Posted on October 02, 2006 by Tom Simpson

In a huge move that has some people thinking that paid advertising on the internet has gone too far, the controversial PayPerPost service that pays bloggers to write content without requiring disclosure, will officially announce on Tuesday that it has scored $3 million in venture capital. The Series A round was led by Inflexion Partners, with Village Ventures and Draper Fisher Jurvetson participating.

Dan Rua from Inflexion and Michael Barach from Villiage Ventures will take board seats. Josh Stein from Draper Fisher Jurvetson will become a board observer.

Over the past five months, many people have questioned the ethics and credibility of the service and the bloggers that get paid to write for them. They offer anywhere from $2.00 to $10.00 per post, and the writer is directed on the direction of the post, and what sort of light to shed on the topic they’re writing about.

Even with the controversy surrounding PayPerPost, it’s obvious that there are people who see beyond ethics and honesty, considering the service a new form of PR marketing. Obviously, the investors think the same. Whether this service survives, or not, any chance at profiting may have just been lost. They are now $3 million in debt and have a huge stake in “making” the service work. “Making” it work may mean that all credibility will be forsaken, in order to push their paid bloggers to go even further.

Some, including me, are interested in what Payperpost will do with the cash. Others are asking “How many credible bloggers would sign up for this?” I’m also wondering how this company is going to “fly”. Continued loss of credibility by the company and the bloggers who work for them will mean the the investors might not ever see a return. Trying to make a business model like this work by starting $3 million in debt will be disastrous.

What are your predictions or thoughts about this?