Outbrain Archive

Last week NY-based recommendations service Outbrain raised $12 million with a total of $18 million in total venture capital funding. Today Outbrain is announcing the launch of their revenue model which they are calling, "Sponsored But Good".

Here’s the idea – by now you’ve probably seen the Outbrain ratings and recommendations widget on sites across the Web. Going forward if the publisher enters into the program, whenever possible, a maximum of one of the recommendations will be a sponsored recommendation. Outbrain assures me that the sponsored recommendation will be closely related to the content being discussed in the blog post. The interesting thing about this program is that the links will never point to a product page; instead they will point to another blog post discussing the topic. So Apple might buy the iPhone topic and point the traffic to a blog post about the iPhone, etc.

Here’s an example of what the recommendations box will look like:

The content site and Outbrain will share in the generated revenue from the click. Outbrain says that if you decide not to signup for their program, any monies earned through your blog will be stored in an account and donated to charity at the end of the year. This is the first time I’ve seen any advertising company do this.

I like the concept of the Sponsored But Good program but after buying millions of dollars in media year-over-year, here are my concerns with the program:

• Enough supply – are there enough blogs in their network and enough blogs that will activate the feature to give Outbrain enough inventory to sell?
• Deep sales force? Since this concept is new, it will take a lot of convincing to get brand marketers to sign off on the ad dollars. They will need to overcome the objection of "why should I spend money to push traffic to another blog post and not my brand site?" Also, they will need to sell enough ads to have at least a decent fill rate initially
• How many clicks will it take for a blog (even a massive one) to make enough money to make the program attractive?

If Outbrain is able to convince brands to try out this new model, they could do very well with the program. It will just take a lot of sales and convincing to get the buy-in for this new online advertising form.

Note – Outbrain asked me for my feedback on their model a couple of times over the past few months. I was never paid – just reviewed what they had and provided my feedback. Most of what I told them are the same things I wrote above.

Last year NY-based Outbrain raised a $5 million Series A round of funding. Today the company is announcing a new Series B round of funding to the tune of $12 million. Including a $1 million angel funding, this brings the total funding for Outbrain to $18 million dollars. Previous investors Gemini Israel Funds, Lightspeed Venture Partners and GlenRock Israel all returned for the round and the round included new investors Zohar Gilon and Rhodium.

Outbrain provides a rating and recommendation widget that can be embedded into a blog or Web site. Outbrain has also partnered with several RSS readers to incorporate ratings directly into the reader. The recommendations can be set to only the current site or can be open to a network of sites. We’ve been using the widget for about a year now and have provided feedback to the Outbrain team on ways to improve the service. In December Outbrain launched the link zapper which allows their partner sites to remove a recommendation when it doesn’t fit the article content.

The Outbrain service is available as a widget for most blogging and CMS platforms. There’s also an API for developers to leverage.

I can only guess that this type of warchest is to hunker down to be able to have funding to last through the current economic environment. To be completely honest, the first time I read their release I thought they raised $1.2 not $12 million dollars. In my conversations with the Outbrain team, it’s easy to tell that they are very well educated about the Web and are passionate about content discovery. It will be interesting to see where the monies are allocated going forward.

Update: Yaron Samid of TechAviv has some thoughts on why Outbrain got so much cash.

Update 2: Yovav "Jay" Meydad of Snap found out about the funding earlier but held back in posting. Very well done – he made sure that Outbrain got as much buzz as they could from the story. I do this as well and I wish more blogs/news outlets would as well.

Here’s the latest news from a variety of NY-based startups. If you are a NY-based startup and have news about your company, send it in.

KickApps

KickApps announced today that they have hired David Lapter as Chief Financial Officer and Tom Gaffney to head up the company’s expanding Customer Success division. Apparently the Customer Success division works on strategy and creative services.I’ve never heard of a Customer Success division but I like the idea! Check out all of our KickApps coverage.

Outbrain

Outbrain launched an update to their widget this week called the "Link Zapper". We run the Outbrain recommendations widget on CN (you can see it at the end of this post). The widget recommends other posts both from CN and from our whitelist of partner sites. The Link Zapper allows us to easily remove a link that might not be a good fit for the source story. It’s a very manual process and while I am hoping for some automated tools in the future, it’s a good start. Check out all of our Outbrain coverage.

ZocDoc

We’ve covered ZocDoc extensively on CN and I believe it could be the breakout star of 2009. ZocDoc provides online management for doctor, dentist and other healthcare practitioners. Forbes magazine named ZocDoc the winner of their small business contest. The announcement came this week and ZocDoc won $100,000 to further develop and expand their service.

Magnify.net

Earlier this week Magnify.net announced the launch of Thwoop.com, an online community for featured entertainment content and user-contributed videos. The concept for Thwoop.com came from children’s toy e-tailer Brand Performance and the site will be powered by Magnify.net. Check out all of our Magnify.net coverage.

NY-based content ratings and recommendations provider Outbrain has announced a new distribution partnership with blog network b5media this morning. Under the terms of the partnership, b5media will install the ratings and recommendations widget on all 300+ blogs in the b5media network. Financial terms of the partnership were not disclosed.

The Outbrain widget allows blog readers to rate the quality of the content and receive recommendations for other content based on their ratings. Recommendations can come from the individual site or a whitelist can be setup where sites can partner together and recommendations are shared across the listed network. 

The more sites that Outbrain can partner with, the stronger their recommendations network becomes. From my perspective that’s where the Outbrain value lies. The raw ratings are not worth a lot to me as I am never sure what it is that the person is ranking. It could be spelling, grammar, quality of the content, subject matter, etc.

Outbrain has announced that the discovery portion of their ratings widget is now public and available for any blog to use. We have been running their widget on CN for about 60 days. So far, 429 clicks through the recommendations option, of which 295 were from inside CN where people were clicking on "same site" recommendations and 134 were outside referrals from people clicking on CN posts that were displayed as recommended reading on other blogs outside CN. When you install the widget, you can select to only show related stories from your blog, from blogs you select or from any blog running the widget as well.

I’ve said all along that ratings alone really aren’t that meaningful. Especially without information about the rating party. But the idea of tying ratings and content discovery together makes the Outbrain widget much more useful. The ability for a user to view two stories (or more) versus only one can mean profitability for a blog.

Outbrain can also populate a most popular widget based on the ratings and they provide an analysis report based on your user ratings and recommendations.

Here is an example of what the discovery widget looks like on CN:

The only thing I’ve noticed is that sometimes the suggested stories don’t seem to match up with the original story. In this case, the original story was about Twitter but somehow the system felt like a Google Calendar story was related. I am guessing the system gets smarter over time.

What would really kick ass is to get this discovery bit into the rss feed. My guess is that their business model will be to drop in sponsored related links over time. Check out my chat with Outbrain executives from last year. Adam at Mashable has some additional thoughts on the recommendations.

With its technology team in Israel, NY-based Outbrain has raised $5 million in Series A funding. The VC firms participating in the round are: Gemini Israel Funds and Lightspeed Venture Partners. GlenRock Israel, which backed Outbrain since its inception, also participated in the round. The company raised $1 million in seed funding last year.

Outbrain provides a rating and recommendation widget that can be embedded into a blog or Web site. Outbrain has also partnered with several RSS readers to incorporate ratings directly into the reader. The recommendations can be set to only the current site or can be open to a network of sites. We’ve been testing the Outbrain functionality on CN over the past 10 days and will have some insights and a review after our test concludes later today.

Outbrain notes that following the investment, Daniel Cohen from Gemini, Yoni Cheifetz from Lightspeed and Ziv Kop from GlenRock, will be joining Outbrain’s board of directors.

Check out our discussion with Outbrain from last year. Other players in the ratings space include SezWho, Disqus and JS-Kit.

Update: Om wonders what their business model is. In my discussion with Outbrain last year, sponsored recommendations was their business revenue model at that time.

Here is an example of the widget on CN with a story from yesterday:

Editor’s note: I was provided a 8AM Easstern embargo but other sites have already posted earlier (TechCrunch) so I will post as well.

Yesterday we wrote about Disqus launching their comments tool and today we have another, SezWho. For a demo of how SezWho works, check out my friends at ReadWriteWeb and VentureBeat – both sites have the SezWho comment tool embedded. If you check out my title, I note that SezWho might be the best of the pack of comment tools. Why? Continue reading…

SezWho builds up distributed ratings and reputation which in simple terms means that your comment here on CN can add value to your comments on RWW, etc. In speaking with SezWho CEO Jitendra Gupta he said that the idea is to "carry your reputation with you" and can help CN leverage whether you should be allowed to comment directly or require validation, etc. The team has filed several patents around their technology.

They aren’t building a destination site but rather a distributor site – meaning that they want bloggers to use the tool. They offer a free version and soon a premium version with more features and access. The team recently closed a $1 million Series A round of financing.

Here is an example from VentureBeat:

The new features they are rolling out today include:

Stats for commenters Verification system so no one can "fake" your account "Red Carpet" which shows the top rated commenters on a site A badge to show your score within the SezWho network – Jitendra suggested that site owners might use the badge to show how they work with the community

Back to why I think it’s the top of the crop. First, comments remain on your site and aren’t touched in any way. Search engine optimization remains, no issues with "what if this startup goes under" and it keeps everything nice and tidy. Also, the widget is placed on top of the comments and adds value to both the reader and the site owner. I could see a great mashup of Outbrain’s personalized ratings plus SezWho’s technology on the comment side to create a powerful force in comment ratings.

Some have asked me when or if I will install any of these tools (JS-Kit, SezWho, Outbrain, Disqus, etc.) and the answer is that I am still working on a strategy around this area. Our relationship is most important to me so whatever I add has to add value for you and has to make sense from a technology standpoint.