It's always good when you see a story like this about a friend.

Venture capital investing has taken a nosedive, but deals are still getting done: Two Austin Internet startups will announce deals today totaling $7.5 million.

OneSpot, which has created a Web content aggregation service, has raised $4.5 million from Dallas-based Silver Creek Ventures, and 7 Billion People Inc., a Web analytics company, has received $3 million from SmithCo Investments of Austin.

[...]

Venture investing in Austin companies fell to $57.1 million in the fourth quarter, a 31 percent decline from the same quarter a year ago. Venture funding in Austin companies fell 48 percent for the year to $340.2 million, which was invested in 64 deals. That compares with $658.8 million put into 79 deals in 2007.

The 2008 figures were the lowest since 1998.

But for startups able to raise money, "an economic downturn can be a great time to build a company," OneSpot CEO Matt Cohen said.

"It's a fantastic opportunity, because your traditional big competitors aren't innovating, they're just trying to get by," he said. "That gives you a chance to get in and change the game."

Cohen founded OneSpot in 2005 after five years as an adviser and partner at Austin-based venture capital firm G-51 Capital. Before that, he spent a decade working in digital media, including launching the Houston Chronicle's Web site.

OneSpot's service provides Web publishers with links to fresh content that they can publish on their sites. It works by constantly monitoring hundreds of thousands of Web sites and delivering the most relevant content, which publishers use to supplement their own material.

OneSpot's flagship customer is The Wall Street Journal, which uses the service to find and link to stories on subjects including law and technology.

"Traditional content businesses are under a lot of pressure, and part of that is to do more with less," Cohen said. "OneSpot allows them to be much more efficient with their resources and offer more content to their readers."

OneSpot also has customers in other industries. Semiconductor services company Smith & Associates uses OneSpot to find content related to the electronics industry. Smith & Associates distributes the Web links to its customers by e-mail.

OneSpot, which has 10 employees, will use its new money from Silver Creek to expand sales and marketing, and is hiring across the board, Cohen said.