Shakeout Threatens to Thin Out Web-Ad Brokers

As the Economy Sours and Venture Funding Grows Scarcer, Some Networks Have Begun to Exit a Crowded Niche on the Internet

More than 300 online-ad networks have cropped up over the past couple of years, making the business of brokering ads on the Web one of the most popular -- and crowded -- niches on the Internet.

JellyCloud, a Redwood City, Calif.-based targeted ad network, closed its doors this month after raising $11.5 million in venture-capital funding earlier this year. Adzilla, a similar network in San Francisco, also ceased operations.

Online-ad networks, which started to emerge about a decade ago, offer marketers a one-stop shop to buy ads across dozens, or even hundreds, of Web sites. Most networks either pay a Web site upfront for the site's advertising inventory and keep the revenue on the ads they sell, or split their ad revenues with the site.