Web X.0

Speaking tomorrow

I'll be speaking tomorrow at Susquehanna Financial Group's Global Opportunities Conference. More info about the conference here.

If you read this blog and are attending the conference - please stop by to say hi!

Email subscriptions via FeedBlitz

This is waaaaay overdue...

All you folks who want to stay posted on my doodles here, but aren't on RSS yet - now you can subscribe to this blog via email. To do so, simply fill your email address in the small form on the left rail, and then type in the CAPTCHA and the activation link in your email. You will then receive anything I post in your email shortly after it's live on the site.

<-----------------------the subscription box is here (more or less... I'll leave it with a yellow background for a few days so you can easily find it)

Go ahead and signup!

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[1] The email subscriptions are powered by FeedBlitz, a highly recommended email management service which (full disclosure) we might be doing some interesting stuff with in the near future. 

 

outbrain, funding, bubbles, etc

This morning we announced the closing of our seed financing by LGiLab (www.lgilab.com),  GlenRock Israel (www.grg.co.il), and Sigma PCM (www.sigma-pcm.co.il) among others. We wrote about this on the corp blog, and more coverage is on Mashable, TheMarker (Hebrew only), alarm:clock, Ouriel's blog and StartupIsrael.

One of the reporters talking to me this week asked/hinted at outbrain being a bubble company founded with the intention to flip it to a Yahoo or Google in a few months. As I'm allergic to that notion of 'build-to-flip', I thought I'd share some highlights of my email response here:

I know this probably sounds to you like a Bubble2.0 thing, but -
My track record has been in building a long-term, sustainable, revenue-generating and independent company. That is the *ONLY* model I am aware of for building a company. I don't think there is such a thing at all to 'build a company in order to sell it'. The companies that are sold (or - flipped) are the very few that happened to luck out. Statistically I think you probably have better chances of beating a Vegas casino than you would in selling a company that was built to flip (and Vegas is much more fun than the blood, sweat & tears of entrepreneurship!!... ;-)

I think it's foolish to start a company without a clear path to making $$. Given my experience in building one of the only contextual ad networks in the world that's successfully competing with Google AdSense, I (and my investors) have a lot of confidence in our ability to monetize the outbrain service when the time is right. We all felt that focusing on that part of the business now would be a distraction, and I think our community members will agree.

Feel free to take the angle that will interest your readers, but you should just understand that my approach to building companies is very very very different from that of a 1st-time entrepreneur who's dazzled from acquisition like those that Flickr or del.icio.us had, and is starting a company that will be built with $50K and sold to Yahoo within a year for $10M. All that stuff is completely not in our lexicon... ;-)

The Digg Idiocracy

I'm often asked whether, at the end of the day, outbrain isn't just a variation on the Digg theme. While the answer is clear to me (NO!), it's sometimes difficult to convey.

Today I read a nice post over at uncov.com about the recent Digg HD-DVD encryption key debacle. I couldn't have said it better...:

"Digg users champion democracy and the power of the people but lets be honest: Digg is an idiocracy run for and by the idiots. Their sense of false rights would be funny if it weren't so sad. It's a linkdump where people submit or buy links to drive traffic to their blog and not much more."

Digg is a great place to visit, IF you have an hour to blow on stuff that bored teenagers find to be cool.

Microsoft finally understands - dog chasing is dead

With today's news re Microsoft looking to acquire Yahoo, it seems like they finally get it -
The performance-based advertising world is like no other space that Microsoft has ever played in before.

In spreadsheets, browsers, servers, databases, etc, etc - the Microsoftian way of doing business works like a charm. In all those categories, dog chasing proved to be a great way for Microsoft to win the market because it could out-price and out-patient its competition. Oh - and tying products into the OS monopoly didn't hurt too much either... ;-)

With performance-based advertising[1], dog chasing ceased to be an option. You can't undercut competition, because competition ain't pricing their product (it's the customers/advertisers who do, and they price it upwards, not downwards). You can't out-patient your competition because performance-based advertising has this wonderful virtuous cycle about it:

• The more clicks you have, the smarter your yield-optimization algorithms get...
• ...as the algorithms grow smarter, you can better predict your revenue per page...
• ...as your revenue-prediction power grows, you can better price new distribution deals with the confidence of not losing money...
• ...the better you can price deals, the more distribution you get...
• ...and the more distribution you get, the more clicks (and $$'s...) you have.

This virtuous cycle means that with every *second* that Microsoft was spending figuring out its world-domination dog-chase plan, Google (and others, Quigo included) were opening the gap making it even closer to impossible for Microsoft to become a real player in this space. And every purchase of a DoubleClick, RightMedia, etc just moved way more click data out of Microsoft's hands, opening the gap even more. Chasing a dog that's only gaining momentum faster than you, well - that's not a great chase to be in... 

I've had many conversations with good friends over at Microsoft over the past couple of years. And while the notion was that "we changed", "there's no more NIH Syndrome", "we're ready to make bold acquisitions needed to win this market", etc, etc - It's clear now that none of that really registered there and the plan all along was to dog-chase Google to victory. Looks like the price for realizing this mistake is going to be pretty big.

A ton more coverage on TechCrunch, Henry Blodget... oh what the heck - and everyone else on the planet.

[1] Disclosure: I'm co-founder of Quigo, a player in this space.