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Rubicon Project raises more money, says ad optimization business is looking up

For many young companies in the advertising industry these days, the recent economic downturn is ugly.

But the Rubicon Project, a company that helps take ads from ad networks and place them on publishers’ web sites, says it grew revenue by 150 percent in the first quarter of this year over the fourth quarter of 2008.

It’s not disclosing how much money that is — but any growth is decent considering overall advertising slowed sharply by the end of last year. Projections for this year don’t show that story changing.

The company has used its momentum to raise another $5 million in funding from existing investors Clearstone Venture Partners, Mayfield Fund and IDG Ventures Asia, as well as $8 million in venture debt from Silicon Valley Bank.

Like competitors PubMatic, YieldBuild and a range of other so-called “advertising optimization” companies, the Los Angeles-based company is trying to help publishers fill available advertising space with the highest-paying ads from networks, while helping the networks to run their ads with as many publishers as they can. Publishers it works with range from media properties like The Washington Post, Gannett, USA Today, Salon to web companies such as Slide and Buzznet. Rubicon chief executive Frank Addante recently told the Los Angeles Times that his company’s software can help “premium news outlets” like newspapers increase revenue by up to 60 percent a year.

Rubicon raised a first round of $6 million in a mixture of equity and debt that it announced in late 2007. It followed up with a $15 million second round in early 2008, so the company has received a total of $33 million. This latest funding is a part of the second round, Addente tells VentureWire. The company says that it will use the money for “strategic acquisitions, research and development, infrastructure and international expansion.”