RSS Attracts Really Serious Money

Really Simple Syndication is starting to attract some real money.

This is especially true after Technorati -- one of the leading blog and Really Simple Syndication, or RSS, tracking services -- acknowledged Monday it recently closed a multimillion-dollar round of venture capital funding. While Technorati's haul is in and of itself impressive, it's the expected ripple effect on other RSS technology developers that has some in the industry excited.

"I think this is clearly, in my opinion, the first of the many fundings you will see in the blog and RSS space," said Om Malik, who broke the news about Technorati's funding, which reportedly totaled $6.5 million, on his blog Monday. "Clearly, people are beginning to realize the impact of RSS. It's changing the distribution of information."

Over the last year or so, RSS has become one of the buzz terms most heard in blogging circles. It allows anyone to automatically receive free feeds from countless numbers of blogs and a growing number of news services.

Technorati has become a leader in the arena, offering a frequently updated list of the most-linked blogs, as well as a real-time blog search function. According to Malik, the company's funding round was led by the prominent venture capital firm Draper Fisher Jurvetson.

Technorati spokeswoman Liz Westover confirmed that the company had received funding in a statement to Wired News on Tuesday, but declined to specify an exact figure. The company's board, she added, now includes Andreas Stavropoulos of Draper Fisher Jurvetson and Ryan McIntyre of Mobius Venture Capital.

The question on many people's minds now is, what is Technorati doing with its loot?

"We're putting our investments to work building infrastructure and providing service to a population that's growing at an explosive rate," wrote Technorati founder David Sifry on his blog Monday. "Frankly, we'd rather talk about that than about the money others have invested in us."

That the company is putting the money into upgrading its infrastructure is good, say some who have seen Technorati struggle under the weight of the huge amounts of traffic that has come its way in recent months.

"They've grown so fast," said Malik, "their service breaks down quite often."

In any case, to many, Technorati's good fortune is viewed as a harbinger of good things to come for its peers.

"It's obviously exciting and is an indicator that RSS as a technology platform is coming of age," said Brad Feld, a venture capitalist at Mobius Venture Capital who recently invested in news aggregator NewsGator. "I'd expect that you will continue to see a steady stream of new investments in RSS-related companies, although as the segment leaders get funded, the gap between them and the No. 2 player in a segment grows dramatically as time passes."

One RSS technology company now licking its chops is Feedster, a news- and blog-syndication service.

"We obviously see this as good for us," said Feedster CEO Scott Rafer. "These things tend to get funded in a pack. And we're angel funded thus far and are planning on going out for an institutional round after Labor Day. So the timing is fine for us."

Rafer would not say how much Feedster would be seeking in venture capital, though he did say he expected it to be a smaller amount than Technorati is reported to have received.

Meanwhile, as companies like Technorati, Feedster, NewsGator and others continue to grow and get funded, RSS seems ready to hit the mainstream in a serious way. Malik said the technology has spread unusually quickly.

"If you look at most of these niche technologies, they become mainstream in two to three years," Malik said. "RSS has had a much faster adoption than most."

Feld said that's thanks to blogs, and that now, RSS is ready to enter the world of big businesses.

"RSS is at the edge of a huge acceleration in adoption," he said. "The early users have been bloggers, which have clearly exploded geometrically.... The next adopters are online content publishers. Corporations are starting to use the technology. This is where it will go mainstream. The novelty factor has clearly worn off. We're now shifting into a mode where folks are looking for and extracting value from the platform."