Outbrain Pushes Must-See Content, Attracts Venture Capitalist to its Ranks

7/13/11Follow @jpruth

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some $29 million into the company since its inception. In fact, de Vries was a venture capitalist who joined Outbrain in January from Carmel Ventures, one of its backers.

Gilad de Vries joined Outbrain in January.

At Carmel, De Vries was a principal and vice president of digital media based in Herzeliya, Israel. The firm first invested in Outbrain in 2008, de Vries says, though he had been in contact with the startup since in 2007. Other investors in Outbrain include Rhodium, Gemini Israel Funds, Lightspeed Venture Partners, and GlenRock.

Danny Cohen, a partner with Gemini Israel Fund, says he was attracted to the track record of Outbrain’s founders Yaron Galai, CEO, and Ori Lahav, chief technology officer. Galai previously cofounded Quigo Technologies, an online ad-targeting business acquired by AOL in 2007. Lahav was manager of research and development with price comparison service Shopping.com. “We knew they could build the right product and the right scalable architecture,” Cohen says.

De Vries says he was drawn by Outbrain’s potential to foster the growth of the online content marketing industry. “If a company can seize this market the way Google took hold of search, online content marketing may see returns comparable to the offline marketing world,” he says.

The idea for Outbrain, de Vries says, emerged after Galai watched his own wife read a magazine. “He was shocked at how much she was enjoying content that when he looked at it, it all looked like ads,” de Vries says. The brands promoted alongside the stories were targeted to appeal to the reader.

But Ttranslating that experience to the online world posed a challenge de Vries says. Outbrain’s solution is to use cookies to note which stories a reader has perused—but without logging personal, identifiable information, he says. “Every time they go to a partner site, the only thing added to the cookie is the notion of which articles they interacted with,” de Vries says. That way stories that have already been read will not be recommended again. Users may opt-out of such activity if they want their browsing to remain hidden.

The goal is to drive more persistent visitors to websites, de Vries says, which also benefits advertisers. The recommendation engine is designed to present readers first with articles that have already drawn significant traffic, he says. Part of Outbrain’s staff of 65 reviews the promoted content to ensure the links do not send users to direct response pages, advertisements, or brand homepages.

In addition to the New York headquarters, Outbrain has offices in Los Angeles, Chicago, Boston, and Washington, DC. The company has a research center in Israel and an international headquarters in London. De Vries says the startup plans to open offices in France and Germany.

De Vries says Outbrain currently only recommends content from sources in English, but that will change as the company expands into new territory around the world. “The next frontier is introducing different languages,” he says. “In the next six months you can expect us to support Hebrew, German, French, Spanish and Portuguese.”

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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  • Marvin

    This is the same guy that founded the PPC advertising business called Quigo and he’s basically doing the same thing but hes just not marking the links as advertising. As a matter if face he’s positioning paid links as “recommended” if you look in their media kit. I think this is immoral, I think its illegal and it certainly against the editorial standards of most of the publishers that take these links.

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