VigLink raises $800k from allstar investors

Company helps publishers monetize hyperlinks without thinking. Is this the next AdSense?

When Google Ventures, First Round, Reid Hoffman and a hefty collection of angel investors all participate in a seed round of less than $1 million, you know something’s up. San Francisco-based VigLink has raised $800,000 from that august group of investors as well as several hard-core technical angels including longtime Google executive and current LinkedIn VP of Product Deep Nishar, Niel Robertson, Hadi Partovi, Ali Partovi, Carlos Cashman, and Micah Adler.

And with a business model that promises to forge the next AdSense-scale monetization scheme, it’s no wonder so many want a piece of the pie.

VigLink monetizes ordinary hyperlinks by giving bloggers a code snippet they only have to install once that from then on automatically generates revenue from any sites they link to that offer link commissions. Over 7,500 companies like eBay and Amazon currently pay a total of $1.5 billion in commissions for links through affiliate programs, according to VigLink, but less than half of all qualifying links are properly enrolled. The  problem is that signing up and ensuring that credit is given for each link is a big hoop for a small gain--a hoop most publishers simply don’t have the attention span to jump through.

VigLink intends to solve the problem by enabling a publisher to embed a few lines of JavaScript on their page template. Whenever a user clicks away from the site, VigLink subltly alters the destination URL to credit the publisher for any resulting sales. VigLink then tracks the clicks and adds up the resulting commissions for payment to the publisher. As soon as a publisher racks up $25 from all the different affiliates, they get paid.

Meanwhile, merchants who pay for links can track participating publishers and reject publishers they think think inappropriate. Viglink takes a cut of every transaction.

Of course, the temptation for bloggers to game the system, or at least alter their writing to become a little more link-whorey, could take conflict of interest to a whole new micro level. AdSense and pay-to-post schemes have already drawn the regulatory ire of the FCC, which recently began enforcing conflict-of-interest rules for bloggers: writers with a sufficiently large audience must now disclose any gifts or paments received from companies they write about. Will each affiliate link need similar disclosure? And how deeply hidden can such disclosure be on a writer's website?

The implications are also huge for social media. Once Twitter and Facebook integrate VigLink or something similar, you might have to second guess even your best friend’s movie recommendations…