Beijing-based, state-owned China Mobile is the leading wireless service in China and boasts the greatest number of mobile subscribers, with 522 million customers as of Dec. 31.

In mid-January, China Mobile said it would begin the rollout of its 4G network at the Shanghai Expo in May. The company said it would run trials for users from May to October.

One of the concerns for venture investors is that China Mobile will be one of the first companies in the world to be bringing a 4G network to customers. Mobile phone companies make a good portion of their revenue from roaming fees and charges abroad. If no one else is using the 4G standard, then China Mobile loses that revenue to the carrier that can support those services, one investor said.

“They are rushing the deployment of 4G, because they want to be in a competitive position relative to China Telecom and China Netcom, which are deploying the global 3G standard,” said Richard Lim, a managing director with the Sino-U.S. firm GSR Ventures.

Indeed, China divvied up its wireless licenses between 3G and 4G to give smaller carriers like China Telecom and China Netcom a chance to compete. Those companies are attracting users with their 3G packages, investors said, although even 3G is still in the process of getting deployed around the nation.

And that’s the other concern some investors have. Timing for deployment of wireless networks is notoriously tricky, several of these investors said. There are also some concerns about how to develop a business model that can generate sufficient revenue without stepping on the toes of the vertically integrated telecom companies, investors said.

Still, not every investor is so reticent to back the 4G plan. “We typically look three to five years ahead of time, so by the time it gets hot, it’s probably not the time to invest anymore,” said Jui Tan, a Beijing-based partner with BlueRun Ventures.

BlueRun has backed Innofidei Inc., a wireless video distribution technology developer, whose technology has been tapped for a prototype baseband chipset for the 4G rollout that China Mobile is piloting at the Shanghai Expo.

Besides China Mobile, Swedish telecom company TeliaSonera AB is also planning to roll out a 4G network this year in Sweden and Norway. Swedish rival Tele2 AB and Norwegian peer Telenor ASA are also expected to roll out a 4G network in 2010.

“The next migration path is definitely 4G,” Jui said.

Based strictly on a pair of recent announcements, ServiceSource Corp. would appear to be positioning itself for an initial public offering in the not-so-distant future.

The San Francisco company, which helps companies increase the dollars they are generating from customers through support and maintenance contracts, disclosed that it generated $110 million in revenue in 2009, the first time it had surpassed the $100 million figure. ServiceSource also said that it added former Salesforce.com Inc. executive Steven Cakebread to its board of directors, making him the second outsider appointed to the board in the past six months. Former Mercury Interactive CEO Tony Zingale joined in September.

However, Mike Smerklo, ServiceSource’s CEO and chairman, indicated that the company is in no rush to go public.

“We are getting to a size where an IPO might be a possible alternative,” he said. “But we have to think about what’s the best thing for our customers, our employees and our investors. An IPO may be of interest, but we are not holding it out as the ultimate goal.”

The board appointments of Zingale and Cakebread, who served as CFO, president and chief strategy office at Salesforce.com, are aimed more at helping the company grow revenue to “$500 million in the next three to four years,” Smerklo said. With the board now largely comprised of venture capitalists and private equity professionals, there was a need, he said, for board members with deeper technology expertise.

The company, which was started in 2000 by several former Cisco Systems Inc. employees, raised $10 million in December 2004 from Benchmark Capital. In January 2007, General Atlantic invested $66 million. The investors, he said, are patient and there have been no conversations about an IPO. ServiceSource, Smerklo said, has been profitable since it was started.

ServiceSource is playing in a sizable market. Smerklo, who joined in 2003, said that on a global basis the opportunity for so-called service revenue may be as high as $150 billion. ServiceSource is now managing $4 billion of services revenue for an array of technology and health care IT companies, including Adobe, Alcatel, and GE Healthcare.

Smerklo said the company’s biggest challenge is getting corporations to understand the value they could be generating from serving their customers beyond selling them a piece of hardware or software. With users of technology looking to spend less and make products last longer, it has become more important for the makers of the technology to continue providing services. He said that such services can account for as much as 30% to 40% of a company’s revenue and a good portion of their profitability. ServiceSource is able to do this through an integrated technology platform, which allows companies to manage and track renewal opportunities, understand the pipeline for such opportunities and allow end users to renew and pay online.

ServiceSource also in 2009 became a global company as it added a service center in Singapore to add Asia. It already had five others centers serving North America, Latin America, Europe, Africa and the Middle East.

Smerklo said the company is expecting to grow its top line figures by 35% to 45% in 2010 and that acquisitions will not play a role in that growth.

“Our biggest focus in 2010 will be on how we can continue to expand the scope of operations and add customers,” he said.

Art by Mike Lucas

Scaling The Fund-Raising Mountain - Partners at Redpoint Ventures will tell you the venture firm derives its name from a climbing term that refers to leading difficult vertical climbs without falling. That’s also a suitable metaphor to explain how Redpoint was able to meet its goal of raising $400 million for a new venture fund during one of the rockiest fund-raising environments ever in the venture capital industry. The firm was able to bring back its limited partner base for the new early stage partnership by touting several recent acquisitions of its portfolio companies: LifeSize Communications, which was acquired by Logitech International for $405 million in cash; WiChorus, which sold to Tellabs Inc. for $180 million in cash; Networks in Motion, acquired by TeleCommunications Systems for $170 million; and Kazeon Systems, bought for “triple digit millions.” It has seen activity on the public-markets front as well. Fortinet had a strong IPO in November, and Calix Networks and Solyndra recently filed for their respective IPOs. Not to be out done, VentureWire reports that Bain Capital Ventures has recently closed its fund at $525 million. Bain and Redpoint are among 12 U.S. venture funds to close with at least $400 million since the start of the 2009, according to Dow Jones VentureSource. By comparison, there were 25 such funds raised in 2008.

It’s Elementary - Aside from the magnifying glass, green-plaid coat and mahogany calabash pipe, Sherlock Holmes would make an ideal venture capitalist, writes David Lerner, a serial entrepreneur and angel investor. After seeing the Guy Ritchie version of Sherlock Holmes, he jots down 10 qualities that “investors young and old would do well to emulate.” Holmes’ formidable fists didn’t make the cut.

Olympic Entrepreneurs - Which is tougher: managing a small business or training for the Olympics? What if you combine the two? Apparently, several Olympic athletes own small businesses and their daily training regimen is grueling, leaving little time for the business. “Skiing, massage, yoga—all that comes first,” one Olympic skier tells The Wall Street Journal. “And if I have only two hours of energy left at the end of the day, that’s for the business.”

For Your Reference - Entrepreneurs who fail to check the backgrounds of venture capitalists offering them money might as well hand over their keys to this guy. Or to this firm. Okay, that’s a bit dramatic, but a VC reference check can go a long way, says Mark Suster of GRP Partners. But don’t just go with the “friendly” reference list supplied by the VC. “Make sure to call the companies in that VCs portfolio that didn’t succeed,” Suster writes. “…Ask the CEO’s about the VC when the chips were down. Do research and find some CEO’s who were fired by the VC.” Read more about Suster’s VC reference-check tips here.

Patents Pending - As the Supreme Court contemplates how to retool patent protection for business methods, The Economist weighs in with its anti-patents view: “It is hard enough to find evidence (outside the pharmaceutical and biotech industries) showing that the patent system generally spurs innovation. It is harder still to find justification for business-process patents.” Read on here.

(You can follow Venture Capital Dispatch and Scott Austin on Twitter: @DJVentureWire and @ScottMAustin. Also find our blog’s links on Facebook. Or sign up to VentureWire Alert, a free email that is the very scaled-down version of our paid subscription newsletter VentureWire, which offers comprehensive and exclusive news and analysis on all the venture funding deals, exits, trends and personnel moves in the industry.)

Founder and Chief Executive Henrik Fisker tells Dow Jones VentureWire that he expects to close on the low-cost loan agreement in mid-March, now that his company has met the DOE’s equity commitment requirements. Last month, Fisker closed on $115.3 million in equity funding as it sets out to build a family vehicle that it expects will retail for $47,400 before a $7,500 federal tax credit.

The DOE offered to provide the loan in September on a conditional basis if Fisker meets certain milestones by Feb. 15. The government is expected to extend the loan, as it did with the $465 million loan that Tesla Motors Inc. secured last month.

Fisker ran into some delay getting third-party investors lined up for its funding round due to the economic slowdown, Henrik Fisker told VentureWire: “We had a delay in our business plan last year, so we’re now adjusting it. There was no technical issue; investors simply are coming out later with the money than planned.” On March 8, the CEO is scheduled to be the keynote speaker at the New Castle County Chamber of Commerce’s annual dinner in Delaware, where Fisker plans to build its assembly plant.

Fisker, which recently announced plans to close its Michigan R&D center, hopes to start delivering its Karma vehicle later this year, and said it has received $5,000 deposits from 1,600 people interested in purchasing the four-door car, which can travel 50 miles on its battery power before having to access the gasoline engine that will give it a range of another 250 miles.

One of the milestones Fisker committed to reach under the conditional loan is to sell 11,000 Karma cars at an average price of $87,900 by Sept. 30, 2011, but that number is likely to be different in the final loan contract, also owing to the delay in financing that pushed back the business plan, said CEO Fisker. He declined to disclose the new target, saying only that “it won’t be far away from [the 11,000].”

Read the story in VentureWire here.

In light of this, Venture Capital Dispatch sat down with Philip Eliot, a principal at Paladin Capital Group, a multi-stage private equity fund with a focus on national security, to talk about why these threats are proliferating and how the opportunities are changing for entrepreneurs and investors in the space.

At Paladin Capital, Eliot sits on the board of Unitrends Software Corp., a maker of data protection appliances, and helped manage its investment in CloudShield Technologies Inc., a maker of network traffic management equipment, that recently was sold to Science Applications International Corp.

Here is an edited version of our interview:

Q. What has changed that has made cyber security such a pressing issue?

Networks have become more open. All the tools that make our lives easier make cyber security a more challenging problem. One no longer needs to be physically proximal to data to have access to it, for which corporate road warriors are very grateful. The same architecture means that a criminal does not need to have physical access to data to compromise its integrity.

Q. Nearly every security company we write about these days claims to have some agency of the federal government, usually the Department of Defense, as a customer. Is the U.S. buying that much security or just trying out everything?

Both. There is a lot of testing going on. There are lots of pools of money in the government [like research grants] that are different from buying products in bulk. The dollars are there, but they’re are going to a smaller group than you would get the impression of. But, particularly coming out of the Department of Defense, there are a lot of companies that are selling product, not services, in bulk, like CloudShield.

Q. How is cyber security different than previous national security initiatives, like the development of radar?

It has a different dynamic than we saw in the past, where government was the primary source of R&D. A lot more development is coming from the private sector. Though the innovation is coming from outside the walls of the government, it still plays a large role in driving that through the size of its budget in being a large customer.

Q. Given its high priority, is it getting any easier to sell these products to the government?

When you have a champion on the inside, we have seen that things can go faster, but I’m not sure that the buying behavior is changing. You can still waste a lot of time and money knocking on the wrong doors.

Q. For companies that have not gotten any significant traction in this sector yet, is the window closing?

Cyber security is not going away. So much of our work and commerce takes place in networks. I don’t see any stop to the evolution of how we use those data networks and that’s paralleled by the need for security. The belief that we’ll find the cure or magic bullet to fix [these emerging issues] is naive at best.

Q. Within cyber security, what area do you think is the most promising for young businesses to pursue?

If we knew the answer to that, we’d be entrepreneurs, not investors.

Art by Mike Lucas

Super Ad? - Drew Brees and the New Orleans Saints overcame Peyton Manning’s Indianapolis Colts in yesterday’s Super Bowl, but our eyes were tuned into the commercials, specifically seeking out venture-backed HomeAway.com’s 30-second spot. As we wrote a couple of weeks ago, the heavily-financed online vacation-rental company paid at least $2.5 million to show its first national ad and launch a yearlong campaign centered on Chevy Chase and the rest of the fictional Griswold family of “National Lampoon’s Vacation” movie fame. Was it worth it? Data from Akamai shows that HomeAway.com’s ad appeared to have an effect - soon after the commercial, the 30 Super Bowl advertisers that Akamai tracks received an aggregate traffic spike of 460,000 views during the third quarter, compared to an average of 275,000 visitors per minute during most of the game (Akamai doesn’t break out HomeAway specifically). However, the few reviews of the ad - watch it here - appear to be mixed. The Hollywood Reporter called it hilarious while TVSquad.com said the resurrection of the Griswold family was brilliant, but the San Diego Union-Tribune blasted HomeAway’s spot for essentially being a teaser for a longer commercial on its Web site: “Commercials for ads? That’s just super lame.” And The Wall Street Journal says HomeAway’s ad “didn’t score well.” We didn’t see any other companies spending their venture cash on commercials, but we were expecting something from local-ad start-up Yext after its co-founder tweeted last night, “Yext commercial to air in 4th quarter.” Maybe Howard Lerman was talking about a college basketball game?

Offering Promise - The IPO market could use a swift kick in the butt - while offerings are still trickling out, eight the 10 IPOs since the beginning of December priced below estimates. Will venture-backed Internet marketing firm QuinStreet Inc. jump start the market this week? While investment bankers worry that one “dog” could scare everyone away, QuinStreet is anything but an ugly mutt, at least judging by its financials. In the six months ended Dec. 31, revenue increased 27% to $155 million and income rose 58% to $8.9 million. One concern for QuinStreet, though, is the low barriers to entry in the company’s business, according to WSJ. Meanwhile, Reuters points out that banker Frank Quattrone’s involvement in the IPO may help QuinStreet’s prospects - that is, if he and QuinStreet underwriter Credit Suisse are friends again.

Private Parts - David Hornik of August Capital has got Foursquare “fatigue.” Foursquare is an emerging mobile social-networking service that encourages people to broadcast their location with others. Hornik says it takes a real effort to “proactively check in where you go,” so he wonders it if would be better if Foursquare just broadcasted a person’s location automatically. “Or does that cross the privacy line for most of us?” Hornik asks. Read on here to find out which side of the “privacy vs. utility debate” that Hornik finds himself on.

New York State of Mind - An alert to all New York-area entrepreneurs and start-up executives: The spring program of Startup@Work’s Founder Speakers Series in New York kicks off Wednesday. Moderated by Warren Lee of Canaan Partners, this invite-only program is a series of intimate interviews with successful technology founders and angel investors who share the lessons they’ve learned with the New York start-up community (Check out our profile of the program here.) Lee tells us that Wednesday’s session spotlights 24/7 Real Media, which soared during during the dot-com boom and nearly collapsed in the ensuing bust, before turning things around and delivering a strong exit in 2007. David Moore, 24/7 Real Media’s founder and former CEO, and Mark Moran, former general counsel, will be interviewed. Further sessions include serial entrepreneur Mark Walsh (March 17), Skyhook Wireless co-founder and CEO Ted Morgan (April 21) and Heidi Messer, former chief operating officer and co-founder of Linkshare (May 11). A final spring session will occur sometime in June. Readers of this blog can request an invite by e-mailing startupatwork.org@gmail.com.

(You can follow Venture Capital Dispatch and Scott Austin on Twitter: @DJVentureWire and @ScottMAustin. Also find our blog’s links on Facebook. Or sign up to VentureWire Alert, a free email that is the very scaled-down version of our paid subscription newsletter VentureWire, which offers comprehensive and exclusive news and analysis on all the venture funding deals, exits, trends and personnel moves in the industry.)

See, Jason Kyle not only runs an Internet start-up that links professional athletes with endorsements, free products and opportunities for celebrity appearances, he also plays in the National Football League.

And on Sunday, he’ll be long-snapping for the New Orleans Saints as they face off against the Indianapolis Colts.

Venture Capital Dispatch reached Kyle in Miami this week as he was preparing for the big game.

“I didn’t know it would be this involved when I kicked this off,” Kyle said of his company, with no pun intended. “During the season I spend quite a bit of time working on it, probably two or three hours a day after practice. And I keep with email.”

ProPlayerConnect is backed by venture capital firm Arizona Bay, former NFL quarterback Vinny Testaverde and Daytona 500 winner Michael Waltrip.

Arizona Bay Managing Partner Dave Graham said it’s a bit odd having a portfolio company CEO playing in the NFL.

“We like to have Jason full time, but we realize he can’t be full time,” Graham said. “But there’s a cost benefit because when he’s playing we are put in contact with great individuals. It’s good for business.”

Kyle has spent 15 years in the NFL with such teams as the Carolina Panthers, Seattle Seahawks, Cleveland Browns, St. Louis Rams and San Francisco 49ers. This isn’t his first trip to the Super Bowl, as he was part of the Panthers squad that lost a close battle to the New England Patriots in 2004.

After being traded from the Panthers to the Saints this year, Kyle has had an exciting season. He literally had his hand on the ball in the play that sent the Saints to the Super Bowl, hiking to backup quarterback Mark Brunell who held the ball in place for kicker Garrett Hartley’s 40-yard boot in an overtime win over the Minnesota Vikings.

“It was one of the most important snaps I’ve had,” Kyle said. “I was just hoping everything went well. I didn’t get a chance to see it, but the roar of the crowd told me it was good. It was a pretty exciting play.”

The NFL is a job Kyle will do as long as possible, but he’s very serious about ProPlayerConnect, which is beginning to receive calls from other venture firms wanting to participate in its next round of funding. Kyle said the site has grown quickly, attracting nearly 1,100 athletes who have received more than 78,000 offers. More features will soon be added to provide athletes a way to create an interactive online fan club.

“I think with the type of content we have, it’s going to be pretty interesting entering the fan market,” Kyle said.

But all that can wait until next week. Kyle has another big job he has to finish on Sunday.

Oh, the life of a start-up CEO…

(See our previous story on NFL kicker Billy Cundiff, who also works at venture capital firm Pacific Southwest Ventures. Since we wrote that story on June 4, Cundiff left the Cleveland Browns and signed mid-season with the Baltimore Ravens, which made the playoffs.)

Bravo Health Inc. did something in 2009 that most venture-backed companies can only dream about: It had revenue of more than $1 billion. Yes, that’s right, billion.

To put that into perspective, Google Inc. had revenue of $963 million in 2003, the year before it went public.

Even more impressively, Bravo, which up until 2007 was known as Elder Health, is projecting that revenue in 2010 could be close to $2 billion, said Charles “Chip” Linehan, a general partner at New Enterprise Associates, who co-founded the Baltimore company in 1995 with health care industry veteran David Carliner. The company, according to Linehan, also is generating solid profits.

And yet despite these figures, Bravo does not have immediate plans to go public. The reason? The ongoing discussion in Washington over health care reform.

Bravo, specifically, is a Medicare Health Maintenance Organization. People on Medicare utilize HMOs such as Bravo in order to protect themselves against the so-called “gaps” that Medicare does not pay like co-payments and deductibles. The trade off for people utilizing HMOs like Bravo is that there are more restrictions on the doctors and hospitals that they can utilize.

Bravo, says Linehan, “would do just fine” under every potential health care proposal that has been discussed in Washington. “Our mission is to improve the quality of care and reduce costs. We are part of the solution, not part of the problem.”

But until health care reform either moves forward or is tabled, taking the company public is not an option, he said.

“We want health care reform settled,” Linehan said. “It’s not what it will be. It’s the uncertainty. Once the rules make sense, then we can talk about liquidity options.”

Given that uncertainty, it’s perhaps understandable that Bravo Health CEO Jeff Follick declined to comment about the company at this time.

Both Linehan and Chris Grant, whose firm Salix Ventures also is an investor in Bravo, said health care reform would likely benefit Bravo as it may have squeezed the profit margins of some competitors, prompting those other HMOs to pull out of some markets. Bravo’s largest market is Pennsylvania. The company also offers its Medicare Advantage Plans in Delaware, Maryland, New Jersey, Texas and Washington, D.C. It also offers prescription drug plans in 43 states. All told, Bravo serves more than 360,000 members in partnership with over 30,000 physicians.

“Business has never been better,” said Grant, whose partner David Ward sits on Bravo’s board. “Enrollment is soaring. The company will be fine if something happens (with health reform). It’s not catastrophic.”

Regardless of whether it takes a run at a public listing in 2010, 2011 or 2012, Bravo has undergone a transformation over the past decade that shows the flexibility that both investors and entrepreneurs need to have in order to build successful companies.

Bravo’s mission, said Linehan, has not changed since its birth. The goal then, as now, is to “provide higher quality, lower cost care for the elderly”, specifically those who are lower to middle income, he said. However when it was started, the company was essentially an intermediary, providing adult day care services for insurers.

Initially backed by NEA, Frontenac Company and Coleman Swenson Hoffman Booth, the company for its first five years was “bumping along” while growing its business, said Linehan. Things, however changed some eight years ago when an insurer that Bravo was working with decided to exit from the Medicare business in Maryland.

Losing a key client and significant source of revenue could have been a significant blow to the company, but instead it decided to secure the contract itself and, in turn, revamp its business model to become a Medicare HMO.

Salix, Frazier Healthcare Ventures and Woodbrook Capital, among others, joined NEA, Frontenac and Coleman Swenson in recapitalizing the company in April 2002.

“It’s been huge for us,” Linehan said. “We were able to control our own destiny. Our operating margins improved and we’ve had a solid growth trajectory.”

The company has done several acquisitions, but the majority of its growth, said Linehan, has come organically.

Since its founding, the company has raised roughly $150 million in venture financing, according to Dow Jones VentureSource of which $118 million has come since the the recap, including a $52 million round in 2004 and a $49 million round in ‘07. The company’s venture investors would obviously love to see an IPO, but are willing to let things play out in Washington.

“The level of uncertainty has been pushed out, but we’re very patient,” Linehan said. “We’ve been in a long time, but we are thrilled with the growth.”

Art by Mike Lucas

Seeding The Big Easy - While the people of New Orleans anxiously await the Super Bowl, a new investment fund is forming behind the scenes to renew the city’s entrepreneurial scene after the destruction of Hurricane Katrina. VentureWire reports that the non-profit evergreen fund, called LeapFrog, is designed to accelerate the growth of early-stage, pre-revenue companies looking for proof-of-concept capital. “The problem we’re trying to solve is [that] there is a great deal of entrepreneur interest in New Orleans after Katrina, but there’s not much of a network of angel investors,” Michael Hecht, the CEO of the fund manager, tells VentureWire. “There’s talent here and we believe we’ll find deals.”

No All Borrow Sorrow - Loans backed by the Small Business Administration may be a bright spot in an otherwise bleak lending climate, writes Emily Maltby in The Wall Street Journal as part of a new weekly column called “The Money Hunt” (of which I plan to be a contributor). An industry expert tells Maltby that SBA loans could make up 10% to 15% of overall small-business loans, compared with about 7% to 8% in year’s past. On this note, Mark Davis of DFJ Gotham outlines how small businesses obtain these loans, adding that the SBA isn’t a fit for most high-growth ventures.

Electric Shock - Poor Michigan - just when it thinks it will house one of the electric-car maker transforming the automotive industry, that company picks up and leave. Fisker Automotive, which last month raised $115 million in venture funding to back the development of plug-in hybrid vehicles, said it is shuttering its Pontiac, Mich., facility and moving those positions to its other plant in Irvine, Calif. You might remember that California-based Tesla Motors recently closed its 45-employee office in Rochester Hills and transferred about 15 employees to a smaller office in Auburn Hills. Hey, at least Michigan still has GM and Ford. Kidding aside, Michigan was the big winner last year in the government’s $2.4 billion clean-tech stimulus package - 11 of the the 48 winners hail from Michigan, the most from any state, and two of the biggest payouts when to local car-parts companies Johnson Controls and A123 Systems.

China Caution - Last week we linked to a quarterly report demonstrating that venture capitalists in Silicon Valley are gaining their confidence in the future of the entrepreneurial community. Today, the University of San Francisco has issued its China Venture Capitalist Confidence Index, a survey of 13 Mainland China and Hong Kong VCs that shows their confidence level edged down slightly in the fourth quarter after increasing four consecutive quarters. The report, which you can get here (opens PDF file), includes quotes from several VCs. One of them, Marvin Lai of iTM Ventures, warns: “[T]here is a great concern of Chinese economic overheating, so the [People's Bank of China] has raised the bank reserve ratio by 0.5% to 16% to keep more money in banks….” and comparatively less in the economy. He continued, “Less liquidity to the marketplace might prevent the healthy growth of Chinese enterprises, so we reserve a short-term cautious view to the future high-growth venture entrepreneurial environment in China.”

Up and to the Right - Bijan Sibet of Spark Capital waxed philosophical on his blog yesterday, blaming his red-eye flight for his introspection. But he shouldn’t apologize; his post is worth taking to heart: While most start-ups predict big-time growth - “up and to the right” - usually that doesn’t happen. Nor does it happen in life. “I’ll end this post by encouraging you to not get caught up with up and to right with everything and with each moment in your life,” Sabet writes. “Because it’s rarely if ever a smooth up and to the right.”

Research firm eMarketer reported that U.S. online advertising dropped by 4.6% in 2009, the first decrease since 2002.

However, recent news coming from three Internet start-ups shows not everyone dependent on advertising shed tears on their financial statements.

This week alone, local online advertising provider Yodle Inc. announced a $10 million funding round on the back of a 135% revenue climb in 2009; female-focused ad network Glam Media Inc. said it grew revenue by 35% and raised a whopping $50 million Series E; and online video ad network BrightRoll Inc. declared it doubled revenue and raised $10 million.

These companies aren’t exactly the kind of start-ups that register dinky revenue. Yodle posted revenue of $46 million last year, while at the same time boosting employee count by 50% to 300. Glam hasn’t revealed its revenue figures, but they’re significant enough for investors to agree to a $750 million post-money valuation. And, BrightRoll says it has been profitable for nearly 12 months.

The eMarketer report helps explain why these companies prospered while others struggled. “The various components of online advertising react differently to cyclical and structural changes,” the study says. “While one format might show relatively healthy growth in the recession, another suffers due to the same economic climate. For example, paid search will grow by 2.2% in 2009, while classified ad spending will decline by 30.2%.”

Fortunately for BrightRoll, Glam and Yodle, these companies operate in thriving pockets of the online ad market. Brightroll, for instance, is benefiting from advertisers who now include online video not as part of their experimental spending, but mixed in with their committed traditional media budget. PepsiCo, known to spend big bucks to parade Britney Spears across TV screens during the Super Bowl, opted to sit this year out in favor of a 60% increase in its online ad spend. Likewise, Glam’s stable of Web sites reach out to a powerful spending demographic that attracts premium-brand advertisers, while doctor’s offices, pizza shops and other local business are employing the help of Yodle’s online ad-placement service in lieu of the yellow pages.

That’s good news for some investors who have plowed millions of dollars into start-ups dependent on Internet advertising, including the brokers that connect advertisers and publishers and the developers of technology used to place these ads.

Glam has raised $130 million from investors incuding AG Ventures, GLG Partners, Hubert Burda Media Information Capital, Mizuho Capital and Walden Venture Capital. Yodle’s total financing is about $38 million from Bessemer Venture Partners, Draper Fisher Jurvetson and Draper Fisher Jurvetson Growth and Jafco Ventures. BrightRoll’s fresh funding brings its funding to $16 million from Adams Street Capital, KPG Ventures, Scale Venture Partners and True Ventures.