San Francisco - Web 2.0 companies raises more than $464 million during the first half of 2007, the highest half-year total on record for the sector and more than 7% more than in the same period last year, according to a new report from Dow Jones VentureOne and Ernst & Young.

The firms attributed a large part of the increase to sector growth in Europe and Israel, as well as growth outside of the Bay Area, the birthplace of the technology.

"From 2002 to 2006, literally 40% of all Web 2.0 deals were located in the Bay Area," said Jessica Canning, the director of global research at Dow Jones VentureOne.

"But in the first six months of this year, that figure dropped to just 20% and seems to be related to the presence of fresh investor blood in the space. It seems many longtime stalwart Web 2.0 investors have filled their portfolios with Bay Area companies and are stepping aside, giving new investors opportunity to scour for promising deals in less-saturated regions."

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