Former Zango Execs Unveil BigDoor Media to Help Web Publishers Make More Money

10/14/09Follow @gthuang

It’s one of the great mysteries of the modern Internet. How can Web publishers make more money from their content? For everything from blogs and journalism to games and entertainment, publishers and software companies alike have been trying to solve this problem for many years.

Now BigDoor Media, a six-person startup in Bellevue, WA, thinks it has found the right approach, at least for a certain market. Its basic idea is to provide a revenue stream for entertainment publishers that bridges the gap between traditional advertising and subscription models. BigDoor, which is emerging from stealth mode today with a beta version of its software, provides an “offer platform” that acts as a gateway to a website’s premium content. Instead of paying for a game by credit card, say, a consumer can opt to fill out a survey, sign up for a newsletter, or buy an advertiser’s product (like Fiji Water, for instance).

This is not an entirely new idea. And in fact, BigDoor operates in a similar space as many other Seattle-area startups we’ve reported on, including AppBank (for social entertainment applications), DevHub (for creating and hosting websites), Mpire (for online-ad optimization), Wetpaint (for social publishing), and Others Online (for behavioral profiling of audiences), which was acquired this summer by the Rubicon Project. These companies have different customers and revenue models, but they are all fundamentally trying to help Web publishers make more money from their content.

What seems to set BigDoor apart is the experience of its founders. Keith Smith and Jeff Malek spent about 10 years in the online advertising world with Bellevue-based Zango, the controversial “adware” company that closed down earlier this year. Smith was CEO and co-founder of Zango, while Malek was vice president of engineering and products. Zango had success but eventually ran into problems, in part because adware in general—software that tracks which sites you visit and delivers targeted ads—became widely reviled by people who felt it violated their privacy or was just plain annoying.

The key is that Smith and Malek seem to have learned from their mistakes as well as their successes, and are starting anew. For starters, they say adware is a flawed business model, and they’ll never go back to it—or any ad software that gets broadly distributed beyond their control.

BigDoor is focused on the specific problem of social entertainment sites—those that provide things like games on social networks, video streaming, and electronic greeting cards. As Smith explains, a lot of these online publishers have great content and loyal followers, but simply aren’t making enough money from their sites. “When users are online, they’re either in commerce mode or entertainment mode,” Smith says. That’s why Google.com makes 100 times the revenue of YouTube.com, even though their traffic is comparable, he says; when you’re watching videos, you don’t want to be clicking on ads. At the same time, most consumers don’t want to pay for content either.

So Web publishers can sign up for BigDoor’s widget, which pops up as a message when consumers want to access certain premium content. By filling out a survey from a marketing research firm, for instance, a consumer can gain access to games or other content for a certain period of time. Publishers can install the widget without any programming expertise, Smith says. He contends that this “offer” approach will generate more revenues—which are shared with BigDoor—than Google ads or other ad networks. “Our model is all about making an offer platform simpler and easier to use,” he says.

Smith says the No. 1 lesson he is applying to his new venture is, “Be good to consumers.” That means having an open system and letting publishers control the look and feel of their widget, and its business rules, so consumers will have trust in the transaction. “It’s our version of ‘Don’t be evil,’” he says.

BigDoor raised $250,000 in funding from Founder’s Co-op and angel investors this summer. Like many startups, its software platform runs on Amazon Web Services, taking advantage of the scale and relatively cheap cost of cloud computing. Smith says he has signed up 12 publishers so far. Looking ahead, he says, “The big thing for us is getting a lot more publishers, and high-quality publishers, to use our platform. Things don’t always work as well as we like them to—we need to get more scale.”

The eventual goal is to create an automated self-service platform that publishers can use to set up their own offers, Smith says. All in all, it sounds like a pretty crowded and noisy space, but if BigDoor can solve its share of the problem, a lot of publishers—and other startups—may soon follow its lead.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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