Monday, November 8, 2004

Internet

Chitika chases down right ads for sites

By Christina Torode

Startup Chitika Inc.'s web-based advertising search service is ready for prime time says the company.

The company, led by former Terra Lycos data mining scientists and engineers, introduced earlier this year patent-pending technology that searches advertising networks for the most appropriate ads to be used by website publishers.

Since then, Chitika says it has signed deals with 10 advertising networks, including FindWhat.com, ePilot, Commission Junction, Enhance Interactive, and Espotting. The company now estimates it's serving up more than 50 million ads per month to hundreds of website publishers, and the companies that serve them.

Chitika is also generating revenue, according to chief executive officer Venkat Kolluri, who self-funded the Shrewsbury-based company along with the other Terra Lycos executives.

"Now that we have the technology, partnerships and customers in place we think the venture capital and angel investor community will be receptive to talking with us about the potential of our company," said Kolluri.

The technology behind the service, dubbed RealContext, analyzes the content on individual websites, then searches for ads based on the content found on the page or site, such as keywords like "travel" or "health."

The engine then searches through 500,000 ads housed in its advertising network partners' databases for the most relevant advertisement, and displays the ad on the site as the site or web page is loaded onto a visitor's web browser.

The on-demand service doesn't cost website publishers a dime, and Chitika actually shares revenue with the publisher for using its service.

Here's how it works. Advertisers pay advertising networks based on clicks per ads with a bonus for click-throughs that result in a sale or user registration. If the advertiser pays the advertising network $1 per click, for example, the ad network partner pays Chitika 50 cents. In turn, Chitika gives 30 cents per click to the publisher, and keeps 20 cents per click.

"The service is free to publishers, but it also takes away the frustration of dealing with all the different payment models and rules of the advertising networks, advertisers and other ad search services that only let you choose a single topic such as travel ads, said Kolluri.

"All they have to do is let us put one line of code on their web page and we find the right ad from a wide variety of topics based on the content on their site, even as that content changes."

Toolbar creation service provider Web Toolbars, owned by Cybertonic Co. of France, is using Chitika's search engine to power the advertising behind its new TagCash.com service, which broadcasts web toolbars on publishers' web sites.

"Our publishers are paid for every web toolbar shown, so we absolutely needed a service that would display the most relevant ads of interest to the visitor in order to generate as many clicks as possible," said Carillo François, chief executive officer of Web Toolbars.

To see which advertisements are effective and attracting visitors, Chitika's search engine also sends reports to the site publishers. Other features include flagging visitors' countries of origin in order to bring up ads designed for that particular audience.

The company has five employees in its Shrewsbury headquarters handling technology and business development, and five employees in India running the back-end engine.