Chitika co-founder, CEO and president Venkat Kolluri.

MARLBOROUGH, Mass. — If Chitika Inc. could only use a one-sentence pitch for deep-pocketed advertisers looking to connect with the blogosphere, it could possibly sound like this: Chitika specializes in placing interactive ads on over 15,000 bloggers' Web sites — is that something that may interest you?

In fact, according to Chitika's co-founder, chief executive officer and president, Venkat Kolluri, the number of bloggers using the company is about to surpass 16,000. In 2003, when the company was founded by Kolluri and Alden DoRosario, the company's chief technology officer, there were about 100 small- to medium-sized bloggers using Chitika. The company is serving 1 billion ads per month to its participating blogs and Web sites. According to Kolluri, Chitika is a specialized ad network that focuses on the blogosphere. Chitika employs 24 people.

Now Chitika is looking to expand by acquiring blog networks. Kolluri said the Marlborough, Mass.-based company is looking to buy blog networks because it would give Chitika the ability to continue to explore new opportunities for its advertisers. Kolluri added that Chitika is looking to buy existing, up-and-coming blog networks. He said the company is in talks with a couple of blog networks right now. Kolluri said Chitika has not purchased any blog networks yet, but it is interested in moving aggressively and the company is looking to finish an acquisition by the end of the year. 

Kolluri believes that owning a blog network gives Chitika the opportunity to explore for its advertisers — the Chitika blog network would identify which ads work best for every blog. According to him, another benefit to owning a blog network is that Chitika can use what it found effective and proven in its own blogs for blogs on outside networks.

What Chitika does for blogs is create interactive advertisements on them that are different than banner ads plastered on a site. For example, Kolluri pointed to one blog, GPSreview.net, which uses Chitika services, to explain what his company does.

Underneath blog entries about Global Positioning System equipment is an ad that does not appear to look like an ad at first.

The ad is a box right below the blog's headline, and it allows users to find the product, find a description of the product, find a good deal on the product, and use a search engine to find other products — all while never leaving the blogger's page. Kolluri said that he believes it is a smarter ad, because it does not appear to look like an ad, it is informative, and it is helpful.

"That is an ad. It looks like a widget that was created by a blogger, but in fact, it's an ad," Kolluri said. "We did not want to take this age-old banner approach of just crashing the name of the advertiser or the merchant right onto the page."

According to Chitika, the company's revenue model lets bloggers sign up for free to use Chitika to feature products the blogger is interested in. Advertisers and merchants pay Chitika to advertise their names and products. Every time a person clicks on the link to a merchant, the merchant or advertiser pays Chitika. In turn, Chitika passes on a share of the revenue to the blogger featuring the product. According to Kolluri, Chitika already has established relationships with name-brand advertisers who are already part of the company's network.

The blogosphere, which Kolluri said was once considered a "marshland" by advertisers, is now "fertile ground." According to a study by Chitika and the University of Texas at Dallas in early August 2007, 50,000 blogs collectively earned $500 million in ad revenue in 2006.

"Now we're able to stand up say, 'What can our sales force team of 15,000 bloggers do for your brand?'" Kolluri said.  

Kolluri believes that the blogosphere is now fertile because bloggers write about something they are passionate about with readers who share that same interest in a particular subject.

One blogger who uses Chitika's services is GPSreview.net's Tim Flight, who is the Web site's owner and editor. Flight said Chitika lets him specify ads for certain products he wants on his site. He said that Chitika narrows down the search for the ads that he wants to see on his page.

In addition, Flight said he does not receive a lot of negative feedback because the ads are useful to consumers. In fact, Flight said some people wrote to him to tell him the ads were useful, and it helped some people find better deals. Flight said he will continue to use Chitika.

Kolluri said Chitika gives bloggers the choice of what they want and what they do not want on their sites. He also added that by using Chitika, bloggers can still use other banners, like Google Ads.

Kolluri is originally from Hyderabad, India, and he came to the United States in 1991. DoRosario, Chitika's CTO, is originally from Goa, India, and he came to this country in 1997.