Funding Monday continues. NY/Israeli startup Outbrain is announcing a $5 million series A financing, led by Gemini Israeli Funds and Lightspeed Venture Partners. GlenRock Israel also put money into the round. The company was founded by Yaron Galai, a co-founder of Quigo (recently sold to AOL for $340 million), and Ori Lahav, previously a technologist at Shopping.com. It raised a $1 million seed round last year from Lightspeed’s and Gemini’s joint Internet lab in Israel, LGiLab, which is managed by TechCrunch France editor Ouriel Ohayon.
Outbrain is creating a ratings and recommendation platform for blogs and news feeds. So far it has developed a rating widget that can be placed at the end of every blog post or news feed item so that readers can rate each one. Outbrain wants to use these widgets to create a cross-blog/news recommendation system using collaborative filtering techniques similar to what you find on Amazon.com for products. “Readers like you also liked:” X. Nobody has to register. Outbrain makes its inferences anonymously based on cookies. Explains Galai:
With every rating that’s cast to our system, we constantly tweak the ‘closeness’ of each reader to all other readers who ever rated anything. We then give your like-minded readers a higher weight when making recommendations for you. So the more items you rate (and rate honestly), the better your personalized recommendations should get.
This is in contrast to the folks that do ‘related articles’ functionality which is based purely on the content of the post. Those by definition are one-size-fits-all recommendations which we do not believe are very effective. So while others try to target recommendations that are relevant to the content, we are trying to target recommendations that are relevant to the readers.
Outbrain’s widget can be installed on most blogging and RSS platforms, including Blogger.com, TypePad, WordPress.org, Drupal, FeedFlare, and MoveableType. Bloggers can grab it here. It competes with other rating and recommendation widgets out there, including JS-Kit’s rating widget and Criteo’s Autoroll widget that creates reader-centric blogrolls.
nice idea for typical blogs, and while they say ‘no marketing crap’ you are in fact jammed in the face with marketing crap if you click that little ‘?’ question mark icon…
as for drupal, i think it’s a no go – too many people on drupal (and wp) using a voting api to do many other things beyond just rate assorted items…
but for a typical install of any blog, cms etc, this is a really great idea – particularly if they offer a way to view related/suggested links from sites that the user can define (or at least blacklist certain sites and so on)…
Schonfeld, I expected more technical tutorials on MapReduce from you, not this financial stuff. It is *Tech*Crunch after all, not FinanceCrunch.
Interesting idea.
STUMBLED!
Added to TopStumbles:
http://www.tops...ises-5-million/
Given that I find the Amazon rating and recommendation system pretty useful, this may not be a bad idea…
Seems similar to Blogged which was described several posts ago. What is the difference?
Check out:
http://www.ratingwidget.com
The logo image does not link to anything.
http://yooflix....earchVideo.aspx
#2 , how long you going to run with the mapreduce rubbish for , let me know and ill avoid techcrunch for that lenght of time.
You forgot to mention http://www.spotback.com who’ve actually been doing this the longest (if I’m not mistaken). I’ve used JS-KIT and others before, and I’m sticking with them now..
You guys haven’t reported on stage6.com shutting down yet. It’s terrible news
Seems like a better BlogRush… hopefully it will work, because BlogRush was a good idea…
Thanks Rusty- indeed I think that not mentioning Spotback in the post was a little strange given that TechCrunch itself reported the release of Spotback’s “Rate Everything!” widget back in March 2007. Spotback already introduced then the idea of personal content recommendations based on the user preferences and rating history, as opposed to contextual recommendations (related articles). See previous TechCrunch review here: http://www.tech...rything-widget/
I am pleased to update that Spotback rating network continues to grow and already servers thousands of websites and blogs all around the Internet in many languages, topics and designs – allowing users to rate anything from blog posts to comments, photos, videos, music and even other users.
Mike, See additional coverage and a short interview with Outbrain’s CEO Yaron Galai on VC Cafe:
http://www.vcca...ses-5m-a-round/
By the way, I use Outbrain on my site and have only great feedback for the product.
The same as http://www.mind...creenshots.aspx
WTF is the revenue model for this?
Please don’t say “ads”. This is only like the 92nd blog rating site to come down the pike…just this week.
Assumimg it is ads, they’ll be lost in the crowd.
It amazes me that a company needs 5 million to implement this idea, not to mention an idea that has been done again and again.
and I agree with Joe T…how you gonna make money.
How is this going to make money and can’t we get the geek perspective on the inner-workings as said above? I think this is an interesting idea but it also needs to be created into an XHTML/javascript widget for different types of blogs not just on the primary platforms. MySpace blogs, etc.??
Hey all – I’m outbrain’s CEO. Thanks for all the feedback.
#17 – We do offer a JS version here – http://www.outb...ings_other.html
If you need help going live with our widget or have any other questions – drop me a note at galai [at] outbrain [dot] com
This seems to me to be a pure acquisition play (i.e. position the company to be purchased by large Internet search/content company). There is no obvious way they are generating ANY revenue based on current business model. I imagine the VC money is covering the burn (salaries, Amazon S3 hosting) while they try to reach critical mass. I can see this technology and associated user-base could be attractive to a big player (IF, they can reach critical mass). Seems similar to del.icio.us, plus addition of recommendation capability.
Del.icio.us similarities are dependent on the tagging of the posts in the feeds for better blog recommendations. Hitting critical mass will be hard, there needs to be some sort of incentive added into the picture – such as traffic? or money? It’s all about how the app will make money, that’s the main goal, regardless of the great central idea.
I don’t believe in building companies for selling… it doesn’t work (or at least not interesting for me). I posted about it here – http://www.webx...ain_gets_f.html.
I think outbrain will be a very solid, long-term business, even if currently we’re not 100% sure how specifically we’ll generate revenues from it.
That’s a great idea! Good luck.
There’s nothing like getting a referral from people with similar interests and who’s rankings are high.
It would be interesting to see if they could make 5 recommendations instead of 2.
mahei – while we hope to make lots of recommendations in the future, right now we’re focused 100% on making *great* recommendations. We’ve consciously decided to sacrifice coverage in favor of quality. We want to make sure that when you see an outbrain recommendation, that you can trust it as being really very good and worth your reading time.
Good luck. The challenge is providing enough incentive for bloggers to add the plugin. What is the advantage to bloggers who add this? Isn’t it just as effective to check out the blogroll of bloggers you are following? Or perhaps visit BlogCatalog where you already can get recommendations of similar blogs to the one’s you like and even engage the bloggers in conversation.
How can they get all that VC money when, according to Mr Yaron Galai himself, they’re not even sure what their revenue model is, or even if they’ll have a revenue model?
In the real world of VC fiancing, this just doesn’t happen. The VCs would be liable for breaching their fiduciary duties to the fund because of inadequate due diligence and negligence.
Which leads me to believe the VC financing deal here might be a paper deal, an “inside” deal, or something being done on a wink-and-a-nod, for whatever reasons.
Yaron, are/can you internally aggregating the data your plugin generates for analytical purposes?
Joe T
Your analysis is strange which leads me to believe that you do not get how things work. Quigo was one of the most successful companies to exit in 2007, and probably within the top 20 ad companies of all time. Do you need more reasons for a VC to give Mr. Galai more funding?
Yes it makes sense in light of Galai’s background in contextual ads. The challenge will be to make this plugin compelling to bloggers. I suppose if they add a revenue sharing component then bloggers will be more likely to add this plugin to their blogs. However, they may not want to add the plugin as it detracts from readers leaving blog comments.
Jenkins – lots of people who started companies with successful exits go on to found startups that get lost in oblivion. Whatever happened to Marc Andreesen and LoudCloud? Look at Jeff Taylor, who founded Monster, and his recent white elephant,
Eons. Should VCs make funding decisons based on a name, or on the merits of the company?
All of the examples you cited are people that have raised money after a successful outcome. VC’s will give successful people extra space, that’s all.
#24 Antony – This is John from Outbrain (biz dev). Good question on the benefits to bloggers. It’s really three fold right now; 1.) ratings add a level of interactivity to the blog that is easier for readers to cast than a comment, 2.) from the ratings we power personal recommendations to your readers to your own content, the goal here is simple, drive page views on your blog through personalization, 3.) collect ratings on your content through rss readers as we are integrated into 4 major platforms. Plus some side goodies like a slick Blog Rating Analytics Report and a “Most Popular” badge round out why bloggers would install our free plugin. Feel free to shoot me an email at john (at) outbrain (dot) com for more info.
Your point about how ratings interact/effect with the comment ecosystem is an interesting one. Thanks for the thought there, as I will be looking into this.
hh2020 – The whole idea is to aggregate as much data as possible, from as many sources as possible, so that we can make the most intelligent recommendations for each particular reader. So the answer is absolutely yes.
Joe T – I believe that Marc Andreesen sold LoudCloud for ~$1.6B. Not a bad outcome for a company lost in oblivion…
It definitely has value. The challenge/opportunity is communicating these benefits to bloggers. It seems as though many widget/plugin companies miss this opportunity because they communicate in language that the average blogger doesn’t “get”. At blogcatalog, we recently did a deal with SezWho, to get a blogcatalog version of their widget installed on blogs. So far the results have been pretty good.
products or services with no business modle should shampoo my ass!
outbrain represents its founders as they all with(out)brain.
you wanna create a service for the net? Either create a truly out of the blue concept, that don’t need to show a source of income at start, or as the saying goes: show -me-the-money!
99/00 big bang here we come.
Antony – Good points. Why don’t you shoot me an email at john(at)outbrain(dot)com re: personalization of content on Blogcatalog. cheers
How the f*ck can you raise $5m for something as basic as contextual filtering? Either the VCs are retards or the founders are geniuses, because I know people who were unable to find any funding for ideas (with business models) that were way more innovative than this.
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Great Idea, but might not be easy to monetize profitably.
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