November 06, 2006
By Brian Morrissey
NEW YORK Jim Barnett knows the perils of competing with Google. He saw firsthand how the company’s mastery of search vanquished early leaders like AltaVista (where he was CEO) and Excite.
Now, he’s striving to take on Google in the online advertising realm, where the Big G boasts the Internet’s largest ad network via AdSense, a system that puts links and banner ads on thousands of Web sites.
Despite AdSense’s success, Barnett believes the system has plenty of flaws, and he’s betting his new venture, Turn, will be able to take advantage of those weaknesses.
“It’s exhilarating,” Barnett said of the upcoming fight against Google. “They’re very good competition.”
San Mateo, Calif.-based Turn in recent months has attracted $18 million in venture backing from Norwest Venture Partners, Trident Capital and Shasta Ventures. Turn has about 1,000 advertisers in its system, which displays ads on approximately 30 sites.
Unlike Google, which charges advertisers on a per-click basis, Turn relies on a cost-per-action scheme. It charges advertisers only if users take desired actions, such as filling out registration forms or closing on sales. (A marketer such as Starwood, for example, could bid $20 for each hotel night booked, $3 for every e-mail sign-up and 75 cents for each site visit.)
Turn hopes to appeal to advertisers unhappy with poor conversion rates from their contextual campaigns and frustrated by the complexity of compiling keyword lists.
Turn has another key point of differentiation: It analyzes 60 factors to decide which ads to show users, weighing variables such as past behavior, publisher demographics, copy contents and brand quality. The system shows either text listings or display ads, choosing the option likely to yield the most revenue, Barnett said.