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Ten years ago today, my business partners and I sold Applied Semantics to Google. At the time, it was Google’s largest acquisition to date. In the following years we worked together with our new family at Google to grow AdSense into a multibillion-dollar business.

Building Applied Semantics was a roller-coaster four-year process, and the founding team and I learned a great deal during that time. As the anniversary of the acquisition approached, I had been reflecting on lessons learned during the experience. Today, a decade later, I would like to share these lessons with others in the hope that they might find something useful to carry them through both the good times and the not so good — because, eventually, you come out on the other side, oftentimes with a new perspective.

Focus on hiring passionate, hard-working, smart people. Experience is highly overrated.
None of the founding team at Applied Semantics (formerly Oingo) had any startup experience. We didn’t have an MBA among us. None of our parents were business people. Not only did we not have any advisers, we didn’t even really know what advisers were, though many people around us told us that we needed their advice. We had a very limited business network. What we did have was intelligence, creativity and a very strong determination to succeed.

Don’t get too stuck on an idea. Pivot quickly. For most companies, it will be quite clear when and if it’s working.
The original idea of Oingo was to build a Yahoo-like directory of websites which would be run by a network of freelancers competing for the right to build portions of the directory. During the spring of 1999 we worked hard to build a prototype, but soon found a competing product called DMOZ, which was later acquired by Netscape. We tried another three ideas: Oingo Free Search, DomainSense and DomainAppraise, before we finally got to building and releasing AdSense in December 2000.

Several large portals beta tested the product, though none of them were willing to license it. AdSense sat on a shelf for two full years as we launched another two products, DomainPark and Error Page Assistant. In late 2002, we successfully relaunched AdSense — our eighth product launch.

Spend your funding like it’s your own money, and assume it’s the last dollar you may ever raise.
We purchased computers without sound cards because it saved us $20 each. We worked out of our house until we had 20 people working for the company (and at least eight of us living there). We never had a dining room or a living room, and we lost our TV room to a server farm soon after moving in. We only vacated the house because we were served with a landlord eviction as well as a city ordinance that said we had to vacate the property immediately. My father, who is a Ph.D.-educated university professor, painted our first office to save us money. We all took 50-percent-plus pay cuts from previous jobs to keep our burn rate low. We squeezed each dollar in a bubbly time when some startups were throwing parties which cost more than an entire year’s budget for us. We were within 30 days of running out of money at three separate times within our company’s history. There is no doubt that being frugal allowed us to simply survive.

The only thing you can control is where your company is headed. Keep your focus sharp, while avoiding the tendency to bank on an exit.
Six months into the company’s history, we were approached by a large public company to be acquired, and we were very excited about the prospects of working with this company. That deal didn’t go through, and it was disappointing for the team. Three months later, an even larger public company offered to acquire us, and we got closer on terms this time. We got so excited about this deal that for a week we were more focused on the potential acquisition than our own vision. That transaction also fell through. Over the next three years, four other companies would make overtures to acquire us. Over time, we learned not to give too much thought toward a potential acquisition. We learned to focus on creating great products first — an acquisition was secondary. Google was the seventh company to suggest buying Applied Semantics in those four years.

Forgive yourself. You are doing the best that you know how. Things will get better and they will get worse, repeatedly. So get used to that.
We made mistakes along the way. Some painful decisions set us back. We grew too quickly, and it’s still disheartening to think of the friends we said goodbye to during two different rounds of layoffs. We didn’t always trust our own instincts. A decade ago, it wasn’t typical for entrepreneurs in their twenties to be raising large funding rounds, and we were convinced to follow a new leadership that didn’t always embrace our core values. For a time, we started hiring differently, spending differently and managing differently.

Each of the founders risked a great deal in founding the company, but nobody more so than my brother Gil, who put his entire life savings into the company. At times, when things looked grim, it was easy to look back and criticize our mistakes, to think, “What if we made a different decision? What if we had hired a different person? What if we would have built a different product?” If I could say only one thing to my 26-year-old self, it would be this: Even though it feels painful right now, experiencing and working through each of these challenges will ultimately make you a stronger person and your company a stronger business.

Eytan Elbaz is the co-founder and chief strategy officer of Scopely, a next-generation mobile entertainment network. Scopely’s investors include New Enterprises Associates (NEA), the Chernin Group, Anthem Venture Partners, Greycroft Partners and Sands Capital Ventures, among others.

Hello, and happy Read In the Bathtub Day! (AllThingsD takes no responsibility for any damage to your electronics caused by reading this post in the bathtub.)

Here are our top 10 stories from the week of 2/4:

1.) Coming Soon to Yahoo: Ads From Google

2.) Twitter Got Hacked. Expect More Companies to Follow.

3.) Surface Pro: Hefty Tablet Is a Laptop Lightweight

4.) A Tasty Little Slice of Geek History: PBS’s “Silicon Valley” (Video)

5.) Samsung’s Super Bowl Ad Leaves Apple Alone

6.) In One Fell Swoop, Facebook Glitch Deep-Sixes the Web

7.) BlackBerry Z10 Off to a Strong Start in U.K.

8.) Why Twitter Is Buying Bluefin — And Why Bluefin Is Selling [Sidebar: Bluefin will also be presenting at D: Dive Into Media next week.]

9.) Salesforce Just Made Another Quiet Acquisition

10.) Nudged by Apple, Twitter’s Porn Saga Ends in a Raw Deal for Vine

For more of the week in review, please follow us on Facebook and Twitter.

Maybe they worked something out, after all: Sources say Google is set to begin running some of its AdSense display ads on Yahoo sites, and will become one of several ad networks Yahoo uses to fill some of its pages.

That means that the two companies will have a relationship similar to the one that Google has with publishers all over the Web: They give Google access to some of their unsold inventory, and Google inserts small ads it runs on behalf of its advertisers.

Last year, Google and Yahoo had lengthy discussions about a more involved ad tie up, including a scenario where Yahoo would essentially hand over its ad serving operations for all of its lower-priced ads directly to Google.

Those talks seemed to have petered out after interim CEO Ross Levinsohn was replaced by Marissa Mayer. But it’s worth noting that since then Mayer has hired former Google ad executive Henrique De Castro as her chief operating officer.

I’ve asked Google and Yahoo for comment. (Update: Here’s a blog post from Yahoo that confirms the move. Oddly, it has a publication time of 2:02 pm, which I assume is Pacific time, but is also in the future.)

It’s worth speculating whether the AdSense ads will lead to something bigger: Right now, Yahoo has a long-term deal with Microsoft to handle its large search ad business. And Mayer has publicly discussed her disappointment with the way that alliance has worked for Yahoo.

On the other hand, any truly significant tie-up between Yahoo and Google would certainly undergo a whole lot of regulatory scrutiny. Presumably the two companies think what they’re doing now won’t cause any problems in Washington or Brussels.

The social giant is putting the brakes on a test it launched earlier this year that let it place its own ads on other developer’s mobile apps.

And while it has also been talking to publishers about running Facebook ads on their mobile Web sites, sources say those discussions have now been back-burnered as well.

The upshot is that plans to launch the equivalent of Google’s AdSense network, which has generated significant income for the search giant, won’t be showing up in the next few months.

Facebook announced in September that it would run its ads on third-party apps. But those efforts will end this month, says spokesman Brandon McCormick.

Here’s his statement, via email: “We are pausing our mobile ads test off of Facebook. While the results we have seen and the feedback from partners has been positive, our focus is on scaling ads in mobile news feed before ads off of Facebook. We have learned a lot from this test that will be useful in the future.”

Facebook executives, led by business development director David Fisch, have also been talking to major publishers this fall about running Facebook ads on their Web sites, with an emphasis on mobile Web sites. McCormick wouldn’t comment on those discussions, but people familiar with the talks say those conversations have also paused.

The major problem for both Facebook and its potential partners, sources said, is concern that Facebook isn’t ready to deliver ads on external sites that produce significant value for either the network or its partners. That’s at least in part a reflection of the fact that the ads on Facebook’s own site still command relatively low rates.

In the past, other ad networks, including Google, have gotten traction by guaranteeing publishers a certain amount of revenue, regardless of their ads’ performance. But sources say Facebook hasn’t proposed that yet. Instead, the company has discussed a “generous” revenue split, says a publisher who has talked to Facebook about running the company’s ads.

Facebook-watchers have assumed for years that the company would eventually launch an ad network that would use the data the company collects on its 1 billion users.

And one day they will probably be right. In addition to the mobile app ads, Facebook has also run its ads on Zynga.com, a move the company also described as a test. And last month it made changes in its terms of service that observers predicted would also lead to an external ad network.

Facebook is deep in talks to acquire Microsoft’s Atlas ad tech platform, which might also help launch a network one day, and is kicking the tires on other ad tech buys as well; sources said it has looked at “media intelligence platform” Aggregate Knowledge.

The latest crop of products slated for extinction includes AdSense for RSS news feeds, reward “badges” in Google News and a service that let people upload their own photo to use as a background for Google.com searches. Google also is tweaking how much storage it allots to both free and paid Google Drive accounts.

In the past, users could get 5GB on the storage service and another 1GB for Picasa photos. Now both will come from the same account.

Leaving aside the question of whether late September qualifies as spring cleaning, the regular pruning of less popular products would seem to allow the company an opportunity to make sure it doesn’t get spread too thin.

Google said that with the latest list, it will have gotten rid of some 60 services since the cleaning started last fall. Products that have gotten the ax over the last year include iGoogle, Google Desktop and Fast Flip.

“Technology offers so many opportunities to help improve users’ lives,” Google said in its blog post announcing the changes. “This means it is really important to focus or we end up doing too much with too little impact.”

“Advertising is based on one thing: Happiness. And you know what happiness is? Happiness is the smell of a new car. It’s freedom from fear. It’s a billboard on the side of the road that screams with reassurance that whatever you’re doing … It’s okay. You are okay.”

Don Draper, “Mad Men,” Season 1, “Smoke Gets In Your Eyes”

I wonder what Don Draper would think today when the 23-year-old digital media buying whiz quips back, “Maybe, but let’s load it up into the system, along with 5,000 other versions of copy, and measure how many Facebook ‘Likes’ it drives within our target demo.”

I love the “Mad Men” version of the ad business. The storytelling. The simplicity. The glasses of scotch at 10 am. But these days in digital, it feels like the Math Men media buyers (with their terabytes of data) are taking over for the Mad Men creatives. It may not make for great TV drama, but they’ve got the performance data to prove that it’s their turn in the driver’s seat.

For years, digital ads were bought and sold by young media buyers from ad agencies and smooth salesmen from online publishers and networks, sealed over the modern version of the “three-martini lunch.” But with the steady advancement in online advertising technology over the last ten years, the geeks — I mean the Math Men — have gained the upper hand in determining how to spend these digital marketing dollars. Today, ad buying and selling is automated across nearly every digital channel, driven by complex algorithms crunching terabytes of data, all employed to meet rigorous ROI objectives — typically measured by new customer acquisition, profit margin, or revenues.

It all started in search, where Overture introduced (and Google perfected) a keyword ad marketplace for search pages. We take that marketer proposition for granted now, but it was heretical at the time — only pay us when a user clicks on your ad (versus every time we show your ad), and you decide how much to pay for that click (versus the same price for every advertiser). And sophisticated marketers took full advantage by leveraging technology platforms from Math Men companies like Efficient Frontier to maximize the efficiency of their search ad spend across millions of keywords, bids and text ad copy.

Since then, several major advances in advertising technology have further enabled the Math Men:

• Six years ago, Right Media introduced the first ad exchange for display ads, enabling the Math Men and their algorithms to buy and sell banner ads and skyscrapers across the Web. Google subsequently perfected the display exchange via their DoubleClick acquisition as well.
• Three years ago, Blue Kai introduced the first ad targeting-data marketplace, enabling the Math Men to leverage anonymous audience targeting data to further enhance marketers’ campaign performance.
• A year ago, Facebook launched its own ad platform API to enable Math Men and their algorithms to bid for Facebook ads based on user attributes. It seems likely that Facebook will eventually extend its monetization platform to third-party publishers, similar to what Google did with AdSense, as Facebook already has a strong distribution foothold via Facebook Connect.

It feels like we are witnessing the tipping point in digital media buying. Measured by dollars or by impressions, greater than 50 percent of online advertising is bought via APIs today (granted, most of this is still search). In a few years, I believe that 90 percent of all digital ad impressions, and more than 75 percent of digital ad dollars, will be bought and sold programmatically.

As we witnessed with search marketing, once a) marketers get a taste of the increased spend efficiency offered by these emerging platforms, and b) these platforms (and the associated marketer tools) become sufficiently easy to use, the dollars will flow, and quickly. The Math Men at Efficient Frontier are leveraging these display, data and social platforms to deliver superior ad spend performance for marketers across all digital channels today. It’s no longer just about search.

And the Mad Men are taking note. In the last few years, the ad agency holding companies have rolled out their own technology-driven digital ad “trading desks” to help their clients take advantage of these ad trading platforms. I wonder if they’ve replaced the scotch in the mini bars with the Math Men’s drink of choice, Red Bull.

Chris Moore is a partner with Redpoint Ventures and has been enabling the digital Math Men with investments in Efficient Frontier, Right Media, Blue Kai, Auditude, Inadco, Extole, Intent Media and eBureau. Follow him on Twitter @Redpointvc and @Moorski.

Okay … And?

This is a nice “+” in Google terms, but it’s not earthshaking. There are three players here — the artist, the middleman and Google.

The artist now has a chance to sell direct to fans on Google Music and keep 70 percent of retail. This would be unprecedented only if Amazon MP3 didn’t already offer this via their CreateSpace entity, and if TuneCore and about a dozen other services didn’t offer this already, via their own platforms for iTunes and other digital music retailers. All cost $25 or more upfront, which means an artist needs to sell between 37-75 songs at 99 cents retail to recoup — except for Amazon, which is free.

It’s important to distinguish here between signed and unsigned artists. Nothing about Google Music’s launch voids existing signed recording contracts. Lady Gaga or Adele can’t void their recording contracts and sell direct via Google Music; neither can your favorite indie band that has its own (indie) label deal, like Barsuk.

Lots of folks are going on about major label payouts ($0.08-$0.14 per download, vs. $0.70 direct from retailers), as if all artists will benefit. But signed artists have no out — on iTunes, Amazon or Google.

So what about the “unsigned”? They fall into two categories — the “unencumbered,” like NIN and Pomplamoose, who have demand, options and the ability to use their music as they choose. The other group are the “unsupported.” It doesn’t matter who I name, you won’t have heard of them. This artist has no presence, no support, no marketing and no financial backing. They can use the music however they choose, too, but they don’t have demand. The Artist Hub is another place they can spend 15 or 20 minutes and $25 online hoping to sell to fans.

So let’s say an “unsigned” DIY artist wants to generate revenue on the top six digital retailers. Here’s what they’d have to spend to get their stuff there:

1. iTunes, Amazon, Spotify: $50 via TuneCore
2. YouTube: No distributor offers this on a flat-fee basis, so let’s guesstimate this will cost $25 a year, based on average $1 RPM and 30,000 video views
3. Deezer (What? Never heard of them? Huuuge in France); CD Baby: $59 plus nine percent (it’s a given you’re gonna need a barcode)
4. Google Music: The aforementioned $25

Total: $159. Honestly, not that much money if you’re a professional artist. And if an artist isn’t recouping that in sales each year, then he is a hobbyist.

As Seinfeld said, “nothing wrong with that.” It’s just not a business. And if it’s not a business, why spend hours researching and debating distribution options to save a couple dollars? Spend that time making the music you love.

All artists need teams; all teams cost money. Today, there are just a lot more ways to manage that money: In the form of assigning copyrights via a traditional “deal,” by paying agency consulting fees, by hiring employees and by offering a distribution percentage.

One or many of those options can arise, and it is tricky to determine the most cost-effective one. Here’s a quick guide to determine whether a DIY distribution service is cost-effective for a music professional:

Do you or someone you know closely have a personal relationship with editors at the major digital retailers? Do you want to talk to them weekly?

• If yes, then DIY distribution is for you.
• If no, then consider the costs of hiring a sales team and employees, or of spending weeks of your life on marketing and promotion, compared to the relative advantages of a distribution percentage or label deal. Distributors and labels can leverage their catalog bulk in an artist’s favor when releasing new music.

So, what about the labels, the middlemen that sit between artists and retailers? Will Google Music’s Artist Hub impact them? No.

1. The middleman has already secured the rights, encoded the assets and prepped the metadata of millions of songs — these deals exist. Even if you are using TuneCore and are free and clear, it’s probably more economical to wait for them to offer delivery to Google Music, then pay again.
2. The middleman already incurs the customer support costs, the accounting costs and the marketing costs. Most artists want or need marketing and hands-on support. The Artist Hub will not likely provide that, certainly not in promoting, and artists will look to outside agencies, labels and distributors that offer access.
3. The middleman, presumably, represents that the rights are cleared and clean — no messy copyright claims to be filed against the retailer by aggrieved parties.
4. Artists could do this work themselves. But is an artist’s time best spent managing dozens of digital retail platforms, or making and performing music?

But let’s be clear: Google Music and the Artist Hub is a good move for Google. It helps them:

1. Build up Google+ using consumers and bands to build trust and engagement.
2. Build up Google checkout and card gateway. If you’ve paid $25 to Google to sign up, now maybe you’ll buy something from them. And they’re already used to paying out tons of small cash increments via AdSense — not an accounting hassle for them to assume.
3. Challenge their newest direct competitor — Amazon’s own entertainment marketplace, available online — on Kindle Fire, and presumably on next year’s locked-down, Android-powered smartphone.

Most important, Google Music is awesome for Android.

Ben Patterson is the founder and President of DashGo, Inc., www.dashgo.com, a digital content distribution and marketing engine for labels, podcasters and artists.

Everybody wants in: The oddball start-up, substantial media companies like the New York Times, even AT&T and Amazon.

And it won’t stop there. No really, trust me, it won’t.

The next crop of companies that you may start getting offers from could include your bank, or even that hotel chain or airline you use most frequently.

This is through a nifty invention called card-linked offers, which honestly isn’t all that new at all. It works very similarly to how your credit card company offers you discounts on rental cars or hotel rooms. But now it’s becoming an ad network of sorts that can accept offers from all kinds and can take place with any brand.

I’ve written about this before, and to be sure, there’s no lack of venture-backed companies all hoping this is the next Groupon-killer. Some of the participants in the space include BillShrink, FreeMonee, Clovr Media, Offermatic and Cardlytics.

In this case, I talked to Lexington, Mass.-based Cartera Commerce.

The company, which has 165 employees and has raised $30 million, is announcing a partnership today with InterContinental Hotels Group to allow hotel guests to earn rewards points while doing everyday shopping.

If users link a credit card to IHG’s loyalty program and make purchases at participating retailers with that card, they will earn points that can be redeemed at such InterContinental Hotel brands as Holiday Inn, Hotel Indigo and Crowne Plaza.

The Aite Group estimates that by 2015, 460 million consumers will have signed up for incentive programs such as these, totaling about $1.7 billion in annual revenue for card issuers.

Tom Beecher, Cartera’s president and CEO, walks me through a PowerPoint presentation, comparing how it is better than Groupon’s business, and how it compares with Google.

On one side of the equation, he explains, there are the publishers, and on the other side there are advertisers and brands. That’s sort of like Google’s AdWords and AdSense.

In the same way, Cartera works with advertisers and also the banks, airlines, hotel chains, or other similar services that have access to the consumer. Some of its customers include Chase, Wells Fargo, American Airlines, Best Buy and USAA.

Because consumers link a credit card to these offers, these are considered very well-targeted ads. Cartera is able to collect information at the aggregate level to find out about spending habits. Advertisers can selectively make offers to consumers who shop at their competitors, but not current customers who already visit regularly. That helps retailers acquire new customers and not just give discounts to already loyal patrons.

So far, Cartera says it has processed $1 billion in transactions on its platform, and is seeing conversion rates from 20 to 40 percent.

Even though these offers are not as well recognized as Groupon, they are typically easier to redeem.

The offers don’t need to be purchased in advance or printed out. Consumers automatically get the discount when they use the same credit card that received the offer. The offers can appear in a number of formats, from a Web site to an email or a line item within their bank statement.

Photo Credit: Images_of_Money.

Pixazza is dead. Long live Luminate.

Well, from a brand perspective, at least, as the image advertising start-up changes to an easier-to-say name and also launches a new platform for image applications.

The Mountain View, Calif.-based start-up — which is backed by Google Ventures, CMEA Ventures, August Capital, Foundation Capital and Shasta Ventures, as well as by angel investors Ron Conway, Gideon Yu and Maynard Webb — aims to do for Web photos what the search giant did for text.

The new name for the company that called itself “AdSense for images” pretty much speaks for itself.

In addition to Luminate’s previous sharing, commerce and advertising apps, the company will offer information, navigation and public service apps, which you can see below

Luminate says its interactive images are viewed three billion times per month.

Here’s the official press release for the name change, as well as the image app platform:

PIXAZZA, INC. REBRANDS ITSELF AS LUMINATE, INC.

New Name Better Reflects Vision For Making All Online Images Interactive

Company Enables Images at Rate of 30 Billion Image Views per Year

MOUNTAIN VIEW, CA — July 27, 2011 — Pixazza Inc., the worldwide leader in making images interactive, today announced its new company name — Luminate, Inc. With its new services and the introduction of a groundbreaking new platform (see separate release: Luminate Launches World’s First Platform for Image Apps), the company opted to rebrand itself with a name that better reflects its bold vision of making every image interactive.

“We started the company to change the web by offering information relevant to online images, engaging consumers in a novel way while offering advertisers and publishers additional revenue streams,” said Bob Lisbonne, CEO of Luminate. “We’ve since developed the technology and scale to enable images to do even more. Moving forward as Luminate, we will continue to elevate the role of the image and dramatically improve the web experience.”

Rapidly scaling to accommodate the new demand for interactive images, Luminate now reaches more than 150 million unique visitors per month.

Its publisher network also has grown to more than 4,000 publishers, and the company enables images at a rate of 30 billion image views per year. This is significant because just as page views are commonly used to measure web site traffic, Luminate tracks image views, which count the number of times a web publisher serves up a Luminate-enabled image. It is a clear marker of audience interest.

The name change and announcement of the Luminate™ platform for image apps, comes on the heels of an innovative partnership with Hearst Digital Media. The company’s explosive momentum has also been a draw for top talent including CRO and head of publisher development, Chas Edwards, formerly of Digg; Terry Murphy, CFO, formerly of LiveOps. Luminate also added Elliot Schrage, the Vice President of Global Communications, Marketing and Public Policy at Facebook, as a strategic advisor to the Luminate Board.

Please visit www.luminate.com to learn more about how Luminate is changing the way consumers, publishers and advertisers use and interact with online images.

LUMINATE UNVEILS WORLD’S FIRST PLATFORM FOR IMAGE APPLICATIONS

Company Brings Images to Life with Image Apps Designed to Create Rich Consumer Experience

Luminate Transforms Images Into a Canvas to Shop, Share, Comment, Examine, Curate, Search and Socialize

MOUNTAIN VIEW, CA — July 27, 2011, Luminate, Inc., formerly known as Pixazza, Inc., today unveiled a groundbreaking new platform for image applications. For the first time ever, consumers can launch applications within the individual images on their favorite websites.

With this exciting new platform, Luminate opens a new world of image apps, breaking down a wall and bringing flat, static images to life. Online images become more than visual stimuli — they become a gateway for accessing rich and relevant content across the web. The apps available on the Luminate™ platform will allow consumers not only to conduct their favorite everyday online activities such as shopping, sharing, commenting and navigating directly from the images, but can also facilitate entirely new services made possible by the development of apps specifically for images.

“Image apps transform images from static pixels into interactive experiences,” said Luminate CEO Bob Lisbonne. “Just as phones evolved from merely voice calls to smartphones with apps, now consumers can enjoy relevant apps inside every online image. The explosive use of images fueled by mobile, social, and cloud computing trends sets the stage for Luminate’s pioneering new image apps platform.”

How It Works:

When a consumer sees the Luminate icon in the corner of an image, it indicates that the image is interactive. Consumers simply mouse into the image and choose from a variety of image apps. They can easily share an image or specific points within an image with their friends, discover statistics about their favorite athletes, see where to purchase similar products to those featured in a photo, uncover the latest information about a particular event, reveal geo tag or Wikipedia information, read more content about the people or places featured in an image, listen to music or see a movie trailer related to an image.

Image Applications:

Image applications will span a number of key categories including: Commerce, Information, Social, Organization, Advertising, Navigation, Public Service, and Presentation. Luminate’s platform currently offers such applications as: unique Twitter Share, Facebook Share, and Email Share apps that give consumers the power to select precisely what they want inside an image and share it with others; an information app called Annotation that allows publishers to quickly and easily tag any spot within an image and add information relevant to that image; a commerce app called Products, which enables consumers to mouse over the image and interact with tags on the picture; and an Advertising app that offers publishers a seamless way to place relevant advertisements within an image.

Luminate plans to roll out new applications frequently to address the varying needs of consumers, publishers and advertisers. Its platform is designed to ultimately enable the development of any conceivable app that is relevant to a particular image. It is this capability that will help define the future of web images.

This cutting edge platform for image apps comes from the company that pioneered the use of images as real estate for delivering ecommerce and advertising three years ago as Pixazza, Inc. With the introduction of the new platform, the company has been rebranded as Luminate, Inc. (see separate release: Pixazza, Inc. Rebrands itself as Luminate, Inc.) as it takes the next step in executing its vision to make every image on the web interactive.

The Luminate Approach:

What makes the Luminate platform so compelling is its breakthrough ability to link images with applications and content beyond the website where the image is viewed. To create the best possible consumer experience, Luminate focuses on all of the data relevant to a particular image or part of an image. Luminate has long employed a unique recognition system that combines visual algorithms with human crowdsourcing. With its new platform, the company has multiplied the sources and ways to uncover information about images. In addition to the data derived from its team of experts, the company can avail itself of information from end users and publishers with the goal of creating a richer, more immersive experience for the end user. Luminate has the most sophisticated system in the industry for tagging relevant content.

“The reason images remained stagnant for so long is because it is remarkably difficult to contextualize their composition and link them to other pieces of relevant content across the Internet,” said James Everingham, CTO of Luminate.

“We were the first to develop the technology to overcome these complexities, turning images into an even more valuable asset. With our platform and the introduction of image apps, we believe that the entire Internet can become connected in a more meaningful way.”

To learn more about how Luminate is changing the way consumers interact with images, please visit www.luminate.com.

Margo Georgiadis (pictured here), VP of Global Sales Operations at Google, will be COO of Groupon, Google confirmed.

She is currently located in Chicago, where the social buying site is headquartered.

A Google spokesman confirmed the move by Georgiadis, while Groupon–which specifically denied a query about her appointment that BoomTown made Tuesday–dithered.

In a statement, her boss, SVP and Chief Business Officer Nikesh Arora said:

“I’m grateful for all that Margo has done for our team over the past two years. We will miss her, but we’re also very excited that she’s joining a terrific company and a great partner for Google.”

Besides COO, I will officially bestow the title of “Chief Cat Wrangler” on Georgiadis, for the massive organizational job ahead for her at the notoriously chaotic start-up. (As evidenced by Google being the company confirming a major Groupon hire.)

Still, Groupon’s growth had been stunning. It now has thousands of employees and has already washed out one COO, former Yahoo exec Rob Solomon, whose departure was reported here.

It has also turned down a $6 billion acquisition offer from Google, raised a badillion dollars in venture funding from tech’s top investors and also is prepping an IPO valuing the company at upwards of $15 billion.

Phew!

Georgiadis must bring calm to this perfect storm.

Because of her solid resume (see below) and quiet demeanor, I had included her in a list of candidates several weeks ago and had queried the social buying company about her specifically this week.

In fact, when I asked for a comment if Georgiadis was hired on Tuesday, a Groupon spokeswoman said: “This would be news to me. Nothing to announce yet.”

At the time, Google had the class to simply say “no comment.”

(Lesson learned!)

Crain’s Chicago Business’ John Pletz first posted on Georgiadis’ hiring earlier today.

In any case, Georgiadis is just the kind of candidate that Groupon has been looking for–a competent and experienced sales and operations exec who would not overshadow its quirky CEO and co-founder Andrew Mason.

As I wrote two weeks ago:

Lastly, and perhaps most important, the Groupon COO candidate is going to have to accept that the role will not be a CEO-in-waiting, either before or after its inevitable IPO in the next year.

While I have received several tips that co-founder and CEO Andrew Mason might not stay its principal exec, extensive checking with sources inside and outside the company indicate that such a move is highly unlikely.

“Andrew is beloved to the board, by investors and, most of all, by employees,” said one source. “He’s not going anywhere.”

Indeed, Mason has a close working relationship with co-founder Brad Keywell, as well as Groupon co-founder and Chairman Eric Lefkofsky.

In fact, despite other business interests, Lefkofsky has been very involved in all key decisions with Mason.

That job, presumably, would fall to the new COO, which Groupon should be hiring sooner rather than later.

“Groupon needs a world-class COO, who can manage hyper-growth, but also who knows that a No. 2 stays in the background while doing it,” said another source. “That’s a tall order.”

Groupon has looked at a number of top execs, most specificially at former DoubleClick and Google exec David Rosenblatt. Sources said the high-profile exec did not want to play second fiddle to Mason or move to Chicago.

That’s moot now. Here is Georgiadis’ bio at the Silicon Valley search giant, which shows why Groupon picked her:

Georgiadis is responsible for driving Google’s sales operations and strategies across regions, channels and products as well as leading the sales technology teams which enable the successful commercialization of Google’s products (e.g., AdWords, AdSense, display and mobile ads) with advertisers and publishers.

She also leads the company’s local and commerce businesses, working to extend services like Checkout, Google Places and commerce search to small and large businesses alike.

Before joining Google, Margo was a principal in Synetro Capital LLC, a private investment firm based in Chicago. She also spent five years as the executive vice president of card products and chief marketing officer of Discover Financial Services where she led a radical turnaround of business performance and revitalized its rewards leadership with award-winning new products, customer experience and marketing. Prior to Discover, Margo was a partner at McKinsey and Company for 15 years in London and Chicago. She was a leader in the firm’s marketing and retail practices, and also co-founded and led the customer acquisition and management and retail marketing practices.

She has a bachelor’s degree in economics from Harvard College and an MBA from Harvard Business School.

Tonight, Demand Media–in reaction to a new study showing that its flagship eHow site had now gotten much more negatively impacted by Google’s rejiggering of its search algorithm than previously–released a statement and blog post about the tempest.

In it, the Santa Monica, Calif.-based company reaffirmed its outlook for fiscal year 2011, noting, in part:

“Certain third parties that have published reports attempting to estimate the effect of recent search engine algorithm changes made by Google on traffic to the Company’s owned and operated websites have significantly overstated the negative impact of those changes on traffic to eHow.com, as compared to the Company’s directly measured internal data.”

The company, though, declined to give specific details about the impact of Google’s attempt to clean up its search results by tweaking its algorithms to cut out poorly made material from so-called “content farms.”

While others had apparently been initially impacted by Google’s first foray, such as Yahoo’s Associated Content unit, Demand had not been.

That is, until a recent Sistrix poll (see chart below), showing eHow has now been hurt badly by even more Google search changes, codenamed Panda.

While acknowledging a decline in search traffic on eHow from the Google changes, Demand said the Sistrix data was way off.

In a blog post, Larry Fitzgibbon, Demand’s EVP of Media and Operations, wrote, in part:

“However, recent third-party reports attempting to estimate the impact to our search driven traffic, including one projecting a 2/3rds decline in eHow.com traffic, are so significantly overstated that we decided to comment.”

When Google began making changes to its search formula, Demand CEO Richard Rosenblatt told MediaMemo’s Peter Kafka in an interview that its relationship with Google was all sunshine and roses.

When asked how its relationship with Google was, Rosenblatt said:

“This is why our partnership with Google makes sense. 1) We help them fill the gaps in their index, where they don’t have quality content. 2) We’re the largest supplier of all video to YouTube, over two billion views and 3) we’re a large AdSense partner. So our relationship is synergistic, and it’s a great partnership. And it’s a partnership that we’re excited to continue to expand.”

It will be interesting to see how he feels now.

Here are both Demand’s official press release and blog below:

Demand Media Reaffirms Outlook for Fiscal Year 2011

SANTA MONICA, Calif., Apr 18, 2011 (BUSINESS WIRE)

Demand Media, Inc. (NYSE: DMD), a leading content and social media company, announced today that it is reaffirming its financial outlook for fiscal year 2011 that it previously provided on February 22, 2011.

Certain third parties that have published reports attempting to estimate the effect of recent search engine algorithm changes made by Google on traffic to the Company’s owned and operated websites have significantly overstated the negative impact of those changes on traffic to eHow.com, as compared to the Company’s directly measured internal data. Recent search engine algorithm changes have negatively impacted search driven traffic to some of our websites, including eHow.com, resulting in moderately lower year-to-date page view growth for the Company’s owned and operated Content & Media properties compared to page view growth rates before the algorithm changes. Nevertheless, the Company currently expects that its year-over-year page view growth across its owned and operated Content & Media properties in the second quarter of 2011 will be comparable to, or greater than, the year-over-year page view growth achieved in the second quarter of 2010.

As previously announced, the Company will report its first quarter 2011 financial results on May 5, 2011. The Company will host a conference call to discuss the results at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). A live webcast of the conference call will also be available and can be accessed within the investor relations section of Demand Media’s corporate website at ir.demandmedia.com.

Another Statement About Search Engine Algorithm Changes

Posted by larry fitzgibbon at 4/17/2011 10:05 PM PDT

It’s hard to imagine a company more focused on the connection between consumers and content than Demand Media. That point of connection gives us the opportunity to inform, engage and serve the consumer. And it’s where trusted relationships start. So, how our content reaches the consumer–whether it’s through direct visits, social media referrals, apps or search–continues to be top of mind with everyone at the company. Consumers are connecting with more content than ever before as social media and mobile access have emerged to play huge roles that didn’t even exist just a few years ago. And search engines, of course, continue to play an integral part in content discovery and have been hard at work improving their products to create the best consumer experiences possible.

As I discussed on my last blog post, Google recently made significant search algorithm changes in an update dubbed Panda that has rolled out in various capacities from late February thru mid-April. With respect to Panda’s mid-April update, some of our properties saw Google search referrals move up while other properties, including our largest property eHow.com, saw these referrals go down.

As I said in my prior post, we generally do not comment or speculate on changes by major search engines, as these changes can happen nearly daily. However, recent third-party reports attempting to estimate the impact to our search driven traffic, including one projecting a 2/3rds decline in eHow.com traffic, are so significantly overstated that we decided to comment. As discussed in our press release issued today, we currently expect that in Q2 2011 our owned and operated Content & Media properties will generate year-over-year page view growth comparable to or greater than the year-over-year page view growth reported for Q2 2010. We have also reaffirmed our calendar year 2011 financial guidance in this press release.

Demand Media has a myriad of impactful sites and many sources of traffic. We are encouraged that the investments we’ve been making in site experience and content quality are making an impact with our consumers. Organic growth in visits from non-search sources to eHow continue to grow rapidly and Cracked.com is now the most visited humor site on the Internet with the majority of its page views coming from direct visits. Improvements have been registered from eHow’s recent redesign and the introduction of new video series leading to significant growth in Facebook likes. Our brand advertisers have also reported encouraging results with their intent-targeted campaigns. Rest assured, just as we have been innovators in building one of the largest online audiences, we are applying that same rigor and intensity to delivering a quality experience for consumers and advertisers.

As a disruptive digital media and technology company, we have been operating in a fast moving environment since the company’s founding five years ago. While change is frequent, one thing is certain–Demand Media is steadfast in our commitment to produce great outcomes for our consumers, advertisers and community of creative professionals. We’re in the trenches listening, learning, adapting and innovating–and we are very excited about the opportunity in front of us. We look forward to providing details on all of these topics and more in our previously announced conference call at 5:00pm (Eastern) May 5th, 2011 to discuss first quarter 2011 financial results.

Larry Fitzgibbon is Demand Media’s EVP of Media and Operations, and manages the company’s rapidly growing network of consumer properties.

BigDoor, which is vying for a leadership position in the so-called gamification space, is announcing a new platform today that acts as an intermediary between publishers and advertisers.

Co-Founder and CEO Keith Smith calls it the equivalent of Google’s AdSense for gamification.

Gamification operates under the premise that people are often motivated by rewards, so integrating game-like tasks into everyday things–like reading the news or watching videos online–will ultimately increase engagement and monetization.

Smith refers to it as turning “lurkers” into “regulars.”

Seattle-based BigDoor builds tools for publishers to make rolling out game play within their online properties easier. Some of its customers include AccuScore.com, DevHub.com and MySportsIQ.

But creating a new AdSense platform is clearly a lofty ambition.

To put it in words the company can understand, the achievement is still far off, and in the near-term it will have to work hard at leveling-up to get there. But in this world, where Zynga has introduced millions of consumers to playing simple games like FarmVille on Facebook–and paying nominal amounts of money for virtual goods–it doesn’t sound too far-fetched.

Along with the platform being announced today, the company is revealing the first of its 20 private beta partners.

Its first publishing partner is UGO.com, a Hearst-owned property aimed at the 18 to 34 year old male audience. The site, which provides daily coverage of videogames, has dedicated a good chunk of its homepage to integrating advertising-based “quests.”

A quest over the weekend gave visitors a chance to interact with the new Universal Pictures comedy, “Your Highness,” starring Natalie Portman.

In the quests, visitors must interact with the advertiser’s content in order to earn points. A quest is competed after 11 clicks. Points can be typically redeemed for virtual badges (i.e. bragging rights), but in UGO’s case, it is sending out real patches that they hope will become collector’s items.

With the new platform, Smith is hoping to create a new ad unit called Cost Per Quest. So far, he thinks the ad unit will range between $1 and $2.50 based on the fact that consumers are readily engaging in the quests as if they are content. Early response rates are revealing that 20 to 45 percent of people who begin a quest finish one, he said.

BigDoor plans to provide the platform for free and will take a percentage of the revenue. “We want gamification to be a profit center, not a cost center,” Smith said. “We don’t charge UGO anything. We get paid when they get paid.”

Now that Universal’s promotion of “Your Highness” has run its course, UGO has moved on to offering different quests, including one from AXE, the men’s deodorant body spray.

Founded in June 2009, BigDoor was started by Smith and Jeff Malek, who both previously founded Zango. Also known as 180solutions, the company was associated with spyware and adware, but grew to $50 million from $1 million in revenues over two-and-a-half years.

BigDoor, which is still in its infancy, has raised more than $5 million in two rounds from Founder’s Co-op and Foundry Group, and has 20 employees.

One of BigDoor’s competitors is BadgeVille, which recently partnered with Bluefly, a small publicly held online retailer. Through the relationship, Bluefly is rewarding shoppers who watch videos, create wishlists, write reviews or read blog posts.

Now, the Mountain View, CA, start-up has added someone who might know a thing or two about it. Former Googler Elliot Schrage–who is now Facebook’s global communications, marketing and public policy head–is joining Pixazza’s board as a strategic adviser and observer.

Before joining both the Silicon Valley search giant and social networking powerhouse, Schrage had another thing in common with Pixazza–he also worked at retail behemoth The Gap, one of the companies that uses Pixazza’s technology tools.

“I’m impressed by Bob, Jim and the Pixazza team and delighted to have the chance to work with them,” said Schrage in an email to me.

The Pixazza network now reaches about 85 million unique visitors per month, according to Quantcast.

Essentially, the company lets publishers match and link images of products or places with its network of advertisers, via a single line of code.

When users on that site mouse over the photos, they get rich information about pricing and more, as well as a clickable way to purchase the items.

Here is Lisbonne’s blog post on the Schrage appointment, as well as the video of the interview I did with him recently:

Pixazza Is Now Friends with Elliot Schrage

One of many favorite lines I remember from Netscape’s CEO Jim Barksdale was “smart isn’t what you know, but how fast you learn.” The history of Silicon Valley demonstrates the wisdom of that adage when you consider that no company starts life with perfect knowledge; they all experiment, discover, and iterate rapidly. The best startups not only harness the knowledge of their employees, but look to their investors, advisors, and supporters as well.

Today, we feel particularly fortunate to welcome someone new to the Pixazza fold, a world class executive responsible for helping to expand the reach of two of the Internet’s premier companies. Elliot Schrage has agreed to join our board as a strategic advisor and observer.

Elliot’s current role as vice president of global communications, marketing and public policy at Facebook, coupled with his previous experience as vice president of communications and public affairs at Google, make him an ideal resource as we work to change the way consumers interact with images on the Internet. In an auspicious coincidence, Elliot previously served as the senior vice president of global affairs at The Gap–one of Pixazza’s long time advertisers.

Pixazza is pioneering the use of images as a new canvas for delivering to consumers relevant information, ecommerce, and advertising. We look forward to collaborating with and learning from our new “friend” Elliot.

]]> http://allthingsd.com/20110324/facebook-communications-kingpin-joins-pixazza-board/feed/ 1 http://allthingsd.com/20110322/pixazzas-bob-lisbonne-talks-about-adsense-for-images/ http://allthingsd.com/20110322/pixazzas-bob-lisbonne-talks-about-adsense-for-images/#comments Tue, 22 Mar 2011 19:50:34 +0000 Kara Swisher http://kara.allthingsd.com/?p=41827

Recently, BoomTown took a walk down digital Memory Lane with Bob Lisbonne, CEO of Pixazza, the photo-tagging service that has nicknamed itself “AdSense for images.”

That’s because Lisbonne used to be a big wheel at Netscape Communications, the iconic Internet browser company that truly changed the digital world–before crashing and burning in a very public way.

We talked about the old days, of course, but more about the new days and his business focused on putting all kinds of advertising within online images.

The Mountain View, CA, start-up–which is backed by Google Ventures, CMEA Ventures, August Capital, Foundation Capital and Shasta Ventures, as well as by angel investors Ron Conway, Gideon Yu and Maynard Webb– aims to do for Web photos what the search giant did for text.

At least that’s the hope.

Pixazza is selling itself as a win-win for online publishers–who certainly could use one.

Essentially, the company lets publishers match and link images of products or places with its network of advertisers, via a single line of code.

When users on that site mouse over the photos, they get rich information about pricing and more, as well as a clickable way to purchase the items.

Quite possibly annoying, but Pixazza is growing quickly anyway, with the company claiming 20 billion image views per year and reaching 70 million unique visitors a month on sites deploying its technology.

There are rivals in the space, of course, such as GumGum and Vibrant, but Pixazza does come armed with $18 million in venture funding, as well as that relationship with Google.

Here’s Lisbonne talking about it all in a video interview I did at Pixazza’s Silicon Valley HQ:

]]> http://allthingsd.com/20110322/pixazzas-bob-lisbonne-talks-about-adsense-for-images/feed/ 2 http://allthingsd.com/20110228/yahoos-and-associated-content-founder-luke-beatty-talks-about-googles-content-farm-putsch/ http://allthingsd.com/20110228/yahoos-and-associated-content-founder-luke-beatty-talks-about-googles-content-farm-putsch/#comments Mon, 28 Feb 2011 16:02:32 +0000 Kara Swisher http://kara.allthingsd.com/?p=41090

Yahoo’s Luke Beatty said he is not worried.

“We welcome the change,” he insisted about Google taking aim last Friday at so-called “content farms,” producers of low-quality content that spam up the Web and the search giant’s results. “And we endorse what Google is doing 100 percent.”

That’s ironic, given among those allegedly hit hardest by changing of its famous algorithm–based on early, and perhaps questionable, surveys–is Yahoo’s Associated Content.

But, if true, and traffic at Associated Content–which the Silicon Valley Internet giant bought for $90 million last May–is indeed badly hurt, it’s obviously going to be a problem for Yahoo, which relies on advertising revenue as its core business.

A quick poll by Sistrix, a search engine optimization firm, using one million keywords before and after Google’s changes, showed that Associated Content’s “visibility index”– including keyword and ranking positions ranking and clickthrough rate–was down 93 percent.

So yesterday, Beatty, who founded Associated Content and now works at Yahoo, dialed up BoomTown to talk about what the Google shift will mean to Yahoo.

First off in the wide-ranging interview, he noted, “everything on the Web is changing all the time,” noting that Associated Content used to rely more on the now weakened Digg and RSS for its traffic and distribution.

“Obviously, that has changed and we have still managed to grow,” he said.

Beatty said it is still not clear that the new tweaks in search criteria at Google would mean for Associated Content’s offerings–coming from 400,000 contributors of all kinds.

“Our data will not be reconciled for weeks…but some will be up and some will be down,” he said, adding the overall, “I suspect it will be down, although it’s not accurate by any means in the numbers released so far, since there is no way you can know this early.”

Still, it’s obvious that Google’s latest move has not been not good for Associated Content, although Beatty noted that the Silicon Valley search king is no longer the main source of traffic for Associated Content material.

Instead, that would be the owned-and-operated sites of Yahoo, most of all, and–increasingly–social networking sites such as Facebook.

“When we sold the company, we know that sites of Yahoo itself would be the biggest driver of our growth and that was the plan,” said Beatty. “And, though smaller, social means of distribution are clearly the way people are now finding our content.”

In an email later, Beatty underscored this point:

“Search traffic is not our focus within Yahoo–it hasn’t been for 10
months…traffic sources have changed endlessly over that last six years…search is one, albeit an important one and clearly, [but] now it too is changing and we see the future of our content distribution coming from O&O properties and social networks, as much as anything.”

Still, Beatty said Associated Content will adapt as long as Google does not make its tweaks on a network basis and rather than on a site basis. (Interestingly, that would presumably include Google’s own–and often spammish–Blogger property, which is fueled by its powerful AdSense engine.)

“It appears that changes have been made on an asset-by-asset basis
is good–networkwide cramdown would be inappropriate and uneducated,” he said.

Still, the best way to fight the Google initiative is by delivering higher quality content, which Beatty said was being done at the company via a series of ongoing measures to improve overall submissions.

Those include a Yahoo style guide for content creators, a two-tiered human editor review process, analytical analysis, a featured contributor program and, interesting, an online tutorial process called the Yahoo Contributor Network.

It’s not exactly Harvard University, of course, but Beatty said there is more to come.

“We are committed to supporting and helping our contributors navigate through this and every other change in the crowdsourced content economy,” he said. “We want the best article to get more traffic.”

Of course, with Google’s doubtlessly continuing changes in its criteria for what good content is, presumably, that won’t be Yahoo’s to decide.

]]> http://allthingsd.com/20110228/yahoos-and-associated-content-founder-luke-beatty-talks-about-googles-content-farm-putsch/feed/ 2 http://allthingsd.com/20110216/posterous-goes-bare-shows-us-all-its-stats/ http://allthingsd.com/20110216/posterous-goes-bare-shows-us-all-its-stats/#comments Thu, 17 Feb 2011 07:15:45 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=3688 I like to write about actual numbers, but start-ups are usually reluctant to give them up, preferring to blab about growth percentages and fuzzy feel-good milestones.

The lightweight blogging company Posterous volunteered to open its books recently, coughing up every product stat NetworkEffect asked for during a recent visit to the company’s oversized San Francisco Mission District office situated below a yoga studio whose clientele is way more clompy-footed than I might have thought.

The Posterous team, led by CEO Sachin Agarwal, was pimping its new groups product, launched Dec. 15, that’s kind of like a nice-looking Web interface for an email product like Yahoo Groups, turning messages into blog posts and smoothing photos and other attachments into easily viewable form. Used mostly for private communication (like a neighborhood group or a small business team), the groups tool supports users who participate by email without opening a Posterous account.

First of all, Posterous Groups is still quite small: Posterous has 12.3 million total blogs, and only 134,000 of them are groups. About 3,000 groups are created per day, or about 20 percent of total daily sign-ups.

Overall, Posterous has 9.2 million monthly visitors on its own site and on custom domains, according to Quantcast, which measures the service directly with its permission. That’s up from 6 million in September, but still quite a bit less than competitors like Tumblr and WordPress, which have 59.6 million and 517 million people, respectively.

The new groups product sends a ton of email (with user permission, and with the help of SendGrid): 230,000 messages per day. Half of Posterous group distribution is over email rather than the Web, and 30 percent of users are not registered.

As I mentioned earlier, most groups–76 percent–are private. And a quarter are for corporate groups–an alternative to business collaboration tools like Yammer. Business groups have an average of 15 people, while family groups have about 10.

As for revenue numbers? Negligible. The company is only starting Google AdSense revenue sharing and talking about business accounts.

Posterous has raised about $5 million in funding from investors including Redpoint Ventures, Trinity Ventures, SV Angel, Founder Collective, Lowercase Capital and Y Combinator.

]]> http://allthingsd.com/20110216/posterous-goes-bare-shows-us-all-its-stats/feed/ 3 http://allthingsd.com/20110211/tweetdeck-finds-a-home-and-30-million-at-ubermedia/ http://allthingsd.com/20110211/tweetdeck-finds-a-home-and-30-million-at-ubermedia/#comments Sat, 12 Feb 2011 04:02:48 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=29687 UberMedia, the holding company that specializes in Twitter-based start-ups, has added its highest-profile company to date: TweetDeck, the biggest Twitter application not owned by Twitter itself.

UberMedia, run by Internet pioneer Bill Gross, will pay $30 million in cash and stock for the London-based company, which has raised less than $5 million from investors in the last two years.

The deal, first reported by TechCrunch, isn’t done yet, but it’s pretty far along, with signed term sheets, etc. All of TweetDeck’s investors will take a portion of their payout in UberMedia equity, I’m told.

Both Gross and TweetDeck founder Iain Dodsworth (pictured here) have been trying to build businesses within the Twitter ecosystem, though it’s never been clear how Twitter felt about that.

Gross, in particular, has had an uneasy relationship with Twitter: Last year, an earlier incarnation of his company tried to launch an “AdSense for Tweets” product at the same time that Twitter launched its own Google-like ad product, and that didn’t go well.

The two companies have other things in common as well. TweetDeck has been shepherded along by Betaworks, the New York-based holding company/platform/incubator that also specializes in the Twittersphere. And Betaworks is also an investor in…UberMedia.

Here’s an interview I conducted with Dodsworth last April, when the Twittersphere was particularly confused about the prospects of Twitter apps, like TweetDeck, that weren’t owned by Twitter itself. Looks like this one turned out just fine.

]]> http://allthingsd.com/20110211/tweetdeck-finds-a-home-and-30-million-at-ubermedia/feed/ 0 http://allthingsd.com/20110210/facebook-moves-to-disallow-apps-from-running-google-ads/ http://allthingsd.com/20110210/facebook-moves-to-disallow-apps-from-running-google-ads/#comments Thu, 10 Feb 2011 20:07:46 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=3475 Facebook announced this week it will begin enforcing a policy that requires app developers to run advertising from a list of approved providers. The list is not short–it includes 40-some options–but it notably does not include Google’s AdSense and DoubleClick.

Facebook is not necessarily targeting Google specifically, but it’s an obvious omission. The social networking giant said ad providers can join the list if they agree to certain restrictions on advertising, which include a commitment to never utilize Facebook user data.

Facebook and Google have warred over transmitting user data in the past, with a back-and-forth over exporting user email addresses turning nasty in public last fall.

Facebook will start enforcing the whitelist ad provider policy starting Feb. 28. At that point, app developers who run Google ads–which seems a natural thing to do, given so many publishers use Google ads on other platforms–will have to shut them off and find another provider.

A spokesperson for Facebook said, “We are continuing to work with various ad providers and will add them to the list as they sign the terms. Note that the policy doesn’t go into effect for a few more weeks.” Meanwhile, a spokesperson for Google declined to comment.

The CEO of an approved ad provider commented that Facebook’s efforts to “restore control and authority of how third-party companies work within its platform” make sense and are generally good for users. (And also good for him, with Google out of the hunt!)

Image via Flickr user bulliver.

Please see the disclosure about Facebook in my ethics statement.

]]> http://allthingsd.com/20110210/facebook-moves-to-disallow-apps-from-running-google-ads/feed/ 11 http://allthingsd.com/20110127/demand-media-says-its-getting-along-just-fine-with-google-thank-you-very-much/ http://allthingsd.com/20110127/demand-media-says-its-getting-along-just-fine-with-google-thank-you-very-much/#comments Thu, 27 Jan 2011 11:00:02 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=28728 So the first wave of investors has taken a look at Demand Media, and they’re buying: The “content creation platform,” as the company likes to describe itself, closed at $22.65 yesterday, up 33 percent on its first day of trading.

Again, be wary of reading too much into any stock’s performance on any given day. But it seems safe to draw at least one conclusion: Investors aren’t freaked out about Demand’s symbiosis with/dependence on Google. Even after a puzzling blog post from the search giant last week.

The post, written by Google engineer Matt Cutts, defended the search engine’s performance against a chorus of criticism. But it acknowledged that Google was paying attention to complaints about “content farms and sites that consist primarily of spammy or low-quality content” clogging its search results.

Lots of people logically assumed that Google/Cutts was talking about Demand, although the post never mentioned the company by name. And if Google, which supplies 28 percent of Demand’s revenue and a big slug of its traffic, has a problem with Demand…

But Demand CEO Richard Rosenblatt insists that Cutts wasn’t talking about his company at all. In fact, he says, Demand and Google are getting along just great, in a relationship that pays out real dividends for both parties. It looks like investors believe him.

I chatted with Rosenblatt about the Google post, and the companies’ relationship, yesterday at Demand’s New York outpost. Here’s an excerpt from our conversation:

Peter Kafka: Do you think that Google post was directed at you in any way?

Richard Rosenblatt: It’s not directed at us in any way.

Did you talk to them about that?

I can’t comment on that.

Okay. But they wrote this post, which talks about content farms, and even though you say they weren’t talking about you, it left a lot of people scratching their heads.

Let’s just say that we know what they’re trying to do. Last year, they put out three major changes. They put out Mayday–that was going specifically after spammers and low-quality content. Our traffic increased when they did that. The reason why is our content is being scraped and stolen, [because we're] the largest content producer. So they’re looking for original, non-duplicated, human-made content. That’s all our content. So if they were targeting us, you’d also see Wikipedia, About.com, Wikihow, every person that makes more than a few dozen articles….Our traffic went up.

Second one: They did something called Caffeine, to increase the [search] index. Our traffic went up.

They then did Google Instant. Our traffic went up.

So the three things [Cutts] talks about in his blog post did not adversely affect us. You can draw your own conclusions.

The post talks about going after spammers and content farms. But when you guys think of content farms, you don’t think that means Demand, right? You’re thinking of people who take my copy or your copy, and cut and paste it, and tweak it enough to fool Google.

He’s talking about duplicate, non-original content. Every single piece of ours is original. Written by somebody. And I understand how that could confuse some people, because of that stupid “content farm” label, which we got tagged with. I don’t know who ever invented it, and who tagged us with it, but that’s not us…We keep getting tagged with “content farm”. [Ahem.] It’s just insulting to our writers. We don’t want our writers to feel like they’re part of a “content farm.”

So can you sum up your relationship with Google today?

This is why our partnership with Google makes sense. 1) We help them fill the gaps in their index, where they don’t have quality content. 2) We’re the largest supplier of all video to YouTube, over two billion views and 3) we’re a large AdSense partner. So our relationship is synergistic, and it’s a great partnership. And it’s a partnership that we’re excited to continue to expand.

]]> http://allthingsd.com/20110127/demand-media-says-its-getting-along-just-fine-with-google-thank-you-very-much/feed/ 11 http://allthingsd.com/20101210/catching-up-with-factual-ceo-gil-elbaz/ http://allthingsd.com/20101210/catching-up-with-factual-ceo-gil-elbaz/#comments Fri, 10 Dec 2010 16:58:54 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=425 When you want to build an application that uses lots of data–say, a directory of auto-repair shops or hotels in the U.K.–one of the fundamental questions is this: Where does the data come from, and how do you get it into the application?

Gil Elbaz, the man who in 2003 sold a start-up called Applied Semantics (now known as AdSense) to Google, has what he thinks is the solution. His latest effort is Factual, and it attracted a $25 million round of funding from Andreessen Horowitz and Index Ventures with SV Angel and former Disney president Michael Ovitz participating. Ben Horowitz and Danny Rimer are joining Factual’s board of directors.

I caught up with Elbaz by phone yesterday to talk about the vision of Factual and his plans to grow the company.

NewEnterprise: So at a high level, what is Factual and what do you intend to do?

Gil Elbaz: We see this as an emerging category. We think of it as a data platform that offers data and data services to all sorts of developers, to build cooler, more innovative applications more quickly, especially when it comes to apps that are data-driven. Finding the right vendor for that data, and then integrating it, then managing and maintaining that data is costly and expensive. Developers can move that much more quickly by tapping into our knowledge base. We’re marketing certain verticals where our data is really good. We’re putting some extra marketing muscle behind our places database.

NE: Give me a use case. How might someone use the platform?

GE: Our places database is a good example where we’re getting quite a bit of traction. What we’ve done is built one of the most comprehensive databases of business listings and points of interest. This data is easy to browse, and it’s complete. It contains address and phone and contact info and latitude and longitude. If you want to a build a new service like Yelp or Foursquare, or something that relies on knowing what’s in close proximity, a mobile app can make a simple API call, send over the current GPS coordinate and fulfill the request very quickly. That’s just the tip of the iceberg of what we can do, but it’s making serious waves because it is very hard to get that data, especially if you’re going mobile. It’s very hard to get that good data for locations around the world.

NE: Do you have other datasets?

GE: We’re being market driven and being focused on that because that’s what our customers have been asking for. But we do have others. We have data from other vertical segments like health and entertainment. In the area of education we built a database of high schools that Newsweek magazine uses in their fairly important annual ranking of high schools. They not only use the data that we were able to generate and build, but they were also able to benefit from our crowdsourcing API, so that their users get not only a more engaging experience but the great partnership comes back into our central database, so the information can be improved. That’s a nice virtuous circle that makes us confident that our data is going to keep getting better because of these partnerships.

NE: I’m trying to come up with a metaphor, and the closest thing I can think of is data–information–as a utility supplier of data. If I want to build an application that contains a lot of data, I can come to you for the data I want to use so I don’t have to go out and gather it myself. Is that fair?

GE: I think that’s a pretty good metaphor. It’s really the access that’s important. When you use our pipe you’re going to know that you’re getting good data, that’s up to date and that we stand behind it, and that other people are participating to make it better, and update it, and that you can get it quickly. Looking ahead, there’s going to be times when it’s not strictly our data. Sometimes it will be data that has been uploaded from other people or from people in the community who want to take advantage of the data platform. So it’s really the pipes and the platform that we’re building that make this kind of data and sharing possible.

NE: You sold your first company to Google. The issue came up that you don’t need the funds. You could fund this on your own. Explain why you sought funding.

GE: I did fund the company for a little while. But I knew that our mission is very audacious and in order to become the ubiquitous data layer for the Internet, to be the obvious place that a developer would go to first to get data into their application, it’s a huge, tall order, and something that’s going to take a lot of technology and marketing effort and strategic guidance. The types of people that we brought in on our angel round and then the people we’re bringing onto the board have a lot of operational experience. Also, you never know when an idea is so big that you want to raise money down the line. If you want to do that it makes sense to build bridges with the financial community as early as possible, in case it does become a more capital-intensive business. This is a new category and we feel like we have a good understanding of it, and things can change quickly, and if it does, we want to be positioned with a good team who can help us navigate the different opportunities that will certainly arise.

NE: So now that you’ve landed the funding, what’s the first order of business?

GE: The challenge is always scaling correctly and quickly. I think we’re positioned well for this. We have a humming machine here. The management team is in place and we’ve been working on this for a few years now. And we have a great culture in place with people who are really passionate about making data available. However, hiring the engineering talent is taking up a huge amount of time. That’s the number one thing on my priority list for the short term.

NE: How do you find the best engineers? Is there a trick to it?

GE: I’d have to say that having worked at Google for three and-a-half years was the perfect place to learn what a deep and strong engineering culture was all about. I also got a lot of hiring experience at Google’s Santa Monica office. I don’t think there’s one trick. I think there are signals that a person is not just looking for a job, but for an opportunity to make extremely important intellectual contributions. And also I’m looking for people who want to make contributions not just to a project but to the world. You look for quick thinking and passion, and a history of doing things beyond what the job requires. I love it when I see people who have contributed to open-source projects on their own time. That demonstrates that they’re trying to contribute to society but also that they like working on important tools that make a difference.

]]> http://allthingsd.com/20101210/catching-up-with-factual-ceo-gil-elbaz/feed/ 0 http://allthingsd.com/20101207/susan-wojcicki-google-svp-and-advertising-chief-live-at-d-dive-into-mobile/ http://allthingsd.com/20101207/susan-wojcicki-google-svp-and-advertising-chief-live-at-d-dive-into-mobile/#comments Tue, 07 Dec 2010 15:25:50 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=232

You’d have to search a long time to find someone who’s been closer to the evolution of Google than Susan Wojcicki. It was in her rented garage that Sergey Brin and Larry Page launched the company, which she joined in 1999.

Today, while much of the attention on Google focuses on Android or Chrome, Gmail or YouTube, Wojcicki oversees the operations from which Google generates the bulk of its revenue and profits: AdWords, AdSense and DoubleClick among them. And in October she was made one of Google’s eight senior vice presidents.

She’s lately been quoting research from Forrester, which found that while 42 percent of people do research online before buying something, only 7 percent of those purchases happen online. Mobile advertising, she has argued recently, can help bridge that gap. Expect lots of discussion around that stemming from last year’s $750 million acquisition of mobile advertising firm AdMob.

Meanwhile, let’s be honest: Everyone wants to know what really happened between Google and Groupon.

Liveblog

8:36 am: Everyone is seated in the ballroom, and the session with Wojcicki is about to start.

8:39 am: Walt and Kara have come out onto the stage, thanking the audience for their support at big D and this week at D: Dive Into Mobile.

Before Wojcicki comes to the stage, they are introducing the new writers at All Things Digital:

• Liz Gannes, NetworkEffect
• Ina Fried, Mobilized
• Tricia Duryee, eMoney
• Arik Hesseldahl, NewEnterprise
• Drake Martinet

8:43 am: Walt and Kara hand the stage off to Peter Kafka, who will be conducting the interview with Susan Wojcicki.

8:44 am: We’re getting started. Peter Kafka is interviewing Susan. She says when she first rented to Larry and Sergey, they weren’t allowed to come in the front door.

8:45 am: Susan: I charged them $1,700 a month in rent.

8:45 am: Peter: Let’s start with mobile. It’s a big business but small for Google at $1 billion. Break out that billion dollars.

Susan: We don’t break it out. But they are all growing. To give you an idea of the growth, we saw a 4x increase year over year in the number of searches. AdMob has doubled, and is doing more than a billion ad requests per day.

8:48 am: Mobile brings an opportunity not just to bring people to a Web site but to a store. We just did something with Google Ad Goggles, with Buick, where you can see a magazine ad, scan and that takes you to an ad site.

8:51 am: Peter: In-app advertising is a small opportunity, but Google owns it.

Susan: We’d like to have everyone be an advertiser. We think about having very mobile-specific campaigns.

Our barriers to entry are a lot lower than those at Apple. We offer all the formats like video. We want it to be easy to advertise, we have a lot of systems that measure quality.

8:52 am: Peter: Who’s running AdMob day to day? Original management has left.

Susan: We’ve taken different parts of it and integrated it into our advertising and sales organizations. [Former AdMob CEO] Omar [Hamoui] has left for personal reasons, but pretty much most of the staff who joined with AdMob have stayed. The goal is how do we continue to innovate on that platform.

Peter: Do you view the phone differently from a privacy standpoint than on the PC?

Susan: I think the phone is a really personal device in a lot of ways. If you drop your phone or lose it there’s a moment of panic. On the other hand there’s a lot of control that users have.

8:57 am: Peter: You guys and the rest of the ad industry are telling Washington that they will self-regulate around privacy. FTC says that’s not going to fly, and they want something like an opt-out browser.

Susan: Google is a consumer brand and people need to be comfortable. If we were just an advertising brand we wouldn’t have the same concerns. We’ve always tried to promote transparency and choice among our users. We didn’t have a cookie on the AdSense network until about a year ago. There were a lot of things we couldn’t do.

8:58 am: Susan: We’re always interested in what’s being proposed. We’ll always participate in any discussion around proposals to improve privacy for users.

8:59 am: Peter: Do you think users really care about this? They’ll say they care if you ask them. Practically, do they really care?

Susan: People care. They also want to have good content. And they want the advertising to be relevant. We see advertising as information, and as long as we can make that information useful, the better it is.

9:01 am: Susan: We’ve had ads in Gmail since Gmail first launched. Ads get a bad reputation sometimes because theyr’e not useful. They’re not relevant, or slow. If you’re planning a trip to Hawaii, and see ads that are related to that, that’s useful information.

9:02 am: Susan: The moment that our products are not as good, people will go somewhere else.

Peter: So you were employee No. 18; now there are 23,000 employees at Google. Talk about how the culture has changed over time.

Susan: Google is a much bigger company obviously. We’ve tried to have a lot of different divisions and groups and have given them autonomy. Our display group is run like a separate group within Google.

The secret is to break into groups that are manageable, and give them as much autonomy as possible.

9:05 am: Peter: What are we to read into the fact that you’re offering employees bonuses to stay at the company?

Susan: Our employees are really valuable to us. They are basically our business. Google has been doing well. As much as possible we’re trying to share back with the employees. They will continue to create a lot of value.

9:06 am: Peter: If you’re coming to Google as a hot young engineer out of Stanford, what’s the most compelling thing you can say to bring them on board?

Susan: Google’s scale and platform. If you have a passion, and want to get things done. [Cites Andy Rubin, and the scale he's working at now vs. when Android was a start-up.] When you do something, it matters.

9:07 am: Peter: You guys were talking to Groupon. That deal has now gone away. [Asks about integrating companies into the Google culture.]

Susan: Each deal is different and you have to consider how best to integrate them.

9:09 am: Peter: What’s the product you’re most excited about?

Susan: Mobile ads. How can we enable you, when you’re walking around, to find out the best local offers around? As an advertiser, how can I find out if someone saw my ad and went to a store?

The local market is a huge market, we’ve always wanted to be in it.

9:09 am: Now going into Q&A from the audience.

9:13 am: Q: What do you view as being so hard about local?

Susan: The reason local is hard is because it needs to be simple. For small businesses, they don’t have a lot of time. You need to create a model that works for them. And it needs to be easy for them to sign up. On the back end, everything needs to just work for them.

9:15 am: And we’re done!

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]]> http://allthingsd.com/20101207/susan-wojcicki-google-svp-and-advertising-chief-live-at-d-dive-into-mobile/feed/ 0 http://allthingsd.com/20101202/google-tightens-copyright-protection-efforts/ http://allthingsd.com/20101202/google-tightens-copyright-protection-efforts/#comments Thu, 02 Dec 2010 20:22:35 +0000 Beth Callaghan http://voices.allthingsd.com/?p=33413 Google today announced four changes aimed at making copyright protection easier: Copyright takedown requests will be acted upon within 24 hours, AdSense anti-piracy review will be improved, terms “closely associated” with piracy will be prevented from appearing in autocomplete and the company will endeavor to make authorized preview content more available in its search results. The changes will take place over the next few months.

]]> http://allthingsd.com/20101202/google-tightens-copyright-protection-efforts/feed/ 0 http://allthingsd.com/20101123/facebook-acqhirees-make-a-quick-mark-on-its-products/ http://allthingsd.com/20101123/facebook-acqhirees-make-a-quick-mark-on-its-products/#comments Tue, 23 Nov 2010 13:00:12 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=672 Facebook has a well-defined M&A strategy of bringing in talent from young, small companies*. The company has reeled in 10 acquisitions this year, in most cases shutting down acquired services soon after a deal closes. The most it is known to have paid for a company is $50 million for FriendFeed. This has helped shape the epidemic of short-term thinking in today’s Web start-ups; sometimes, showing you are technically adept and have interesting ideas is all it takes for you to get a lucrative contract with Facebook and give your backers a mild return on their investment.

Bret Taylor

But there’s also a pattern emerging for what happens to that talent once folks arrive at Facebook. Acqhired CEOs hold prominent roles on Facebook’s product team; nearly every recent Facebook product launch seems to have been led by an acqhired employee. Most recently, Facebook Messages was product-managed by Dan Hsiao, who joined the company with the FriendFeed acquisition. Hsiao had actually been a more junior member of the FriendFeed team, having started there as an intern in 2008. Now he is managing what Facebook called the largest engineering team it has ever put together for a launch.

Meanwhile, former FriendFeed CEO Bret Taylor is CTO of Facebook. Hot Potato CEO Justin Shaffer was product manager for Facebook Groups and is now product manager for the company’s Places and Events products (his company was only acquired in August). Divvyshot CEO Sam Odio is now product manager for Facebook Photos. Nextstop CEO Carl Sjogreen now holds the title “head of platform development,” according to a Facebook spokeperson.

And Gokul Rajaram, known for his seminal work as a product manager on Google AdSense, is now in charge of Facebook’s ad technology. Rajaram came to Facebook through the acquisition of his company Chai Labs, also last August. Multiple sources confirmed Rajaram’s role at Facebook, though Facebook declined to.

Gokul Rajaram

Facebook has its reasons for keeping a big-name hire like Rajaram under the radar; for one, Google can’t be happy to have lost the opportunity to buy his start-up. The former Googler has been an adviser and director to multiple companies, including Canoe Ventures and Associated Content.

Elsewhere, Blake Ross and Joe Hewitt from Facebook’s first acquisition, Parakey, have had significant roles on products like Facebook Questions and the Facebook iPhone app. Ross’s title is Director of Product, though he is currently on sabbatical. Hewitt is working on undisclosed projects but “more on the engineering side,” said the spokesperson.

Facebook is not yet talking about where it will assign Sam Lessin, CEO of the just-acquired storage start-up Drop.io, and Cory Ondrejka and Bruce Rogers, founders of the just-acquired gaming start-up Walletin.

Facebook says it has about “two dozen PMs,” so the acqhired folks account for a significant but not dominant portion of that corps.

Facebook CEO Mark Zuckerberg told me last month:

We have a big footprint but we want to operate like a startup and take risks, and the best way to do that is to get people who self-select towards being entrepreneurs… The only real theme is that we haven’t bought any companies yet to get the company. It’s always been because we have a lot of respect for the people involved.

This kind of track record may make Facebook an even more enticing acquirer for small start-ups. On the other hand, it’s probably disheartening for Facebook’s homegrown talent to see these opportunities handed to people who are brand-new and who, in many cases, have little experience working at the scale of hundreds of millions of users.

*Facebook has also explored larger acquisitions of companies like Twitter and Foursquare (though Kara Swisher reported those talks were less serious than portrayed elsewhere), but those deals were never consummated.

Please see the disclosure about Facebook in my ethics statement.

Bret Taylor photo (CC) Brian Solis.

]]> http://allthingsd.com/20101123/facebook-acqhirees-make-a-quick-mark-on-its-products/feed/ 2 http://allthingsd.com/20101112/gmail-creator-leaves-facebook-for-y-combinator/ http://allthingsd.com/20101112/gmail-creator-leaves-facebook-for-y-combinator/#comments Fri, 12 Nov 2010 18:59:46 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=307 Paul Buchheit, the well-respected developer and angel investor, is moving on from Facebook, which had acquired him along with FriendFeed, the start-up he co-founded and funded.

Paul Buchheit

Buchheit has joined Mountain View, Calif.-based Y Combinator as a partner, a move that wasn’t altogether unexpected as he had been closely affiliated with the start-up incubator program. As an angel investor, Buchheit is the all-time leader for total YC companies backed. By the time the last three-month YC session had ended with a public Demo Day presentation to potential investors, Buchheit had already funded five of the 36 companies.

Buchheit is most famous for his work at Google, where he created Gmail, built the first prototype of AdSense and came up with the motto “Don’t be evil.”

Today is Buchheit’s last day at Facebook, where he had not held a particularly public-facing role. That’s in contrast to his FriendFeed co-founder Bret Taylor, who quickly rose through the ranks at Facebook and was named CTO in June. FriendFeed had been acquired for $50 million in August 2009.

In a blog post announcing the move, Y Combinator partner Paul Graham said of Buchheit, “He’s a good friend as well as one of the world’s best hackers; for years we’ve considered him an honorary YC partner.” Within the Y Combinator community, Graham is known as “PG” and Buchheit as “PB.”

Harjeet Taggar

Y Combinator also named Harjeet Taggar a partner today. This was an internal promotion for Taggar, who had joined the program in February to do business development. Previously, he had founded Auctomatic, which participated in the Y Combinator winter class in 2007, and was sold to Live Current Media in 2008 for $5 million.

Y Combinator partner Jessica Livingston said that the new expanded team of six partners should allow the program to invest in more companies. YC classes have grown significantly over time; the first session had only eight companies.

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