Content (Recommendation) Doesn’t Come Cheap: Outbrain Raises Another $35 Million

Published on December 14, 2011
by Peter Kafka

You know those “recommended” links at the bottom of this post? Turns out that’s a huge business.

At least it should be, based on the $35 million that investors just plowed into Outbrain, the content recommendation engine that works with AllThingsD and lots of other publishers. Index Ventures led the round, joining existing investors Carmel and Lightspeed; the New York-based company has raised $64 million to date.

Outbrain makes money helping funnel 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 (again, like AllThingsD) also benefit, because Outbrain provides recommendations for other stories that will keep readers on the original site.

Like most of the Web, this is a business that’s supposed to work at scale, and Outbrain says it has that now, generating 200 million clicks a month. Earlier this year, Outbrain bought former rival Sphere from AOL.

(Image courtesy of Shutterstock/The Bezz)

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