D exec at Shopping.com. What's more, Outbrain now claims that thousands of Web sites have since installed its widget and that "millions of ratings and recommendations are being served" each day.

Earlier this year, Galai presented before a audience of venture capitalists at Microsoft's Mountain View, Calif., campus. His was one of several Israeli start-ups brought to Silicon Valley auditioning for outside investment. Like Galai, most of these folks were experienced entrepreneurs. Most of what I saw that day made me nod my head in agreement that yes, this idea had potential.