Outbrain Pushes Must-See Content, Attracts Venture Capitalist to its Ranks
News links in the social era get swapped much like baseball cards of old. Readers repost and Like topics they expect their friends to share an interest in. New York startup Outbrain is not out to become your Facebook buddy—but the company will steer you to stories it believes you want to see.
Outbrain has created a recommendation engine that notes what stories are holding readers’ attention and presents other stories of comparable flavor. Gilad de Vries, vice president of brands and agencies with Outbrain, says the four-year-old company operates somewhat behind the scenes, running its widget on websites for content sources such as Slate, TMZ.com, USA Today, and Chicago Tribune. “We’re installed on 80 percent of [the websites for] the top 200 publishers in the U.S.,” he says.
Outbrain’s widget presents links to stories on third-party sites that are also part of the network, not just related stories from the original outlet. That gives readers multiple sources to choose from if they want to see new angles on a topic. Moreover, it increases publishers’ exposure, which in turn gives their advertisers more chances to connect with potential customers. “You read an article on CNN and get a recommendation to continue reading on Chicago Tribune or vice versa,” de Vries says.
Outbrain’s widget has already impressed investors, who have pumped 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.
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.
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.”