As Twitter continues to mull over how to make money, startups are looking to capitalize on the advertising potential of the microblogging platform. Media network Glam Media is going to be launching a Twitter ad network. And today, Ad.ly, an Los Angeles-based startup, is launching a Twitter-based advertising network to connect high-end brand advertisers with celebrity and high-profile Twitter users. The idea behind the startup is simple: advertisers can pick which celeb they want to Tweet about their product and once the celeb approves the Tweet, he or she will be paid handsomely by the advertisers. Basically, Ad.ly is the middleman between advertisers and the Twitterati. In fact, founder and CEO Sean Rad says that he wants Ad.ly to be the Federated Media for Twitter.

Ad.ly’s platform is self-serve for both the Twitterati and the advertisers. So for example, an advertiser for Dell could choose which celeb or power-user to pitch their ad too and then submit a bid to a particular user. The celeb (or publisher) then approves or denies the request. Once the publisher approves the Tweet, the message is sent out via their account by Ad.ly. Each campaign requires the celeb to send out four Tweets over the course of a week. Here’s a sample Tweet that a celeb would send out. It’s important to note that each Tweet identifies Ad.ly and links to an online interactive campaign for a brand:

So how do advertisers know how well their campaign is doing on Twitter? Ad.ly features a customized dashboard that tracks click-through rates, retweets, and even the geographic location of users who retweet an ad. The startup is also in the process of launching a “machine learning client” product that would identify the makeup of a celeb’s user base and then match advertisers based on the target audience of a brand’s ad pitch. For example, the new technology will determine the breakdown of a celeb’s follower base by gender.

Each publisher sets the price of a Tweet campaign but Ad.ly will give the publisher a pricing suggestion based on variety of metrics. Ad.ly’s proprietary algorithm evaluates follower counts, authority, quality of Tweets and will help determine the Twitter’s value. And when I say that celebs get paid “handsomely,” I mean it. If a celeb has above a million followers, each Tweet gets in the five figures, with multiple Tweets about a product netting the celeb a six-figure reward (yes, for four Tweets!). Ad.ly takes a cut of what the celeb makes, but Rad wouldn’t reveal what the percentage is.

This is an interesting idea and a potentially lucrative money maker if these numbers are correct but there are a few concerns I have. First, will a celeb’s Twitter “authority” be negatively impacted by the appearance of ads within his or her stream? The second issue I have is the whole idea that a celeb will be monetizing off of other people clicking in their Tweets. I’m not sure how followers will react to this, considering many of these celebs are raking in the money as it is.

But Rad says that the ads won’t distort the quality of a celeb’s stream because the Tweets are spread out and sent every two days, and the ad campaigns that are promoted via Ad.ly’s platform are for high-end brands such as Dell, Maserati, and Hilton. He adds that ad-sponsored Tweets are clearly marked by Ad.ly so people can ignore those Tweets if they’d like. As for the monetization issue, Rad says that celebs can opt to donate any proceeds they receive from the campaign to a charity of their choice.

For the launch, Rad has accumulated an impressive list of high-profile celebs who are willing to participate in the network. Celebs include Kim Kardashian, Brooke Burke, Nicole Richie, Brody Jenner, Dr. Drew and Samantha Ronson.

Ad.ly has recently raised a Series A round of funding from GRP Partners but Rad declined to reveal the amount of funding. Ad.ly faces competition from fellow Twitter ad networks Magpie and Twittad.

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He came through earlier this morning to confirm the accuracy of the scoop, and also provided a statement from his team in order to shed more light on the imminent initiative. As we suggested, the new solution is tied to GlamApps, the company’s application platform.

Arora tells us:

With the launch of Tinker.com to help monetize “real-time” trends and events, Advertisers have been asking Glam to reach real-time stream users across multiple applications.

Unlike Social Network apps that live “inside” MySpace and Facebook, Twitter is revolutionizing the apps business by pioneering an open model- Glam sees this as the first mid and long tail of Social Apps, much like iPhone has done for mobile apps with a pay for apps model. Given internet apps are free, except for a small “pro” apps upgrades, it is vital that we can figure out a monetization quickly. Given the audience and vertical targeting Glam has developed for content publishers and the trust with brand advertisers, Glam can bring the learning to the Twitterverse. Like Portals like Yahoo and AOL offered advertisers content along with social apps like AIM, Twitter Apps Network helps Glam Media offer distributed social apps to brands- taking the next step in building a true distributed media company.

Yep, that’s still vague. Hopefully we’ll have a better understanding of what Glam Media is trying to accomplish when they share more details about the project next month.

We didn’t really ask, but Arora also shared some statistics about the current reach of the Glam network. He claims Glam Media currently boasts over 1,000 publishers with 6,000 editors/journalists/bloggers reaching 56 million unique users a month in the United States. That’s one big vertical.

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We know this because a number of third-party Twitter app developers have received an e-mail this morning from Derek Houdyshell, Network Sales and Program Director for the California company, and one of them forwarded that e-mail to us.

This is what the message reads:

Hi [REDACTED],

I am interested in discussing syndication, distribution, and advertising opportunities with you.

Glam Media is building a Twitter powered advertising platform by aggregating the best Twitter apps on the web. The demand is high and we want [REDACTED] to be part of it!

Please contact me at your earliest convenience.

Best Regards,
Derek Houdyshell
Glam Media, Inc.

The description is rather vague, but apparently Glam wants to build upon its model of wrapping an advertising network around topical websites and blogs and extend it to the host of third-party Twitter applications that have come out of Twitter’s developer ecosystem. As far as we can tell, it has little to do with Tinker, another one of its ventures related to Twitter that centers around micro-payments but it could be connected to Glam Apps (its own application platform).

We’ve asked Glam CEO Samir Arora for more information and will update when he gets back to us.

Glam Media, which has raised a massive amount of funding ($125 million reportedly) to date, is one of the fastest growing networks on the Web. Like many other companies, it had its share of layoffs and other cutbacks following the economic downturn, and in an effort to conserve cash, Glam also recently slowed down payments to its partner publishing sites.

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Tinker, the recently launched microblogging topic tracker from Glam Media, will be rolling out several new features to upgrade its service. Tinker, which we covered in depth during its launch here, allows users to quickly browse through different real-time Twitter and Facebook searches relevant to various current events, trends and breaking news. Each event, trend or news item is associated with one or more terms, which Tinker then searches for across all Tweets and then presents the relevant ones in a single stream.

Tinker is launching a people section that allows users the ability to search and discover people on Twitter. Users can find people by name, but also by location and profession. This feature ends up being a comprehensive directory of Twitter users, listed by profession, category or interest, that helps find, follow and filter people that are micro-blogging. Tinker also lets you see the most popular and influential of the Twitterati, by categorizing the people that create events and breaking news by topics such as Information Technology, Media and Real Estate. Within each category, Tinker offers sub categories of popular Twitter users. So under politics, you can search for Twitter user who blog about conservative, liberal and Republican politics.

Tinker has added a featured page, which provides users with lists of hot topics and trends to follow on Twitter, including streams on events, news, celebrities, and topics. Similar is the look and feel of the iTunes homepage, Tinker’s featured page let you browse through categories of the top trends on Twitter. And Tinker now allows a large range of topics to be tracked semantically, creating a powerful search capability across Twitter.

On of Tinker’s most innovative features is the ability to go viral with widgets. After creating an event, users can share the event’s feed using an embeddable widget, which they can place on their webpage or blog. These widgets allow users to both view the feed of an event and to submit their own messages, which can then be sent to Twitter and eventually sites like Facebook and FriendFeed. Samir Arora, Glam Media’s CEO and founder, says that the widgets are being used by brands and companies for advertising purposes. For example, the movie “Away We Go” has created a branded widget and event page, with a video and Twitter stream that can be embedded on any site (see below). Tinker says that the site is now running over 50 million widgets and applications a month on distributed sites and networks. Widgets are getting a slight upgrade, and now let users make widgets in different sizes and colors.

As we said in our earlier review of Tinker, the site is the perfect answer to Fred Wilson’s call for a Twitter events firehose—a place where users could input a handful of keywords collectively referred to as an ‘event,’ which could be used to monitor current news as it happens in near real-time. Of course, there are trending topics on Twitter (which can be misleading) as well as a plethora of Twitter apps out there that try to tell us what exactly the buzz is on Twitter. But Tinker does this and more by doing most of the work for users-by categorizing topics and events, dividing Twitter users by the topics they Tweet about, and letting anyone embed real-time streams into their own sites.
50 million impressions

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Not that Glam isn’t putting their funding to good use. In 2008, the company made a couple of strategic acquisitions and keeps on displaying a clear focus on international growth, while at the same time launching interesting side projects like Tinker.

Late last year, we reported that Glam Media was slowing down payments to its publishers as well as making significant pay cuts although it self-reported its Q4 to have been ’surprisingly strong’. One month later, ComScore data showed Glam Media was one of the fastest growing websites in the US. It was also the ninth largest publisher of display ads, serving up an estimated 2.1 billion ad impressions per month.

It will be interesting to watch how Glam performs the next few quarters.

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Micro-blogging is getting micro-payments. Tinker, the micro-blogging topic tracker from Glam Media which we covered in depth last night, is now live. The service tracks specific topics on both Twitter and Facebook, and allows these “event” streams to be republished as standalone widgets on blogs and other sites across the Web. I’ve embedded an example below showing the subsequent Tweets about our original article.

With the launch, Glam Media is also creating a professional micro-blogging network for journalists and bloggers who want to sign up to cover specific events or topics via Twitter or Facebook. It will be called the Tinker Micro-Bloggers Network. This will be a vetted subset of Tinker users who are advertiser-friendly. Glam is working on a micro-payments system to share revenues with approved micro-bloggers from ads in their associated widgets and Tinker streams.

All existing Glam Media publishers are automatically part of the Tinker Micro-Blogging Network. Glam also hopes to attract professional bloggers and journalists, who are pre-qualified (including any bloggers who are part of other blog advertising networks such as Federated Media, BlogHer, and TotalBeauty). Others can apply to be part of the network as well.

In order to make advertisers more comfortable with the concept of associating their brands with these micro-conversations, Tinker will offer a “safe” mode so that ads never appear near obscenities or specified keywords. Event moderators can also use the filters to block specific keywords or people from appearing in their curated stream.

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The online advertising business is in for a rough patch, especially for display advertising. The signs are everywhere. Yahoo, the biggest publisher of display ads on the Web, reported a 2 percent decline in display ad revenues in the fourth quarter, and the New York Times is seeing even steeper declines.

There is just way too much advertising inventory out there, and Websites are actually trying to show less ads per page to reduce ad clutter and keep advertising rates from cratering. The chart above from comScore’s 2008 Digital Year in Review shows that the number of display ads served in the U.S. is actually slightly down from a year ago. Even so, comScore estimates that 4.5 trillion ads were served to U.S. consumers last year. That comes to 2,000 ads per month per person.

And how many of those ads even register? The more ads that get thrown at us, the more we learn to ignore them.

As a consequence of the declining display ad revenues and the over-saturation of ads, there is simply no need for the 300-plus ad networks out there. And what we are seeing now is the stronger ad networks are picking up funding to shore up their positions and the weaker ones are getting bought. Just last night, for instance, Glam Media bought AdaptiveAds. This morning SocialMedia raised $6 million rather than the initial $20 million it was looking for and mobile ad network AdMob raised $12.5 million.

AdMob described its funding round as a “series C extension” of the $15.7 million it raised from Sequoia just last October. CEO Omar Hamoui confirmed to me that today’s funding was at the same valuation as the last one. Any funding in this environment is an accomplishment, but it does support my shoring up thesis. And AdMob is 100% focused on ads that appear on mobile phones, especially the new crop of Web-capable devices. This is still a high-growth area (and is not represented in the chart above), but it makes you wonder if those mobile ad rates are also feeling the pressure. Update: They are.

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Glam Media has acquired AdaptiveAds, a startup based in Mumbai, India that serves display ads targetable by the demographic characteristics brand advertisers understand (such as “Women 24-40, Fashionista, Beauty”). It calls its contextual display ads BrandWords. They will now be called Glam AdaptAds.

In addition to the ad targeting, AdaptiveAds brings a self-serve ad server for ad agencies, as well as “brand engagement” tracking and reporting tools.

The purchase price was not disclosed, but AdaptiveAd was shopping around a series B round with a valuation in the $25 million to $40 million range when Glam entered the picture and snapped them up. The three-year old company raised $2 million in late 2007, and then another $1.5 million in a series A, for a total of $3.5 million. Draper Fisher Jurvetson is an investor in both AdaptiveAds and Glam Media.

Glam Media sites and its affiliate network collectively saw the second-fastest audience growth last year among comScore’s top 100 Web properties. It was also the ninth largest publisher of display ads, serving up an estimated 2.1 billion ad impressions per month.

With the acquisition, Glam will be keeping 20 employees, bringing its total up to 200. This comes after layoffs and other recent cutbacks. Also, in an effort to conserve cash, Glam has slowed down payments to its partner publishing sites.

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Of the top 100 sites on the Web, which ones grew the fastest in 2008? In a report it is preparing to release tomorrow, The comScore 2008 Digital Year In Review (which you can sign up for here), comScore ranks the 20 fastest-growing Web properties. These are out of the largest 100 sites overall. They are shown in the chart above, as measured by growth in unique visitors. (Interestingly, in a separate list of the ten largest sites, only eBay showed a decline from 2007).

Most of the big gains among the fastest growers came because acquisitions (CBS acquiring Cnet, Everyday Health acquiring Revolution Health, JPMorgan Chase acquiring Washington Mutual) or traffic and business partnerships (Break Media, Glam Media, and Everyday Health with Drugstore.com). [Correction: Because of a mistake in our draft copy of comScore's report, we originally characterized Drugstore.com as having been acquired by Everyday Health. Drugstore.com is simply part of Everyday Health's ad network, and thus counts towards its total audience size, but is a separate entity].

If you strip out all of those, which denoted by asterisks, you get the sites that grew organically, including Infospace, Wordpress, Weatherbug, Answers.com Sites, Facebook, Hearst Digital Media, and Mozilla.

During 2008, comScore estimates that 4.5 trillion display ads were served in the U.S. alone. That comes out to more than 2,000 Internet ads per month per person. And, believe it or not, the number of ads served up actually declined a little during the year as publishers tried to push up CPMs (the amount they can charge per thousand ad impressions) by reducing inventory.

Above are the top ten publishers of display advertising as of November, 2008, along with how many billions of ad impressions each one served up in that month. Only two of the fastest-growing sites also made the list of top ten publishers of display advertising: Facebook (No. 4) and Glam Media (No. 9).

Now if we could only get the average CPM per site, then we could create a more interesting ranking of the sites that make the most money from their ads.

Here are the full lists of fastest growing sites by rank and annual growth rate (same as the charts above) and top ten display ad publishers:

Fastest-Growing Sites
1. Break Media* (+279%)
2. Glam Media* (+144%)
3. Infospace Network (+134%)
4. NetShelter Technology* (+131%)
5. Everyday Health* (+121%)
6. CBS Corporation* (+111%)
7. WildTangent Network* (+74%)
8. Discovery Digital Media (+68%)
9. WordPress (+64%)
10. Demand Media* (+59%)
11. Weatherbug Property (+59%)
12. Answers.com Sites (+58%)
13. Facebook (+57%)
14. Yellow Book Network* (+51%)
15. Ask Network* (+48%)
16. AT&T Interactive Network* (+47%)
17. JPMorgan Chase Property* (+45%)
18. Hearst Digital Media (+42%)
19. The Mozilla Organization (+40%)
20. Sprint Nextel (+36%)

Top-Ten Display Ad Publishers
1. Yahoo Sites (37.1 billion)
2. Fox Interactive Media (34.9 billion)
3. AOL (18.2 billion)
4. Facebook (13.7 billion)
5. Microsoft Sites (13.4 billion)
6. Google Sites (4.1 billion)
7. eBay (2.7 billion)
8. Viacom Digital (2.2 billion)
9. Glam Media (2.1 billion)
10. United Online (1.8 billion)

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But the company is making changes anyway, they say, mostly to control expenses. The executive team will take a “25-60% reduction in pay” with an offsetting bonus based on performance should the economy not go as far south as people expect. CEO Samir Arora will be on the high end of the cut percentage. For staff salaries are being cut 3% – 15%, with the same offsetting commission plan.

I have a couple of observations. First, companies are beginning to realize that emails to staff are the best way to spread news. They tend to leak (as this one did), so there is rarely meaty stuff there. But it’s also rare for a company to slash salaries because employees are so adverse to it. It’ll be interesting to see if Glam can keep its top people. In this economy, though, I doubt many will be leaving their jobs.

The full email is below:

Dear Employees,

Despite the very turbulent environment we are fortunate that 2008 has been a good year for Glam Media and our publisher network. This was the year of forging ahead by focusing on our core business while still being conservative and cautious. It was a time for leadership and resolve, and Glam has emerged as a much stronger company because of it.

Market Update

1. The founding vision of Glam Media was to help brand advertisers embrace the Web. As time spent on TV and print significantly declined in 2008, the Internet and Glam benefited.

2. Glam helped build the premium display ad market for women’s ad categories—most of the brands in our categories had very low spending on Internet, unlike now-hard hit categories in categories like Auto and Finance, where the Internet spend was already high and cutbacks are high.

3. Pioneering the Vertical Content Network with a dedicated and strong Publisher Network is built on the way the Web works—distributed media and fragmentation with users increasingly going to individual sites. De-portalization and the internal challenges Yahoo and iVillage continue to face are creating growth opportunities for Glam to provide a better solution to their brand advertisers.

4. Of the three types of advertisers—High Brand with Low Direct; Brand and Direct; and Direct—Glam focuses on Premium and Luxury brands that typically spend over 70% on brand ads in traditional media and much lower on direct response. In a down turn, these advertisers don’t go to direct or “cheaper” media, they just spent carefully (Vogue’s advertisers don’t go to US Weekly or Direct Mail—and they are coming online to Glam)

5. Glam chose to have very limited Ad Networks fill in its inventory using GlamX Exchange, a sector hit very hard in the downturn. This conservative strategy has helped build a stronger direct sales business—we could have had more revenue, but then we would have been looking at lower or even negative growth.

Business Update

1. While the reports of downturn/recession for the last 3 quarters feel right to us, the reports of widespread panic and meltdown online seem thus far fear-driven or isolated to specific ad categories like Auto and Finance. We were expecting very bad news in Q4 and were ready to take decisive action, but have been positively surprised at the strength of the web, women and men’s lifestyle ad categories and the continued shift of spending to the web. We expect the business to be overall much tighter, with advertisers more careful and seeking in the short term more return/data-driven, but the fundamentals of the web, online advertising, and display ads are all strong.

Despite the slower economy, Q4 was the strongest quarter we have had—we will end the year in a triple digit ad revenue growth rate year over year, and also very strong sequentially. We believe Glam is one of the few digital companies with this level of growth in revenue today. The reason is the focus on making our customers-—the agencies and brands successful online, being the number one for women, the scale of reach, premium inventory, targeting technology, custom solutions and our strong publisher network.

2. Glam’s strategy of staying focused in the first three years on Women & Style was essential to get to scale and our tipping point, but our strategy in diversification in 2008 was essential driver of our growth. Glam expanded by creating New Vertical Networks for Women in Style, Living, Health & Wellness, Entertainment, Luxury and Family, and also launched Brash.com Men’s network in Lifestyle, Entertainment, Tech & Auto. Glam’s ad sales team has brought in business from over 500 new advertisers and additional business from 300 existing clients in 2008.

3. Glam expanded internationally, acquiring Monetize to launch Glam UK, Codex Media and a JV with Burda in Glam Germany, and launched Glam Japan.

4. Glam continued to focus on making our clients-Brand Advertisers succeed online through the data-driven Glam Evolution Ad Targeting and deep custom advertorials which helped increase the number of advertisers from to over 900 top brands in 2008. Glam and Brash now have one of the largest lists of Premium brands on the web.

5. Glam raised a Series D in early 2008, and did not go out and spend it on large acquisitions or operating overhead. We’ve tried to run a very lean company prior to the downturn, and we continue to believe that being frugal in spending is the best way to run a business we all own.

6. With 54 Million unique visitors to Glam and our network, Glam will end the year as Number 10 on the MediaMetrix Top 100 web properties, on the AdWeek Top 10 Digital Hot List and Number 7 in Online Media after Google, Yahoo, MSN, AOL, Fox/MySpace and Ask.com. Glam is Number 1 in reach in the women category, with over two times the reach of iVillage in the US, and just became number 1 in UK, Australia, and Germany. Globally, Glam now has a reach of 98 Million uniques per month and Brash.com Vertical is already over 15 Million uniques in 2 months of launch. In a downturn, advertisers reduce experimental budgets to smaller sites, and favor fewer, larger companies with proven history in providing reach and value.

7. The focus has been to create New Ad Products and Solutions that provide better returns to advertisers in a down economy. In display ads, Glam is providing contextual, audience, above-the-fold placement, primetime, and now full behavioral targeting with detailed reports. Glam now has full suite of ad solutions that can be built using the Glam Apps Platform—custom advertorials, full page takeovers, influential outreach, video, and applications and widgets for brand engagement.

2009 Plan

With the core fundamentals of the business in place, we are now in the process of finalizing our operating plan for 2009. The lack of visibility is making planning very challenging this year. Given the uncertainties we are taking a different strategy for managing through the downturn and to avoid broad-based layoffs that we think would undermine our potential for success.

With this in mind, we are proposing the following changes:

1. Starting at the Top: The executive team will take a effective 25-60% reduction in pay and an increased commission based on performance. Our CEO and the top sales execs will take a 40-50% reduction. The team will have accelerators to significantly beat the plan—helping instill similar incentives, spirit and dedication in early stage startup founders. We recognize this will be very hard for some, but is consistent with Glam’s core values, and creates a strong incentive for the leaders to deliver results.

2. US Employee Incentive Plan: a small part of the compensation will be converted to a variable commission based model—starting at 3% for employees, to 10% for the more senior staff and up to 15% for the functional management team.

This variable compensation model allows us to reduce operating expenses in the case of a worse than anticipated downturn, saving critical jobs and at the same time if the results better than expected, rewards the current employees more.

3. Functional Plan and Changes: The Glam functional team will continue to build the final business plan, and there may be operating changes in functions, roles and employment—but only as a part of our annual planning process. We will continue to do performance and growth level changes every six months to ensure we have the right people in the right job at the right time.

4. Hiring: Glam is carefully adding some strategic resources—we are looking for several top level product managers in Silicon Valley, international team members in our new subsidiaries, and will continue to conservatively hire in ad sales in line with our growth.

5. Tight expense management, using technology innovation and leadership: Glam will focus on managing our growth rate in a slow economy with very tight controls in expenses, building more technology, thinking outside the box, showing care, and leading in the market.

We trust you will all appreciate this innovative approach to protecting the company and our valuable team in these challenging times. We will continue to monitor the business closely on a month-by-month basis and make further changes as required. We believe we have the very best team at Glam, and these changes will help us bring the Glam Family closer together and will make us stronger. Our values make our destiny. We care. We take our responsibility to our shareholders, investors, employees, publishers, developers, media partners, agencies and brands very seriously, yet recognize the social and local responsibility to manage and lead effectively.

Thank for all for your hard work in 2008- and here’s to a cautious, yet strong 2009!

Glam Executive Team and Founders

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Glam Media has launched its application platform, called Glam Apps Atako, to the public. The platform was originally unveiled in July, and has remained in private beta until now.

Each application allows bloggers and site owners to quickly implement new functionality into their sites, with available options for syndicating content, adding rich media, and enhancing posts with comments and polls. At launch available apps include Sphere, BuzzFeed, Meebo, PollDaddy, PicApp, JS-Kit, and Kwanzoo, along with a video delivery widget developed in-house called GlamTV. Glam has also built the platform with monetization in mind, offering an integrated monetization system with built-in support for rev-shares. Built with Google Gadgets, the Glam Platform also supports OpenSocial and OpenID. The platform itself will also be open sourced, says Glam CEO Samir Arora.

These new applications seem to be blog enhancers on the same order as WordPress plugins, without the social functionality seen on application platforms from the likes of Facebook, MySpace, or LinkedIn. That said, the platform could still be a steady source of revenue for the Glam, as the company will take a portion of the proceeds earned by each app.

There are similarities between the platform and the recently launched SproutMixer, which also lets brands and others build Flash apps/ads for publishers.

Glam Media is a diverse company, offering a network of sites primarily geared towards women (though it recently launched its Brash network for men), as well as an ad network that serves advertising to other blogs and affiliates on its network.

As much as we’ve taken shots at Glam over the last year, I have to say this. They’re aggressive and pushing the envelope with monetization. If you’re a Glam publisher, let us know how that’s working out for you.

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Glam is both a direct publisher of content and an advertising network. A big part of their business model is float management – making sure that they collect money before they pay it out to partners. If they pay too soon, they could get hit with bad debt when advertisers don’t pay. Pay later, and they keep the interest they earn on partner money.

That’s why they’re extending the payment period to already beleaguered publishing partners. In a notice today, Glam blames the economy and extends payment terms from 60 or 90 to 120 days:

Dear Publisher,

Please be advised that to better prepare for the current financial situation, Glam anticipates a significant slow down in collection payments from advertisers. Therefore we will need to align the expected timing of payments from advertisers with the payments we make to our publishers. Accordingly, as of November 1, 2008 the revenue payments will now be scheduled on 120 day payment terms. However, in order to help minimize the impact to you and avoid gaps in payments, you will be paid as follows:

For publishers with 60 day payment terms:

Dear Publisher,

Please be advised that to better prepare for the current financial situation, Glam anticipates a significant slow down in collection payments from advertisers. Therefore we will need to align the expected timing of payments from advertisers with the payments we make to our publishers. Accordingly, as of November 1, 2008 the revenue payments will now be scheduled on 120 day payment terms. However, in order to help minimize the impact to you and avoid gaps in payments, you will be paid as follows:

November Revenue: 50% will be paid in January and 50% will be paid in February
December Revenue: 50% will be paid in March and 50% will be paid in April
January Revenue: 100% will be paid in May
Note: There are no changes in the amount you will earn or receive with this payment revision.

We appreciate your cooperation and we will do everything we can to make the transition to the new payment schedule as smooth as possible.

This agreement will go into effect November 1, 2008.

For publishers with 90 day payment terms:

Dear Publisher,

Please be advised that to better prepare for the current financial situation, Glam anticipates a significant slow down in collection payments from advertisers. Therefore we will need to align the expected timing of payments from advertisers with the payments we make to our publishers. Accordingly, as of November 1, 2008 the revenue payments will now be scheduled on 120 day payment terms. However, in order to help minimize the impact to you and avoid gaps in payments, you will be paid as follows:
November Revenue: 50% will be paid in February and 50% will be paid in March
December Revenue: 100 will be paid in April
January Revenue: 100% will be paid in May
Note: There are no changes in the amount you will earn or receive with this payment revision.

We appreciate your cooperation and we will do everything we can to make the transition to the new payment schedule as smooth as possible.

This agreement will go into effect November 1, 2008.

Long payment terms are just business as usual with ad networks – it often takes our partner Federated Media six months or more to get us payment for ads served on TechCrunch. This is more of a sign of Glam’s ongoing transition from making guaranteed payments to publishing partners to a more stable and traditonal revenue share model. But for partners, it’s the equivalent of skipping 2-4 months of revenue as they wait out the new payment period. For some it will mean laying off writers and cutting other costs as the effects trickle down.

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Screen shots of Brash are below. More than 25 content sites have joined the Brash.com Network at launch, including: ArtistDirect; DigitalTrends.com; eCoustics.com; InGameNowSeriousWheels.com; Squidoo and MonstersandCritics.com. Content will also be syndicated from Time.com for national news; Rolling Stone for music news and updates; TheCarConnection.com for car reviews and news, SB Nation for sports coverage and CNET for technology information.

Launch advertisers include Unilever’s Axe brand deodorant, H&M and HP. The new James Bond Movie “Quantum of Solace” is one of the top new advertisers on Brash as well. Glam says that the aggregated Comscore user numbers from the original content partners is over 10 million/month.

Glam is growing at a health clip as well. Recent Comscore stats say 52 million unique users visited Glam Media sites in September from the U.S., and more than 90 million worldwide.

Brash also includes a video channel (Brash TV) with content pulled from multiple partners, as well as what is sure to be a much discussed Brash 100 List and the Brash Hall of Fame 50 – “The Brash Lists include men across the fields of sports, politics, business and entertainment that are game changers.”

Screen shots (and we’ve put more on the Brash Crunchbase page):

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Image licensing platform GumGum has scored a deal to serve free legal images across Glam Media’s publishing network. Glam publishers will have access to photos from Splash News’ catalog of celebrity images, many of which run from $75-500 apiece under standard licensing deals. In lieu of these fees, GumGum will allow publishers to display their images with ad overlays free of charge (publishers will receive around 20% of the revenue from these ads – the rest will go to GumGum, Glam, and Splash).

The deal comes two months after GumGum annouced a major shift in the technology used to power its platform. In the past, the site would issue photographs as Flash objects, which made them easy to track and monetize with ads. But Flash-based images are slow and clunky compared to a normal image file, which made the system unappealing to publishers.

In July GumGum dropped the Flash technology in favor of a system that uses standard image formats. Now, publishers are free to crop and modify their images (which they couldn’t do with the Flash version). GumGum uses a combination of photo metadata and image recognition to identify the licensed photos, and overlays ads accordingly. If a publisher doesn’t want ads to appear on their images, they can pay a modest fee tied to the number of times an image is viewed, rather than the one-time bulk fee typically associated with image licensing.

While GumGum acknowledges that it’s probably possible to fool the image recognition system, it has shifted its business to appeal to legitimate publishers – anyone who wants to pirate an image probably wouldn’t sign up for the service in the first place.

Glam Media is an advertising/publishing network that focuses almost exclusively on content for women. With over 600 member blogs and sites across Glam’s network, GumGum stands to see its userbase grow dramatically – the company speculates that the number of images it serves could potentially double with the deal.

GumGum competitor PicApp forged a similar deal with blog network b5media earlier this year. And Glam’s biggest rival Sugar Inc allows its bloggers to use images from Getty images.

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But apparently, reaching 77 million people a month is not enough. Glam is now trying to strong-arm its affiliates into placing the Glam logo on every page of their site, because that is how comScore counts traffic and visitor stats for the Glam Network. In its August newsletter to affiliates, Glam is claiming that affiliates agreed to place the Glam logo on their sites as part of contract they clicked on when they signed up. This is news to at least one affiliate, who forwarded the newsletter to us. It presents this claim almost innocuously as a “Question of the Month.” Here’s an excerpt (I’ve bolded parts for emphasis):

QUESTION OF THE MONTH

Q. Why do I need to place the Glam logo on my site/blog?

The Glam Publisher Network logo is very important for several reasons. One reason is ComScore, a company that provides a tool for ad agencies to make media buying decisions. It is an industry standard tool used by most of the advertising agencies in the United States.

If the Glam Publisher Network logo does not appear on your site or blog, it will be difficult to identify it as part of the Glam Network. That makes it difficult for Glam Media to include you in ad campaigns and categorize your site in ComScore. Additionally, having the Glam Network logo on your site is part of your contract.

In order to make it easier for you to implement, here are some of the rules about logo placement:

* The Glam Network logo has to be placed site-wide, meaning every page of your website.
* It can be placed at the top or the bottom of each webpage. However, the preferred location is at the top
* It can be placed in the sidebar on the top of each webpage.
* It cannot be placed in the side bar on the bottom or the middle of each webpage.
* You need to place the logo that corresponds to your category. For example, If yours is a fashion site, then use the logo that corresponds to the Fashion Channel, and so on. All logos are located in the Glam Insider under the Get Your Code, Glam Module Tab.
* Most important, please remember that all logos have to be up by Aug. 1, 2008.

If you have any questions about your logo or your account in general, please contact your account manager.

Yet, if you look at the language of Glam’s “Affiliate Linkage and Advertising Agreement” (which can be found here and embedded in its entirety below), the only stipulations that are seemingly related are the following (again I’ve bolded for emphasis):

b. Affiliate agrees to:

i. Display Advertising on pages of the Affiliate Websites according to the terms of this Agreement;

ii. Post Glam’s contact information in the advertising section of the Affiliate Website.

iii. Make third-party advertising provided to Affiliate by Glam the most prominent advertising on the Affiliate Websites and appear on the Affiliate Websites’ first visible page (i.e., above the “fold”);

iv. Implement all tags, formatting and code necessary in order for Glam to exercise its rights under this Agreement;

v. Place Glam Network Branding and contact information on the Property, in a form and manner as reasonably determined by Affiliate and Glam;

vi. Provide Glam with a default ad tag or image for unsold inventory to place in Glam’s ad serving system;

vii. Obtain Glam’s final approval of the placements and targeting of the Advertising and all references to Glam in the Affiliate Websites; and

That bit about placing Glam Network Branding on the site might cover the logo, but it clearly states that any such placement will be mutually determined by both the affiliate and Glam (presumably at a future date, so it can’t be part of the existing contract)

Oh, and there is also this nice clause in the agreement, which is unrelated, but still surprising. If you sign up to allow Glam to serve ads on your site, you are also giving them the first right of refusal in case you ever decide to sell your site. Per the agreement:

10. Right of First Refusal

a. Notice. If at any time Affiliate proposes to sell, license, lease or otherwise transfer all or any portion of its interest in any of the Affiliate Websites, then Affiliate shall promptly give Glam written notice of Affiliate’s intention to sell (the “Notice”). The Notice shall include (i) a description of the website’s content, (ii) the name(s) and address(es) of the prospective purchaser(s), (iii) the proposed consideration and (iv) the material terms and conditions upon which the proposed sale is to be made. The Notice shall certify that Affiliate has received a firm offer from the prospective purchaser(s) and in good faith believes a binding agreement for the sale is obtainable on the terms set forth in the Notice. The Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed sale.

b. Right of First Refusal. Glam shall have an option for a period of 15 days from receipt of the Notice to elect to purchase Affiliate’s interest in such website(s) at the same price and subject to the same material terms and conditions as described in the Notice. Glam may exercise such purchase option by notifying Affiliate in writing before expiration of the 15-day period. In this event, Affiliate agrees to enter into an agreement on terms substantially similar to the terms set forth in the Notice.

Best Friends Forever, indeed.

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It’s a safe bet to assume that the merger discussions were leaked directly by CEO Samir Arora or his advisors at the AllThingsD conference he was attending when the story broke.

We now believe that there was indeed some sort of discussion taking place that may have valued Glam at over $1 billion. Sort of. And those discussions, say multiple sources, were with AOL founder Steve Case’s Revolution Health, a health portal that launched in January 2007. Revolution Health’s board of directors includes Jim Barksdale (former CEO Netscape), Carly Fiorina (former CEO HP) and Colin Powell (former Secretary of State and Chairman of the Joint Chiefs of Staff).

The merger sounds absurd on its face – the marriage of a womens blogging network with a health portal. But both companies are essentially in the business of selling ads, and there is significant overlap in their demographics if not in their actual users. Revolution Health is in trouble, and has reportedly gone through a number of layoffs and hired Morgan Stanley to represent them in a sale. Certainly their traffic has taken a nosedive, from a high of nearly 4 million monthly visitors to just 1.6 million last month (Google Trends doesn’t show this same decline, although Compete.com does).

The deal may not have made sense for Glam, but it was a heck of a story to leak to the press.

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There was speculation that NBC’s recent investment in Blogher, arguably a competitor to Sugar, was to blame. But Sugar CEO Brian Sugar (guess where the company name came from) says this was purely an economic decision. NBC’s cut of ad sales simply got too expensive.

Comscore says the Sugar sites have 4.6 million unique visitors and 24 million page views per month. We’ve heard the company will do around $15 million in revenue this year, with 2/3 of that from advertising. Assuming NBC takes 50% of sales, that’s $5 million Sugar is paying them every year. Bringing sales in-house certainly makes sense.

Sugar is also clearly gearing up to compete with Glam Media, a company that represents other women-focused sites for ad sales. To get there, though, Sugar needs to build up their own sales force. It looks like they’re doing exactly that.

Disclosure: We partnered with Sugar for our LA party earlier this year.

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Women’s ad network Glam Media thinks it’s worth more than $1.3 billion, reports Matt Marshall at VentureBeat. That’s how much an unnamed suitor is supposedly offering for Glam. But Marshall thinks that Glam will turn it down.

The company has raised $115 million, most recently in an $85 million round. Glam runs ads on female-oriented Websites that it says reaches 64 million people a month. Today it just launched a video ad service called the Glam TV Platform that bundles rights-cleared video (from partners like E! Online, CelebTV, Sony BMG, Brightcove, YouTube, and others) with video ads that publishers can put on their sites.

Last March, Glam started tightening up its finances by ending its policy of giving guaranteed revenues to blogs and other publishers in its network. As we reported back then:

Last year the company lost $3.7 million on $21 million in revenue. They’ve promised investors that 2008 would bring in $150 million in revenue with $40 million in profit. The only way to get there is bring in a lot more publishers, sell a lot more ads, and keep a larger share for themselves.

If Glam is on target, a $1.3 Billion acquisition would be 8.7 times revenues and 32.5 times estimated profits. Is it really that beautiful? If there are any advertisers out there who can tell us their experience with ads on Glam, and the ROI theta re seeing there versus other ad networks, please share in comments.

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