Interfusion.Net Qs for VC funds

Melbourne-based Web solutions provider Interfusion.Net has managed to tap a venture capital stream, where many are isolated by drought, after last week announcing a $4 million cash injection from Compaq.

The funds are directed at developing Interfusion.Net's Active Information application, an initiative reputed to offer new revenue streams and value-add opportunities to ISPs. The revenue has been drawn from the venture capital fund which Compaq established last year to invest in technology companies.

Bree Presswell, marketing manager for Interfusion.Net, told ARN the business model for Active Information's rollout involves partnering with ISPs and helping them make money.

"Other than any connection or download fees they can collect, there are basically no other revenue streams open to ISPs," Presswell said. "As soon as a user logs on with an ISP, they are a lost entity. There is not a lot of ways in which they can add value to the relationship.

"ISPs don't have enough contact with their customers and this is a very easy way for them to make money and add value," Presswell said.

According to Presswell, Active Information involves "completely personalised services" based on a "psychographic" profile developed by the software. The revenue stream comes from advertising revenues that Presswell said will be more attractive than traditional banner advertising as it offers true one-to-one opportunities based on user profiles.

"This offers highly targeted advertising possibilities. Perhaps the first true one-to-one marketing on the Internet," Presswell said.

She said the product is basically a permanent window for Web surfers which delivers personalised advertising and content at the same time as gathering data on the user's Internet surfing habits.

"We will be aggregating data on users, but will not be selling that information to anyone," Presswell said. "We will be developing a psychographic on user surfing, then the content appearing on the Active Information window is matched specifically to that user profile."

The service will be available optionally to all customers of partnering ISPs, Presswell said.

Compaq sees the patented Active Information technology as a brand new layer in the Internet. This investment in Interfusion.Net forms part of its commitment to develop an Internet services community which is both "an infrastructure customer and a channel", according to Tony Bill, Compaq's director, commercial business group.

He said it took three months for the vendor to finalise this particular deal and that there are two more with other Australian entities in the offing. As well as providing the cash injection, Compaq will now take the Australian developed technology to the world.

"This company fits squarely into the Compaq vision of 'everything to the Internet'," Bill said, adding that the Interfusion.Net deal represented the first allocation by the Compaq fund to an Australian company.

Bill said making use of the Compaq fund requires the recipient to relinquish somewhere between 10-20 per cent of equity (the exact amount remains undisclosed).