EDITOR'S NOTE: This is the first in a two-part series looking at new Internet startups and how they're raising money to launch their businesses.

In the 1990s the standard business model for an Internet company was to throw venture money at it and hope people would flock to the site. That optimism was fun for a while and made plenty of people plenty rich, but it crashed about six years ago.

But that's in human years. In Internet years - which folklore equates roughly to dog years - it's been several generations.

The first dot-coms were all about the technology and tended to be focused on solitary functions like e-commerce and research, says David Mandell, founder and vice president of marketing of Boulder-based Me.dium.

The new Internet companies are changing the way people use that technology and making Internet use a social activity. Today's "social networking" dot-coms are "leveraging the people dimension of the Internet," Mandell says. "How do I create a new way to take advantage of ... the knowledge, existence, interaction and connection with other people?"

Me.dium, where users let their friends see where they roam around on the Internet in real time, "brings the social and contextual value you get in your real existence" - like bumping into your friends and having conversations about what's going on - into your online existence.

Boulder-based iggli takes advantage of how young people use the Internet by "marrying social networking with music services," says founder Tom Higley.

iggli is aimed at 13- to 24-year-olds, a demographic Higley says is underserved in both those services, and the company is relying on this group to tell iggli what music it wants to hear. iggli gathers that music, making it available online in a space where listeners can download it along with discussing it with their friends. "Think MySpace meets iTunes," Higley says.

iggli will launch in fall 2007, right after school starts, he says.

Louisville-based Lijit Networks Inc. is another dot-com trying to make the Web more like real life by providing a different kind of search capability, says Todd Vernon, the company's chief executive.

A Google search provides more hits than a user can possibly get through, and many are irrelevant, says Vernon. That's because it's too impersonal.

"In the real world if you're buying a car you ask your friends. But online you don't have the same ability to ask your friends," Vernon says.

Lijit provides a search mechanism bloggers place on their blogs so "I can go to a friend's blog and type in 'real estate in Keystone,' and I'll get photos of his cabin that he's collected during his research and all this content he's been creating over the last two years."

Boulder-based Confluence Commons is creating a "consumer-oriented content aggregation" Web site. Founded and funded by dot-com wunderkind Jared Polis - who made his millions creating and selling BlueMountainArts.com and ProFlowers.com - the company is reluctant to reveal more details until its beta launch in July.

Although they faded from the headlines, "the dot-com never really went away," Polis says. What went away was just the capital side of dot-coms, and now that side is slowly becoming newsworthy again as the new dot-coms attract angel and venture funding.

"The boom and bust is reference to capital markets," he says. "It's a lot less cyclical than people assume. The difference today is they have to have a revenue model."

Polis wouldn't state how his new dot-com will make money, but the other local players have all had to answer that question in order to raise their seed funding.

Nearly all have all said the same thing - advertising.

Advertising on Me.dium can be "extremely contextual and relevant," Mandell says, because it's tracking what users are doing in real time. "What we can do is advertise to people, not pages. We know these people are shopping for a mid-size sports coupe, and it doesn't matter what page they are on. When you're on Audi's Web site we can reach you with an ad for BMW."

Me.dium, which has 20,000 beta users, hasn't reached out to advertisers yet. "Comfortably backed" with an undisclosed amount by Boston-based Spark Capital, Denver-based Appian Ventures and an unnamed source along with founders including Mandell and Kimball Musk, the 35-employee company is "completely focused on the user," Mandell says. "Then we will build in advertising and revenue streams."

iggli will draw advertisers interested in reaching iggli's target market, a group that spends between $150 billion and $190 billion of their and their parents' money a year, according to Higley.

The 10-employee company hasn't raised venture capital, but investors so far include Higley and fellow board members Niel Robertson and Howard Diamond.

Higley won't disclose how much the trio has chipped in, stating only he came onboard as funder and CEO when another individual who wanted to fund the company approached him. "We didn't like the model or the team in the way we saw it. ...  When I stepped in I made a bunch of changes. It's very important for me to look at what's going on in the industry."

With its capacity for "vertical search" - looking at constrained subject matter compiled by experts - Lijit will offer advertisers a very targeted audience, Vernon says.

The company has raised more than $900,000 in venture and angel funds and will close on a $3.3 million venture round in this month. Fundraising success - from the likes of Colorado Fund I, Brad Feld, Seth Goldstein and Paul Berberian - may be due to Vernon's success at raising $150 million when he was at Raindance Communications (now part of InterCall since being purchased by West Corp last year).

Vernon thinks he'll be able to ride the next dot-com wave further than the foreseeable future. "Companies like Lijit that are trying to mine information that isn't obvious will have a long lifetime," Vernon says. "The information has always been there. If it were easy everyone would do it."

Contact Caron Schwartz Ellis at 303-440-4950 or csellis@bcbr.com.