Glam Media Controversy

Christina at eBeauty Daily tipped me off to the controversy currently surrounding the Glam network, which advertises on this blog. I don’t have any strong opinions one way or the other about the whole situation, but I thought it in the best interest of full disclosure to let you know what’s happening.

Here’s the blog post that started it all:

Glam Media, which is mostly an ad network but also owns a group of sites focused on women, is actively attempting to raise $200 million in a private round of financing. The company previously raised $18.5 million in December 2006.The company has hired Allen & Company to represent them in the transaction, and has been distributing a private placement document to potential investors. They’ve actually distributed it a little too liberally - we have a copy and have embedded it at the bottom of this post.

Glam has driven revenue aggressively and say they’ll get to $21 million this year, and $150 million next year. Losses this year are expected to be around $3.7 million.

But the company is driving that revenue by selling ads for partner websites, not on their own page views. A minimal amount of research into their business shows that the company is an ad network, not a content site.

Read the whole article at TechCrunch.

And a commentary that draws different conclusions:

In an era when Web advertising networks are red hot, Glam lays claim to being one of the hottest.Focused on gathering up female-oriented Web sites, and then selling advertising on their pages, Glam says it is the fastest growing property on the Web, and is about to sign a whopping $1 billion advertising deal.

But Glam is becoming a magnet for controversy. While investors appear ready to invest at high valuations (see our past coverage), Glam has also sparked ire from jealous competitors, who claim it is a sham. They say Glam is not a destination site, and just a network. Glam, meanwhile, says it never claimed to be a destination site — but spins the message differently: It says it has the largest “reach” among women on the Web.

Read the whole article at VentureBeat.

And Christina’s thoughts on the matter:

TechCrunch and VentureBeat have attempted to go all undercover on Glam and expose what they see as fraudulent numbers that Glam is using in their attempt to raise more capital.  They also accuse them of using black hat SEO (search engine optimization) techniques, using sites that have nothing to do with Glam and/or women in their numbers, and other shady insinuations.  Both sites accusing Glam have relationships with Sugar Publishing and/or Federated Media, who are in competition with Glam.

My view:

TC and VB are trying to make Glam out to be nothing but a shadow of what it says it is.

Read the whole article at eBeauty Daily.