News and insights I’ve seen over the past few days:
First, Google hit a new high Friday.
Third, online spending is up again. Another study says so.
Jantsch notes that Intuit has a “follow me home” service to understand its customers better. Great idea.
Ars on Google on MSFT Vista integration. This is not going to go away soon.
Microsoft clears a hurdle to approval of its aQuantive acquisition.
Another Google wall of ideas.
Well, this is interesting:
MOUNTAIN VIEW, Calif. – July 9, 2007 – Google Inc. (NASDAQ: GOOG)
announced today that it has signed a definitive agreement to acquire
Postini, a global leader in on-demand communications security and
compliance solutions serving more than 35,000 businesses and 10
million users worldwide. Postini’s services — which include message
security, archiving, encryption, and policy enforcement — can be used
to protect a company’s email, instant messaging, and other web-based
communications. Under the terms of the agreement, Google will acquire
Postini for $625 million in cash, subject to working capital and other
adjustments, and Postini will become a wholly-owned subsidiary of
Google. The agreement is subject to customary closing conditions and
is expected to close by the end of the third quarter 2007.
“With this transaction, we’re reinforcing our commitment to delivering
compelling hosted applications to businesses of all sizes. With the
addition of Postini, our apps are not just simple and appealing to
users — they can also streamline the complex information security
mandates within these organizations,” said Eric Schmidt, Chairman of
the Board and Chief Executive Officer of Google.
Happy days in those offices, I’m guessing.
According to Yavonditte, Quigo has perfected a relevancy algorithm that does AdSense one better – far better, to paraphrase his words. Quigo is focusing on picking off the high-brand-value publishers who use AdSense but are looking for a network solution that pays them more for what they believe is significantly better inventory than the lowest common denominator AdSense approach.
Well, it’s been a long three years, but Michael recently landed Time Inc. as a customer, in a high profile partnership that has shined the spotlight on the (sort of) startup. So I asked him for a Searchblog Brief Interview. The results are below.
So, first question. What do you think motivated Time Inc. to work with Quigo over Google?
A few reasons: Quigo will make Time Warner more money over the next 3-years. They can leverage their dominant media brands to command top prices from advertisers and begin to “bundle” performance-based advertising with more traditional forms such as banner ads. Time’s senior management team spent a lot of time with Quigo’s team over the past 6-months. It’s a real partnership based on economic and product development considerations. They want to sell their advertisers into the program — an important yet misunderstood part of our business model, and not an area I wish to spend too much time on here. They want to control their pricing and relationships. Our system let’s them do both. They want to collaborate to build new ad formats. And, they want world-class yield management. Yield is one of our core competencies.
We package all this up like no one else in the world today and deliver within a white label environment. The macro trends favor our approach here.
When you say “macro trends”, can you elaborate? Sure. We’re seeing more and more publishers beginning to use our “you sell, we sell” model. This means that they are starting to value this aspect of our model much more than 2 years ago. Many publishers are beginning to embrace transparency. It means different things to advertisers and publishers. Publishers like to know what their pages are really worth. They’re more interested than before in auctioning off premium placements — not remnant placements. This was unheard of 2-3 years ago. This is precisely what Quigo does: we create hyper-transparent marketplaces for each placement on each site. This movement will only get bigger and such a trend benefits Quigo.
Aren’t publishers’ worried about losing their premium CPMs to an auction that pushes it toward remnant pricing?
I don’t think this will happen. On quality sites there will always be a pool of inventory that a publisher, with a sales force, can sell at high rates. Then there are the placements that sit between premium and remnant. They’re usually filled with graphical ads, and often purchased by hybrids. Hybrids are advertisers that care about direct response and building brands. They’re typically the brokerage houses, PC makers, banks, insurance companies, etc. With the right business model and auction approach, a company like Quigo can make such placements into terrific marketplaces. We have many “text-only” placements that yield better than traditional CPM placements. It doesn’t always work this way but we’re getting better and better at yield and targeting. As such, the net value of each of our placements increases substantially over time. Publishers that still sell through bi-lateral negotiation can, in many cases, do better. This is art and science colliding.
I have heard from analysts that publishers are seeing higher eCPMs using Quigo than with Google. Care to tell me how and why?
We have very solid eCPM’s and feel like we can compete with anyone within the branded or premium segment. Our results have gotten progressively better because of our relentless focus on yield optimization algorithms and some very craftly tweaks to our business model. We’ve pioneered the “art & science” of site-specific, page-specific auctions. How do you price each placement? Which placements are important? When should we use semantic targeting vs. psychographic targeting? What type of ad format works best? We’ve been doing this from the beginning and it’s really paying off for our customers. I give the Time, Inc. folks a lot of credit. They actually rolled up their sleeves and dug into our model and tried to validate much of this through a significant amount of dialogue between us. They know much of what we know and they chose us because they truly believe we’ll make them more money.
Does this scale? I mean, if what you say is true, why isn’t everyone using Quigo?
Can we scale? People have been asking us this question from the beginning. We’d like for all premium and branded publishers to work with us, but it’s not quite that easy. We compete with some of the fiercest and most sophisticated competitors in all of business. Breaking through takes time, effort and luck. The Time, Inc. partnership puts AdSonar in the top tier of ad servers in the U.S. with more than 20 billions ads served per month. This is up from 6 billion/month in 2006.
We launched Time’s properties in less than 2 weeks and only hired one new employee in anticipation of the launch. We achieved 99.8% ad coverage in those two weeks. As has been reported, we’re estimating that this partnership will generate over $100M in three years. We’re obviously quite proud of what we’ve achieved to date but always strive to get better.
Could Quigo take on tons of new clients like Time Inc right now?
I wish there were tons of customers like Time Inc. in terms of brand, quality and scale. The answer to your question: Yes.
Thanks Michael, and good luck!
I just got my copy of Mark Frauenfelder’s “Rule the Web” and I can’t wait to dive in. If you want yours (Mark is the editor of Make and a partner of mine in Boing Boing, which he founded), head here!
(image clipped from USA Today story)
We all know the Valley lore around garages. If you read my book, you know Google’s garage was owned by Susan Wojcicki, who went on to work at Google, and whose sister ended up marrying Sergey. Here’s an USA Today story about the garage. From it:
After earning her MBA in 1998, Wojcicki bought 232 Santa Margarita Ave. for about $600,000. She rented the garage to two Stanford students for $1,700 a month to help with the mortgage. The renters: no ordinary slackers, but the Google Guys, Larry Page and Sergey Brin, who incubated Google(GOOG) right there.
AlarmClock has the news:
Norway’s Fast Search & Transfer has acquired US-based AgentArts for an undisclosed amount. San Francisco-based AgentArts, which was actually founded in Australia, has has developed a personalization and recommendation engine.
AgentArts had received funding from Aegis Partners, Amphion Capital Management, TiNSHED Corporation, Amtabity, Nokia Innovent. It competes with Pandora and The Music Finder in music as well as more broadly with Aggregate Knowledge, Choicestream and Kefta, which was bought by Axciom
From our pal Gary, who watches new research papers:
A list of accepted papers that will be presented at The First International Workshop on Data Mining and Audience Intelligence for Advertising (August 12, 2007, San Jose, California, USA) has been released.
Here’s a selected list:
+ Pay-per-Action Model for Online Advertising
by Mohammad Mahdian, Kerem Tomak, Yahoo! Research, Santa Clara CA, USA.
+ More Bang for Their Bucks: Assessing New Features for Online Advertisers
Daryl Pregibon, Diane Lambert, Google Inc., New York, USA.
+ Sensitive Webpage Classification for Content Advertising
Xin Jin, Ying Li, Teresa Mah, Jie Tong, Microsoft adCenter Labs, Redmond WA, USA.
+ Discovering Information Diffusion Paths from Blogosphere for Online Advertising
Avare Stewart, Ling Chen, Raluca Paiu Wolfgang Nejdl, University of Hannover, Hannover, Germany.
+ Finding Keyword from Online Broadcasting Content for Targeted Advertising
Hua Li, Duo Zhang, Jian Hu, Hua-Jun Zeng, Zheng Chen, Microsoft Research Asia, Beijing, China.