SocialMedia raises $3.5M to sell ads across social networks

SocialMedia, a company that lets small Facebook applications get exposure by bidding on ad links within Facebook popular applications, has just raised $3.5 million in financing.

Using the marketplace offered by SocialMedia, a Mill Valley, Calif., company, less popular Facebook applications bid to get ads placed on the pages of more popular Facebook application — thus, increasing their traffic. Advertising one application within another is an increasingly important way of getting Facebook users to try out nascent applications, as more and more applications launch every day.

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SocialMedia (see our original coverage) raised the money from Charles River Ventures and angel investors and is poised to enter other social networks. Myspace, for example, announced last night that it would be launching its own platform for developers within the next couple of months. Hi5, Bebo, and other social networks with millions of users, are also planning to launch their own developer platforms.

SocialMedia already owns Trakzor, a popular Myspace application that lets users see who else has viewed their profile pages. Four million Myspace users have installed the Trakzor widget and one million use it per month, giving the company a natural starting point to advertise new Myspace applications — especially as developers without a presence on Myspace look to move in.

SocialMedia’s marketplace on Facebook lets an application owner with many active users — valuable ad space — sell space on its pages to other applications. See screenshot for example: The gray box featuring “Mobile Radar” is the ad.

The company also offers an analytics application on Facebook called Appsaholic, that provides data for app developers on how their ads are performing.

Interestingly, Marc Andreessen is one of the angel investors participating in the round. He also is the co-founder of Ning, the do-it-yourself social network.

Other investors include Jeff Clavier.