Major advertisers (and their ad agencies) typically want audiences that are larger than most blogs reach. Independent of their potential, few blogs can justify paying up front for an ad sales rep. Results could take months and may not cover costs.

One solution used by many top blogs is Federated Media Publishing:

At FM, we believe that the best conversations are those where all parties are engaged, informed, and valued. Working with our marketing and publishing partners, Federated Media is helping to define this innovative form of online marketing: a three-way dialog among creators, audiences, and marketers.

(Hmm; too vague and high-minded for my taste. What percentage of CPM display ads are "conversations" vs. just paying for attention?)

Yesterday, Rafat Ali of paidContent.org noted:

Federated Media, the high-profile blog ad network founded and run by John Battelle, has hired investment bank Savvian, potentially to look for more funding, and maybe a sale for the right price.... Another source, this one among the interested parties, says that FM is indeed looking to raise as much as $50 million, and the valuation is in the $125 million pre-money range.

Read the post for details on earlier funding.

Today, Erick Schonfeld of TechCrunch weighed in:

This action was taken after FM Publishing was approached by several investors. One investor, we have learned, put a $100 million buyout offer on the table for the entire company, which FM Publishing declined.

Read that post for a great quote from John Battelle about having to turn down acquisition offers at The Industry Standard in 2000.