• by Mark Walsh  @markfwal, November 2, 2007

As one of the few remaining independent ad networks, Specific Media would seem to be more the prey than the hunter these days. But with a fresh infusion of $100 million in venture capital funding, the company plans to go on a buying spree of its own.

In announcing the big investment from private equity firm Francisco Partners, Specific Media said the financing was earmarked for acquisitions that build on the company's platform for placing and targeting online ads.

The sector has already been gripped by an M&A frenzy this year. The major Internet players including Google, Yahoo, Microsoft and AOL have been scooping up Web ad networks and exchanges aggressively to help bolster their ad revenues. Microsoft CEO Steve Ballmer recently predicted the software giant would get 25% of its revenue from digital advertising.

One might expect Specific Media to be a target rather than an acquirer in the current environment. Not so.

"This investment sends a clear message that we plan to be around a long time as an independent ad network," says the company's CEO Tim Vanderhook. Ads placed by Specific Media already reach 130 million U.S. Web users, amounting to 72% of the online audience, according to September data compiled by comScore Media Metrix.

The company plans to expand beyond display ads by acquiring technology companies that specialize in other ad categories including search, online video and text.

"We're looking at other ad formats that we can bolt on to our platform and that can leverage the large amount of behavioral data we already have," says Vanderhook.

SpecificMedia targets users demographically, contextually and behaviorally across its ad network. In addition to broadening the types of ads it serves, Vanderhook says the company also wants to expand internationally and is already pursuing talks on both fronts. Overall, he expects to make from two to six acquisitions in the next year.

If necessary, the company will consider an initial public offering if it needs additional funding to finance its planned acquisition tear. Most Internet companies during the last Web craze have chosen an M&A exit over a more risky IPO.

Vanderhook views Specific Media's independence as a competitive advantage. With the wave of ad network acquisitions by online media companies raising concerns about conflicts of interest in ad placement, he believes Specific Media can stand apart as a neutral player.

"I get calls all the time about interest in the company," he says. "If we wanted to sell the business, we would've done that prior to this round of funding."

For now, Specific Media is locked in a battle with rival independent network ValueClick. The publicly traded company was just slightly ahead of Specific Media in unique visitors with more than $133.5 million, and reaching 73% of the online population. Rumors have swirled recently that AOL may be considering buying ValueClick to further enhance its online ad business.

Ultimately, Specific Media's ambition is to supplant AOL-owned Advertising.com as the Web's top ad network. "We won't be satisfied until we're No. 1," says Vanderhook.