Motally raises $1M

Metrics matter. That’s especially true on the Internet where the number of “eyeballs” a site gets can influence what a company can charge advertisers.

But as people move from desktop browsing to accessing sites via mobile phones, tracking the exact number of visitors has become more difficult.

San Francisco-based Motally is working to make it easier for online publishers to know just who is accessing their content and how visitors are interacting with their websites. The startup recently raised $1 million from BlueRun Ventures and angel investor Ron Conway, according to regulatory filings and the company.

Motally is selling into a growing market. The number of U.S. mobile phone users that access the Internet each day doubled to more than 22 million in 2008, according to research from comScore. The number of mobile Internet users could double again in 2009, thanks to the growing ubiquity of devices such as the iPhone which operate on faster, 3G networks.

The company will use the funds it raised to hire a sales team and to fill out its team, says Motally founder and CEO Arte Merritt.

Motally’s technology allows a publisher to track what devices, carriers and individual users are accessing its content. The company sells a business version of its service for $1,000 per month, targeting websites that record more than 25 million page views a month.

Tracking mobile Web surfers is a problem for big companies, says Merritt. He got a taste of the frustration of tracking mobile users while he worked at Yahoo.

“Operators were paying Yahoo up to 25 cents per user and not being able to track those users was a real problem,” he says. “There’s something really missing here when these guys don’t have the numbers.”

One of the biggest head-scratchers Merritt saw at Yahoo Mobile was why people would start to register for Yahoo and then quit the process mid-way through. Only one in nine users would actually make it through the sign up process and nobody at Yahoo knew why, he says. He started working on Motally to solve just this type of problem, he says. “With a product like this, you could see why people were dropping off.”

The startup’s recent funding comes in part from BlueRun Ventures, which has ties to mobile phone maker Nokia. BlueRun closed its fourth fund earlier this year at $240 million, below the $300 million target it had set.

BlueRun brought the deal to individual investor Conway, an early backer of Google, who helped bring the Series A in over $1 million.

The technology behind Motally’s service helped attract BlueRun Partner John Malloy. Several aspects of tracking a mobile user’s Internet activity are more difficult than tracking a computer user.

“When you’re out with your device, you’re not fixed, you’re moving across different networks,” says Malloy. “You have much more complicated software environments on the device itself. You have to solve a lot of things. There are people who can solve them for a particular product or network, but getting it to work across all devices and networks is a big thing.”

A big problem in tracking mobile users is the carrier proxies they are routed through. These make it difficult to know actually where a user is coming from. “We had one customer who was convinced that 100% was coming from U.S. users, but when we did an analysis and found 80% of their traffic was coming from overseas,” says Merritt. “You can imagine how difficult it is to improve your product when you don’t know who your users are.”

Analytics companies have been an attractive target for big strategic acquirers. Google, for example, acquired extensively to build its Google Analytics traffic tracking suite. It bought Urchin Software Corp. in 2005, Measure Map in 2006 and Trendalyzer in 2007, according to reports. The company did not disclose what it paid for these companies.