Peter Kafka

Recent Posts by Peter Kafka

Outbrain Isn’t Going Public Yet. But a CFO Hire Gives You a Hint About Where They’re Headed.

yaron galaiIs Outbrain, the content-recommendation service, getting ready to go public?

The Israeli tech press says that’s the plan, and offers varying valuations the New York-based company is supposedly seeking.

And Outbrain, which has raised $64 million so farcould go public, one day, says CEO Yaron Galai.

But not anytime soon.

For starters: Up until last week, the company hadn’t had a chief financial officer — a key role for a public company.

Equally important: The company hasn’t filed any public offering paperwork with the SEC, Galai says. (Until recently, people outside the company could vet this themselves, by checking with the SEC. Now the JOBS Act allows private companies to keep their initial SEC IPO paperwork secret.)

Given that the IPO filing process takes months of back and forth between regulators and private company accountants, this means you certainly shouldn’t expect an Outbrain offering in 2013.

Outbrain is the largest and best-known of a new breed of company that makes money funneling traffic from one publisher’s site to another. It gets paid whenever someone clicks on its sponsored listings (those are the ones labeled “From the Web” at the end of this story), and gives the originating publisher 60 percent of the revenue.

Publishers (like AllThingsD) also benefit, because Outbrain provides recommendations for other stories that will keep readers on the original site.

So, when could we see an Outbrain IPO? Here’s what Galai told me yesterday via email:

Otherwise — we keep looking to lock the biggest and most vibrant marketplace for content recommendations. There are strong network effects in this business, and both users and publishers gain most by having one vibrant marketplace. We’ll keep exploring all funding routes, including the public route, that will help us maintain our leadership.

And about that CFO hire: The slot has been filled by Jeff Davison, who had most recently been CFO at RightNow Technologies, a publicly traded cloud software company Oracle bought in 2011 for $1.8 billion.

Outbrain’s press release announcing the hire certainly gives you the impression Galai thinks this could be a step toward a public filing:

Outbrain Appoints Jeff Davison as Chief Financial Officer
Key Hire Brings 25 Years of Financial Experience Overseeing Millions in Revenue at Both Public and Private Companies

New York, NY, September 10, 2013 — Outbrain, the leading content discovery platform, today announced that Jeff Davison has joined the company as Chief Financial Officer. Jeff most recently served as Chief Financial Officer at RightNow Technologies, a leading global provider of customer experience software that was acquired by Oracle. As CFO based in New York City, Jeff will oversee Outbrain’s finance operations and assist in managing Outbrain’s accelerated global growth while reporting to CEO Yaron Galai.

“In recent years, Outbrain has evolved from a start-up into one of the most trusted partners for leading brands and publishers seeking to maximize their exposure and diversify their revenue,” said Outbrain CEO Yaron Galai. “Jeff is joining the company at a pivotal moment in our growth, and his deep experience at both public and private companies make him an ideal choice to further cement our reputation as a leader in the content marketing space.”

Jeff is a seasoned financial executive who brings more than 25 years of experience working at both public and private companies to his role at Outbrain. In his twelve years at RightNow Technologies, Jeff oversaw the company’s annual revenues of $227M and played a key role in building the company from a privately held company through the IPO process and ultimately through a $1.8B acquisition by Oracle. Prior to RightNow, Jeff was the controller for Powerhouse Technologies, a multi-national, publicly held, technology and manufacturing company with more than $200 million in revenues and approximately 1,800 employees. Early in his career, Jeff held auditing and accounting positions with PacifiCorp and KPMG.

“It’s clear that Yaron and his team are committed to building a viable business for the long-term, and that’s what really attracted me to this role,” said Davison. “Outbrain has been a true pioneer in the content marketing space, and they are helping to set the tone for a rapidly growing industry. I’m looking forward to helping this company realize its full potential and make a name for itself as one of the great tech success stories.”


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik