Goldman, Sachs & Co has become one of the two largest stakeholders in the profitable digital marketing agency iCrossing Inc. It led a new $62 million round of funding — nominally a Series E round — which builds on the company''s $48 million existing capital and raises total private investment in iCrossing to $110 million.

Many existing investors joined in the new round, including Westport, Connecticut-based Oak Investment Partners, as well as RRE Ventures and StarVest Partners LP, both of New York. The company had announced $15 million in Series D funding last summer, but later extended that round to $30 million.

By formalising its relationship with Goldman, iCrossing gets an investor who can provide advice on anything, from acquisitions to a public offering. The company plans to explore various transactional options.

Although he confirmed that the company''s value has increased since the Series D round last year, CEO Jeff Herzog refused to put a figure on its present valuation.

An Advertising Age report on 30 April estimated the company''s 2006 revenue at $63 million, up 114 per cent from the previous year. The current round of funding will be used both for acquisitions and organic growth,

iCrossing began as a search marketing firm in 1998, and has grown into one of the largest companies in the space, after evolving into a digital marketing agency that competes with the likes of Publicis'' Digitas and aQuantive''s Ave A/Razorfish, according to Herzog. iCrossing has been on a buying spree over the past year, acquiring San Francisco-based paid search agency NewGate Internet, UK-based social media marketing company Spannerworks, and aggregation technology developer Sharp Analytics.

The company will use the new funding for more acquisitions, as well as organic growth, as it seeks to grow its web development and social media services. Herzog said: "Marketing and branding within user-generated content and social networking web sites — aka social media — is a hot new area." iCrossing''s client list has 40 Fortune 500 companies, including General Motors and Coca-Cola.

The company uses search analysis to help focus a client''s marketing campaign and branding. For example, a package tour operator that views itself as a travel agency may find that people who want all-inclusive holidays search instead for ''holidays'' or ''vacation ideas''. These subtle but vital distinctions can help to create better-designed web sites and marketing campaigns.

The ongoing expansion will provide access to the full digital marketing budgets of large clients, not just their search budget. Search is still the most important area of online advertising, but a broader array of services is more desirable, both from the client''s point of view and in the event of a future acquisition. There is rapid consolidation going on in the online advertising field, and the move could lead to a bonanza in any potential future buyout.

Another private round is not out of the question, say analysts, though the company is not planning one right now. Herzog said that the company will make an important announcement next week. He feels iCrossing''s need for capital in the future "will take care of itself", either through the markets or private placements.

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