(Business 2.0) – Focus groups are fundamentally flawed: They're time-consuming, expensive, and unreliable, since participants often alter their opinions to fit in. Enter Umbria Communications, a startup based in Boulder, Colo., that's transforming the Internet into one gigantic focus group. Its software, called Buzz Report, scours 13 million blogs to discover what consumers are saying about new products and trends. Since its launch in 2004, Umbria has scored $6.7 million in funding and nearly 40 clients, including SAP and Sprint. Electronic Arts uses the software to see what bloggers are saying about upcoming games so it can predict demand.

Though Intelliseek and Technorati also crawl blogs, Umbria's automated software is more sophisticated. The brainchild of company founder and predictive analysis expert Howard Kaushansky, Umbria uses language-processing algorithms that track positive and negative mentions of a brand and predict the age range and gender of every opiner. Those capabilities have attracted market research firms such as G Whiz Entertainment, which relies on Umbria to help its clients craft Gen Y-targeted marketing campaigns. Says G Whiz director of client services Bethany Harris, "It's a medium where people readily profess very private thoughts in a very public forum." -- BRIDGET FINN