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Undertone Networks raises millions to buy online ad upstarts

Undertone, one of the last independent online advertising networks, does not disclose terms of the deal, except to say it's worth more than $40 million.

Undertone Networks, one of the last independent online advertising networks, said Monday that it has taken its first round of private equity investment from JMI Equity, the firm that took DoubleClick private in 2005 and then sold to Google last year.

The 6-year-old Undertone would not disclose terms of the deal, except to say that the investment was worth more than $40 million.

The company didn't need to raise the money. It has been profitable since its launch in 2002, according to Undertone President Michael Cassidy. But the funds will help the company grow through acquisitions and into international markets, Cassidy said. The online ad network represents graphical and video ad sales for high-end publishers including The New York Times, USA Today, and Discovery Networks.

Undertone's independent rivals have grown scarce. Major online media companies Google, AOL, and Yahoo have bought up most of the large online ad networks and related technology in the last year or so. AOL, for example, bought Advertising.com and Tacoda; Google acquired DoubleClick; and Yahoo absorbed Right Media and Blue Lithium.

In absence of those independents, Undertone likely aims to be the next major ad network. And that means buying up smaller fish.

Without naming names, Cassidy said that there are some upstarts that are making improvements in the online advertising business. "We're on the potential acquirer side now," he said.