Blog-focused advertising networks are all the rage right now, with both Federated Media and Glam pulling down big valuation financing rounds in the last few months based on very early growth metrics. Other startups, like Six Apart, have launched their own blog advertising networks as well.
As we predicted, Technorati now joins them with the launch of Technorati Media later this morning (the site will be password protected until 9 am PST today), their own blog advertising network. This comes just a couple of days after news leaked of their new round of financing.
The company has been testing the new sales product with a number of partners, including BlogTalkRadio, BlogCritics, BlogCatalog, BlogTV, Technabob, GPSMagazine, GeekAlerts and NerdApproved. CEO Richard Jalichandra says these blogs reach a combined audience of approximately 17 million unique monthly visitors.
Early advertisers on the network include Honda, Acura, Toyota, t-mobile, Adobe, HP, Sandisk, MSFT, Verizon, Sun, Sony, Visa, Nike, Scion, Chevrolet, Paramount, Universal Pictures, 20th Century Fox and Best Buy.
Technorati has explored selling ads for third party sites for some time, but this is the first time they’ve opened the service up to anyone. Unlike Glam and Federated Media, they will take all comers, and say they expect blogs, from the large players on down through the long tail, will find they do a better job monetizing sites than the current options.
Ads are sold on a CPM basis. They will not make revenue guarantees, says Jalichandra, but the split between parties is negotiable. He declined to state what rates have been negotiated with beta partners. This is similar to what Six Apart promises, which is also targeting the long tail of blogs.
Jalichandra also says Technorati is uniquely positioned to sell ads at premium rates, even through small blogs, because they will be able to use descriptive tags/keywords, along with their existing blog indexing technology, to better match ads with content.
Technorati’s has seven sales professionals, led by VP Sales Tony Pribyl, a new hire. They also hired a new marketing lead, Jennifer McLean, away from Glam recently.
For now Technorati is only working with larger blogs, although it will be open to all comers in 2-3 months.
Blog search engine Technorati, which was simultaneously pitching a sale through Montgomery & Co. as well as a new venture round, raised $7.5 million in a fourth round of financing according to a regulatory filing. Investors include Draper Fisher Jurvetson, Mobius Venture Capital and FG Incubation.
I spoke with Technorati CEO Richard Jalichandra this evening, who confirms that a venture round has been closed and says that the company will make an announcement next week that includes more information.
It’s also clear that the company is refocusing its business. We believe they are launching a blogger-focused advertising network based on documents we published in February. The company has, however, considered other strategies recently, including a blog rollup. We’ll know more next week.
Technorati founder Dave Sifry, who left the company a little over a year ago, is launching a new company called Offbeat Guides this morning into private beta. Sifry’s blog post on the launch is here.
Think Lonely Planet travel guides, except they are created on the fly from Internet data sources, customized to you personally and then delivered via PDF instantly or (a color printed version) by mail within 4 business days. Data comes from open sources like wikipedia, wikitravel, Flickr and Google Maps, as well as proprietary sources that have cut deals with the company. And you can create a guide for virtually anywhere in the world - they have 30,000 or so destinations today, and will be adding regional versions in the futures (”France” or “Napa Valley” for example).
Users can add or remove sections that appeal to them (museums, for example, or walking tours), and the guides include things like up to date weather forecasts, events that are going on during your visit, current exchange rates, etc. If you tell it where you are staying, the guide will include walking maps based on that location. An example guide that I created is embedded below.
The guides aren’t free - a printed version costs $25, PDF (which can be printed at home or downloaded to a laptop or Kindle) is $10. Unsatisfied customers can get a full refund, the site says, and keep the guide.
Offbeat Guides raised a small seed round of financing (a “few hundred thousand dollars” says Sifry) in February 2008. The first 250 people to use the code “TechCrunch” can get into the beta immediately, along with coupons for two free books.
Also below is an interview with Sifry about Offbeat Guides from last week (Thanks to Michael Pick for the video branding work). And see our coverage of Nile Guide, which is also allowing users to create personalized travel itineraries.
Blog search engine Technorati was days away from merging with blog network b5media when the whole deal blew up earlier this week, according to a source familiar with the negotiations.
Technorati has been searching for a new strategy ever since it appointed CEO Richard Jalichandra last October. It was recently trying to raise an additional round of financing, and pitching venture capitalists that it could turn itself into a blog advertising network and/or even pursue a blog roll-up strategy.
The talks with Toronto-based b5media (they’re big in Canada) indicate that it is taking the blog roll-up idea more seriously than we previously thought. If the merger with b5media had gone through, Technorati would have gained a network of 340 blogs. One of the slides in the pitch deck Technorati was showing potential investors (shown above) outlines how a roll-up strategy could be combined with an ad network. Technorati would use its search engine to promote owned-and-operated blogs. It would sell ads using its own sales force instead of third-party ad networks for an “immediate 30-50% revenue bump” and sell across its network.
According to our source, the deal with b5media never went through, though, because of personality conflicts between the CEOs and a lack of transparency on Technorati’s part during due diligence. At least that is how the b5media side sees it. Prior to its dalliance with Technorati, b5media was itself trying to raise another venture round that would put a $20 million valuation on the company. But there were no takers. So b5media started talking to potential merger partners or acquirers (including at one point Federated Media Publishing). A combination with Technorati could have made both Technorati and b5media more appealing to later-stage venture investors. But now the two need to keep looking for other options before their time (and cash) runs out.
Trade magazine Blogger & Podcaster Magazine is expanding into advertising with their own blog advertising network.
The Blogger & Podcaster Network (BPN) will target “the B,C,D & E listers who have smaller and often more niche audiences.” Blogger & Podcaster have retained investment bank The Riderwood Group to obtain expansion funding for the network.
Those signing up to BPN will get promotion in the mainstream media through The Blogger & Podcaster Guide and revenue from advertising and other revenue generating services.
The obvious comparison for the network is Technorati’s recently revealed advertising network. Although both target the long tail, BPN would be one of the most different pitches I’ve ever seen in 6 years covering this space. To be a part of BPN you have to be listed in The Blogger & Podcaster Guide which costs $5 a month due to a new deal with USA Today (it was previously $49.95/ month). On top of the advertising opportunities there is also an affiliate program for selling memberships to the guide, pretty standard fare. This is where it gets very interesting: members will have “access to healthcare.” Exactly what level of healthcare provided wasn’t specified, with Blogger & Podcaster simply saying that “this is a big issue for bloggers/podcasters looking to leave their day jobs and go full-time.” Ultimately the devil will be in the detail but immediately every US based blogger who blogs for a living is going to want to look at whatever they are offering; even if it’s a basic healthcare package it’s a whole lot better than having no healthcare coverage in country that (unlike most of the rest of the western world) does not provide universal healthcare.
CNET is reporting that tech-focused advertising network Federated Media (which sells advertising on our behalf) is looking for a new round of financing. CNET is basing this partially on our previous report that they hired investment bank Savvian to represent them after they turned down a $100 million acquisition offer, plus a new source that says the company is looking at term sheets now.
From what we hear, Federated Media is looking at both financing and new buyout offers, but wants a valuation way beyond the $100 million floated to them last year. Founder John Battelle is said to be looking for more of a Glam-like valuation, in the $400+ million range. Glam has a similar business model to Federated Media, but focuses on womens sites. Glam also guarantees significant revenue to its partners, which resulted in a loss last year of $3.7 million on $21 million in revenue. Federated Media doesn’t guarantee revenue, and is reportedly profitable (they better be, with how much of our revenue they keep).
Federated Media is reportedly generating gross revenues in excess of $2 million per month, and they keep 40% of that after the split to partners.
It’s unlikely the company will get buyout offers in the price range Battelle is looking for, so a new financing is likely. But part of me wonders why they’re doing this at all. A new financing means a bigger valuation, which means they need a much higher price down the road when they do eventually sell. And with competitors springing up all over the place, margins can take a hit.
Perhaps Federated Media intends to take the Glam approach and go in the red for the sake of growth and begin to guarantee revenues. That’s a slippery slope, but it may also get Battelle his payday.
Through a variety of sources we’ve confirmed that Technorati is making plans for a major shift in its going forward strategy, and is also considering a number of corporate development transactions.
First, they’ve been pitching venture capitalists on another round of financing. That’s not surprising - their last round, $10.5 million, was in June 2006. The company has raised a total of just over $20 million, and given that they have 25 employees, it’s time for another round. But we’ve also heard that they’ve hired Montgomery & Co. to shop the company to buyers, simultaneous to their funding pitches.
What’s more interesting, though is what we’re hearing on the product front. Technorati, under new CEO Richard Jalichandra, recently changed it site to focus more on its core blogging audience.
That change foreshadows the upcoming shift - which places the Technorati site itself as an anchor in a new blog advertising network.
Advertising networks are popular right now - Glam recently raised $85 million after transitioning, seemingly overnight, from a small web property focused on women to selling advertising for a variety of similarly-focused publishers. And John Battelle’s FM Publishing, an advertising network focused on technology blogs, recently hired investment bank Savvian to help them raise money or sell after turning down a $100 million buyout offer.
Technorati will certainly be competing head to head with FM, although sources say they’ll focus on the long tail of the market as well (FM only takes larger sites). The network will be a self-serve exchange for bloggers (and other publishers) as well as advertisers. Ad units will include both display and text ads, and will allow units to be charged on both a CPM and CPC basis. This self-service model looks a lot more like Adbrite than Glam or FM.
Technorati tags, which are very often used to describe blog posts with keywords selected by the author, would also be a natural way for Technorati to target advertising more effectively.
Technorati has also considered other strategies recently, including a blog rollup. But our understanding is that they’ve gone with the ad network idea, and are currently focusing engineers on finalizing the product.
Will the strategy work? As we’ve argued many times, ad networks suffer from fickle customers. Glam offers partners revenue guarantees based on page views (and lost $3.7 million last year on $21 million in revenue). FM has resisted guarantees to date, but lost high profile partner Digg last year to Microsoft. Others, including us, have simply sold advertising directly while continuing to work with FM. With Technorati entering the market, publishers will have yet more choices. That’s good for everyone except the ad networks competing for their business.
Former Technorati CEO David Sifry has launched Web Hot or Not?, a Hot or Not site for websites. Sifry left Technorati in August 2007.
For the one person reading this who doesn’t know how Hot or Not style sites work, the site presents a website which must be scored between 1 or 10, 1 being not, 10 being hot.
MG Seigler writes that “Quite frankly I’m shocked it has taken this long for someone to come out with this.” I like MG, so perhaps its the intense jetlag talking when I write what the? Sure, on the surface it’s an obvious idea, but the reason why its taken this long for a site like this to appear is because the idea isn’t a very good one.
David Sifry hints that it might be a lark, and if that is the case then we’ll let it slide and recommend people take a look, it should provide seconds, maybe even a minute or two of interest. If, as Sifry suggests “Who knows where it’ll go” (meaning it might take off), I’m off to buy alcohol. Cheers.
Update: you can vote for Web Hot or Not on Web Hot or Not here.
Update 2: another site in this space that does it in a better way is CommandShift3. It’s a not a direct Hot or Not clone but it allows you to rate sites. Hot or Not Designs is another one.
At first glance, blog search as a category is oversaturated. Ok, at second glance, too. Not only did Google enter the market directly in late 2005, they’ve also increased the rate that they index blogs and other regularly updated sites for core Google search. TechCrunch, for example, is now indexed multiple times per day by Google, and new posts are often available in a normal Google search within minutes of posting. Most people today say the best blog search engine is, simply, Google.com.
Now Europe will have it’s own blog search engine - Twingly. I met Martin Källström, the company’s CEO, at the DLD conference in Munich earlier this week. Their focus, he says, will be to have a spam-free engine (something none of the others can claim) at the cost of inclusiveness. And at least at first, the engine will be focused on European blogs. Twingly’s search engine hasn’t launched yet, although I do have a screen shot of what the home page will eventually look like:
Twingly already has a product - a nifty screen saver that shows blog posts on a world map as they are written. The new search engine will use some of the back end technology they’ve developed for the screen saver - mainly their ping server (see here for our overview of what ping servers are) and existing index of blogs.
The search engine will be different from others, Källström says, in that it will be almost 100% spam free. How are they doing that? Instead of trying to index every blog in existence and then removing spam via black lists and other methods, they are limiting the blogs they monitor to those that are proven to be legitimate. They started with a small list of known blogs, and then spidered out from there based on links to other blogs. The assumption, which is fairly sound, is that good/real blogs will not link to spam blogs. The end result is a white list of real blogs that are indexed - everything else is ignored.
Källström says that, in addition to the consumer-facing search engine, they’ll partner with large content news sites to show blog posts related to news content. This is something both Sphere and Technorati have had success with in the past, and the company can do revenue-sharing deals on additional page views. Content providers like it because it incentivizes blogs to link to their content (to get a link back). Twingly may not be able to compete with Sphere and Technorati in getting U.S. based partners, but he says he already has some deals with large European publishers completed.
The company has raised €1 million in a July 2007 round of financing from Servisen. They have seven employees. Look for a launch of their search engine in the next month or two.
Technorati made changes this week to the way it counts inbound links for purposes of determining its blog rankings. This had some effect on the Technorati 100 list.
Technorati was previously counting all links made to blogs on a given domain. So links to, for example, chinese.engadget.com were also counting towards engadet.com, even though they are separate blogs. They are no longer counting these links.
Engadget took the biggest hit, losing more than a quarter of their 30,000+ unique links over the last six months. They are still the top blog; however, no. 2 Gizmodo is within striking distance, whereas before they were not even close. TechCrunch was affected, dropping from no. 2 to no. 3 behind Gizmodo (our France, UK and Japan blogs are on subdomains). Even so, the changes seem appropriate.
Technorati VP Engineering Dorion Carroll explains the change here. There is still a massive amount of fraud links counted by Technorati in their Top Blogs list. I’m hoping that their newfound focus will lead to further changes.
Blog-focused advertising networks are all the rage right now, with both Federated Media and Glam pulling down big valuation financing rounds in the last few months based on very early growth metrics. Other startups, like Six Apart, have launched their own blog advertising networks as well.
