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eCommerce - Monday, July 21, 2008

Paid Content Marketplace GumGum Raises $500K

Santa Monica's GumGum has secured $500M of a $1M Series A round, says PeWire. First Round Capital led the deal, with partner Howard Morgan taking a GumGum board seat.

Pay-per-use licensing is one of two financial models offered by GumGum, the other being ad-supported. Pay-per-use allows publishers to license content on a CPM basis. For example:

1. Content owner sets a CPM of $1 for a photograph of Britney Spears.
2. Publisher licenses the photograph.
3. GumGum tracks the license and reports 10k views.
4. Publisher pays content owner $10.

This model would seem to make sense for publishers like stock photo outfits. We don't get the advertising angle. Why would someone turn to GumGum for ad-supporting their content when they can and should turn to ad networks or media representation? GumGum will just go to ad networks for ad inventory and then charge the publisher for that.

The Obama sneaker photo is available via GumGum for a $0.45. Not sure if we just violated the license here by posting for free but I guess we will find out.

GumGum is led by CEO Ophir Tanz who is also currently CEO of Cavern - a wallpaper and furniture design house. Before that he was CEO of Mojungle - a mobile media sharing site and platform.

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