VentureBeat

Updated

The Los Angeles Times has partnered with Mixx, a social news website, to give readers more input in the news they read.

The publication has also said it will start using technology from Aggregrate Knowledge, a Silicon Valley company, to deliver user-driven content suggestions to its web site, starting with its travel section. It lets users see what other users like them have also viewed.

These are the latest moves by a large newspaper to try to include more social or open features into its Web site. Strategies vary widely. Recently, for example, the New York Times started linking to other sites from its Web site, for example — though that effort still lets editors control what stories are pointing to.

The LA Times calls itself the largest metro newspaper in the country, with 2.2 million daily readers. The company said it also invested in Mixx, though the amount was undisclosed (see statement). The company said the stake was small.

Mixx launched in October (see coverage), partially as a way give newspapers and other publishers their own version of the popular news ranking site, Digg. But rather than letting hundreds of thousands of young techies dictate what is popular — as Digg does — Mixx gives control to the individual user. It shows them stories based on where they live and what their self-defined interests are. Its recommendation engine is standard, offering up content, including news stories, video and photos, relating to your previously expressed interests and location.

The company sees itself as being more than a competitor to Digg. It is also a competitor to personalized start pages such as My Yahoo, iGoogle, PageFlakes and Netvibe, chief executive Chris McGill tells us. It offers a one stop place for relevant news and other information, like those sites do. It also offers group and profile features, the components of a social network.

Mixx has signed deals with USA Today, Reuters.com, The Weather Channel, Kaboose and uclick Comics. It is owned by Recommended Reading, of McLean, Virginia. It had previously raised $1.5 million round of funding, in a round led by Intersouth Partners.

The service will be integrated into LATimes’ story pages.

In addition, Times’ content will be “optimized” for searches from within the Mixx site, suggesting results will be biased toward returning LATimes stories.

McGill served as the general manager of Yahoo News from 2000 to 2004 and the vice president of strategy at USA TODAY from 2005 until earlier this year.

The company is getting several hundred thousand unique visitors a month, McGill tells us.

Aggregate Knowledge’s technology, meanwhile, will be rolled out across the LATimes.com site over the coming months. Image here is an example of what Aggregate Knowledge provides for articles on the site. See this page, for example.

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Aggregate Knowledge, a Silicon Valley company that recommend products to visitors of Web sites based on what people like them have previously chosen, is offering its service across Web sites.

The service is called the Pique Discovery Network.

The San Mateo, Calif., company’s technology seeks to put products or content in front of you that pique your interest. So if you’re reading an article on WashingtonPost.com about your favorite sports player, says the Yankees’ Alex Rodriguez, the network will show other articles about A-Rod that other fans have chosen to read, and then also tickets to the next game A-Rod is playing in — all in the same window. Pique draws the tickets from a ticket site participating in its network.

Chief executive Paul Martino says several competitors doing what Aggregate Knowledge does to recommend products — for example, Germany’s Wunderloop — but that few sites offer the service across Web sites.

He said the product will work in email, too, for example offering you three products in your email related to what you most recently bought. It will work on mobile phones, things like affiliate programs, point of sale devices and set-top boxes, much of this to be offered next year. The project is in testing mode, and Martino said several customers are using it, he wasn’t allowed to name them.
He said click-through rates range from 18 to 22 percent consistently, and sometimes as high as 25 percent.

The company has already served technology to 60 million people checking more than 100 Web sites owned by 35 clients — including Overstock.com to Vinfolio, HealthCentral, SmartBargains and TicketsNow.

The company employs 50 people. Martino isn’t saying whether it’s profitable yet.

Aggregate Knowledge held a dinner with its backer, Kleiner Perkins‘ Randy Komisar (pictured left), with several media folks. We were unable to attend for time reasons, but Komisar again said his firm is not investing in “Web 2.0 companies.” Kleiner Perkins is a well regarded firm, and so Komisar’s comments got picked by Tom Foremski, who suggests Kleiner has somehow “halted Web 2.0″ investments, as though there was some sort of abrupt conscious decision. However, Komisar has expressed skepticism about Web 2.0 in this column he wrote for VentureBeat in January, and said back then that he wasn’t interested in the sector. He seems to be repeating what he did then, which is there’s a lot of hype around Web 2.0 and that companies seeking to make money simply from Google ads don’t have much of a chance. This is more of a comment about pure Web 2.0 companies and what that term has come to stand for.

Predictably, though, Komisar’s remarks elicited a quick response from Tim O’Reilly (scroll down), whose group helped come up with the term Web 2.0, and who has a lot at stake at this term not losing some of its luster, in part because he hangs an entire (lucrative) conference on the term. In our view, this is all just a game of semantics. Since Komisar made his remarks in January, plenty of Web 2.0-related companies have seen good outcomes, from StumbleUpon, to Zimbra and LastFM. All of these offer great services. Komisar wouldn’t deny that interactive features like the ones offered by Zimbra are powerful and worthy of investment. Indeed, his own investment, Aggregrate Knowledge, exhibits many Web 2.0-related elements. Rather, he’s beating the drum against endless line of copycat ad-dependent sites that aren’t offering anything unique.

Update: We’ve gotten a list of attendees (web20conference.pdf) to the recent Web 2.0 conference, which includes many venture capitalists, so there’s still some interest here. Notably, a source tells us Kleiner Perkins has been looking to hire a partner to focus on investing in web companies. We’re trying to confirm.

Aggregate Knowledge, which tracks Internet user surfing patterns within a site in order to sell them more, has raised $20 million in venture capital, as expected.

We reported about Aggregate Knowledge’s progress in February, including early details of this round. Venture capitalists valued the company higher than $70 million (post-investment), the company’s chief executive Paul Martino confirmed. DAG Ventures led the round, and was joined by Kleiner Perkins. Martino, an affable fast-talker, also co-founded social networking company Tribe.net. Unlike that company, which struggled, Aggregate Knowledge is making millions of dollars after less than two years of business. It serves 15 customers, including Overstock and Washington Post.

It works by offering products, news content or other material to users based on what previous users expressing similar behavior have chosen to buy or read. Competing start-ups like Wunderloop and Baynote pursue similar strategies (see VB coverage of Wunderloop and Baynote). Aggregate’s Martino says he is targeting industry leader Omniture, a public company that bought Touch Clarity just as Aggregate Knowledge was closing its venture round several weeks ago. Omniture uses both Web analytics and behavioral targeting — and that’s where Aggregate Knowledge also wants to go, said Martino. Unlike Omniture, he said, Aggregate Knowledge has negotiated the right to use customer data across sites. So if you’re reading an article about a baseball game on one site, AK can recommend a ticket from another site.

Leading the round is DAG Ventures, which has become known as “coattail ventures” because it loyally invests in companies already backed by successful firms like Kleiner Perkins, Sequoia and Benchmark. Kleiner Perkins led AK’s first round. The latest round brings total investment in AK to $25 million.

Wunderloop, of Germany, recently unveiled its WunderLOOP’s Connect, a behaviorally targeted online advertising exchange. It allows publishers and advertisers to access user profiles to maximize ad targeting possibilities.

Baynote is yet another company boasting that its customer behavior-tracking technology can boost revenue for Web sites.

It says it has increased revenue for some customers by up to 20 percent.

It recently raised $10.75 million in venture backing, (see our recent coverage), but we only yesterday got to see a demo of the site.

Baynote’s technology seeks to quickly get people to pages they’re most interested in. Example: One of Baynote’s customers is StressCenter.com, a site centered around advice given by stress counselor Lucinda Bassett. If you type “StressCenter.com” in your browser (see first screenshot below), there’s a high likelihood your interest is of a general nature. Baynote knows that you’re more likely to first seek a self assessment test, or a tutorial about how the StressCenter program works. Baynote knows this by analyzing behavior of past visitors, watching how much time they spend on each page, for example.

However, if you type in “Luncida for stress,” in Google, you’re more likely to be interested in things directly related to Lucinda. Indeed, Baynote finds that people using this search are more likely to spend time with things such as Lucinda’s testimony about how she overcame anxiety and depression (see the screenshots below, for how Baynote produces a menu box that caters differently to each visitor).

Baynote is also applying this to e-commerce. If you’re buying a washer, for example, Baynote will show you washers that are similar to the one you’re browsing on your retail site. It will show you washers that other people have spent time considering (Baynote tracks customers as they surf back and forth between washers). Baynote says it observes 20 types behavior patterns. Aggregate Knowledge is a competitor, showing fast growth, and doing something similar. Baynote offers some features that Aggregate Knowledge doesn’t. With some customers, such as PoliceOne.com, Baynote’s software gives you a menu page with suggestions of pages you may be interested in — and pops up previews of the pages when you scroll over the menu, thus saving you time. (If you go to PoliceOne.com, you may not see this feature; Baynote splits visitors into two groups, one who get to use the feature, and another that doesn’t, for study control purposes).

Our conclusion: This provides a lot of use for retail and information sites that until have relied on regular old (and dumb) key-word search technology (whether Google, Verity or other corporate search product).

(Updated) Round-up in Silicon Valley:

Google working on a Google Earth version of Second Life? — So says venture capitalist Michael Eisenberg, a partner at Benchmark capital, the firm that invested in Second Life, citing a rumor from the “PhD grapevine.” [Update: Google spokesman Daniel Pastor says: "We're continually exploring opportunities to expand our offerings, but we don't have anything to announce at this time."] Google co-founders have always been about having “impact.” This would give them a chance to act as virtual central bankers, a function Second Life has been having problems with. See the latest allegations, for example, that Second Life is akin to a pyramid scheme, and that it’s much harder to pull your money out than you’re led to believe.

Marketclusters, latest effort to filter blogs for corporate clients — It is the old lemming play. Monitor110, of New York, and TechDirt, of Belmont, Calif. (Silicon Valley) are doing versions of this, and have just raised capital to sign up clients. And so Marketclusters, of London, has raised $3 million from New Media Spark. It serves corporate and financial clients. Notably, it lists among its clients Silicon Valley venture firm Benchmark Capital, which happens to be an investor in Seeking Alpha, a company that aggregrates information from financial blogs, and so is somewhat related. Benchmark has been known to hedge (for example, investing in both online loan marketplace competitors, Zopa and Prosper).

The world’s densest memory circuit — Researchers at Caltech and UCLA said they have created a circuit 100 times denser than today’s standard memory circuits — while remaining as small as a human white blood cell.

Adobe’s curious acquisition of a peer-to-peer networking company — Om speculates on why Adobe, the giant software and Flash multimedia maker, has bought a Santa Cruz, Calif. P2P networking start-up, Amicima though we’re still left scratching our heads about exactly why.

Bix, the little $41M web site? — Bix, you’ll recall, was the light-weight Web site that let people compete in online karaoke, hot or not and other contests. It raised $6.7 million, and then was snatched up by Yahoo, apparently for a 6-fold return (according to one rough account), within six months of launching. Not bad. [Update: A credible source close to Bix tells VentureBeat the actual price was higher than $41M]

CleverSet latest online behavior monitoring company — This company joins a number of other players, including Aggregate Knowledge, that try to predict what people will want to buy based on their behavior. CleverSet watches what you click on, what information its clients have about you, your purchase history, all to help their online retail clients make better merchandise recommendations to you. The Seattle company just raised $2 million. On its advisory board are Dr. Peter Norvig, director of research for Google, and Dr. Andreas Weigend, former chief scientist of Amazon.com.

You’re familiar with Amazon.com’s recommendation feature: “People who bought this book, also bought these books.”

Aggregate Knowledge is a Menlo Park start-up offering such a recommendation service on a mass scale — to any Web site. But it does Amazon one-better by watching consumer reading patterns online, and giving recommendation feedback immediately. (Amazon updates its recommendations once a month)

By all accounts, AK is doing very well. It started in April, and is already making $2 million in annualized revenue, according to chief exec Paul Martino. Tomorrow, it will announce it has won $5 million from Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers. First Round Capital and others invested $500,000 in an earlier seed round. It employs 21 people, up from three in April. Recommendations are hotter than many people realize. Amazon says 35 percent of product sales result from recommendations. Martino, formerly at Tribe, said he noticed the power of recommendations while working at his previous company, Tribe — and thus his decision to launch AK.

We last wrote about AK here

Overstock.com is one of several sites that have implemented it. Shoppers of a gift basket (see image below), will see items that previous readers have gone on to view after viewing that item — saving users time, and helping them get to their likely destination quicker — since AK knows what previous readers ended up viewing.

In his earnings call last month, Overstock’s chief executive Patrick Byrne says integration with AK was easy, and that it’s providing a “nice, measurable lift” despite being up only a few weeks.

AK offers the service for news sites, too: It links to articles that previous readers of the same article went on to read. It also helps find more relevant ads, tracking which ads are popular based on the behavior of past viewers. This is where AK hopes to beat Google. Take, for example, a reader of Fox Sports, who learns their team going to the Super Bowl. Google might offer an ad for ticket merchant RazorGator. However, AK would skip RazorGator altogether and offer a way to buy Super Bowl tickets directly. In other words, it will offer an ad, a product, or a service - depending on what the reader is most likely to want, based on previous behavior. AK tracks click streams during sessions on a Web site; it does so anonymously, aggregating data so it knows what readers are most likely to do.

AK gets paid based on performance. If the customer is a news site, AK gets paid for increasing page views. If the customer is a product site, AK gets paid if it sells more products.

AK takes several days to customize its product for sites. By first quarter next year, Martino tells us, he wants to make it plug and play. VentureBeat, for example, could get a widget that allows its readers to see what other readers have also read. Sphere does something similar now. See the “Sphere it” button at the top of this article. If you click it, you’ll see mostly other blog related material. However, Sphere’s recommendations are based on related sites and content, not necessary on where people have actually gone.

AK’s competitors include Boston’s ChoiceStream. Its software reportedly takes longer to deploy. Loomia, of San Francisco, is another player.