Quigo Brings Home the Bacon, 5min for $5M, TransChip Makes an Exit, Refresh 07

The man who reads nothing at all is better educated than the man who reads nothing but newspapers.

Thomas Jefferson (1743 - 1826)

1. AOL buys Quigo for $340M. Yaron Galai and Oded Itzhak (featured on VC Cafe in the past) are probably happy to be part of AOL's web advertising network. The deal adds about 100 employees to Time Warner's AOL, and follows a series of acquisitions in the ad space including: ad network Advertising.com; Tacoda, which targets users based on their habits; wireless ad network Third Screen Media; video ads company Lightningcast; and ADTECH, a global ad-serving company. Is more Israeli M&A to follow? [via AP]
   
   
2. Life VideoPedia 5min, a 'how to' video sharing site, (previously covered here) raised a $5M round from Spark Capital. This round follows a pretty major dilution for the founders, following 5min's initial angel round of $300K. Get a taste of the competition at Graspr.com. [via Techcrunch]
   
   
3. Samsung Electronics made their first acquisition in ten years - Samsung paid $70M for none other than TransChip Israel Ltd (Tanschip's old URL links to Samsung). Samsung spokeswoman Lee Eun-hee said TransChip would be renamed Samsung Semiconductor Israel R&D Center Ltd. and will become the Korean company’s 17th research and development centers around the world. [via IsraelPlug]
   
   
   
4. Refresh07 - IDC research has teamed up with Gemini Israel and Genesis Partners to throw the Refresh07, the 'new media' conference. It is taking place in Tel Aviv, Israel on November 21st. The conference will deal with the evolving business models online, their impact on distribution channels and traditional media and content value/ monetization. See the conference page and the Refresh07 Facebook group. [via Israel VC on SandHill Road]
   

Combine the Collective Intelligence - Five Questions to OutBrain's CEO

I recently had the pleasure to "e-meet" Yaron Galai, Co-Founder and CEO of Outbrain, the company behind the voting widget in the bottom of this post.

Yaron was kind enough to answer 5 questions for VC Cafe. Without further ado, see the scoop below.

Question: In simple words, What is Outbrain?

• Yaron: Outbrain is a platform for ratings & recommendations of blog/RSS posts. In ways, it’s similar to Amazon’s “People who liked this also liked XYZ”, or Netflix ratings/recommendations, etc., just applied to blog content.

Question: What problem does Outbrain solve? How?

• Yaron: The problem we’re trying to solve is that of discovery of interesting content. The blogosphere is creating a ton of content everyday, yet there are no tools that help the readers find the most interesting content out there. In *search* mode, when I know what I’m looking for, this problem is solved by search engines. But in *discovery* mode, when I’m just looking for interesting content, there are no tools yet that help me do that.
  
  The best examples are the RSS aggregators – they’re great tools (I love Bloglines!), but at the same time they are completely broken because after subscribing to 10+ feeds I am completely swamped with a firehouse of content without any ability to find the good stuff.

Question: How long did it take to launch the product? What would you have done differently?

• Yaron: We’ve been working on this for about 1 year now. A lot of what we’ve done is behind the scenes and not visible… you’d be surprised how much effort it takes to create a solid ratings system that can correlate similar users and make recommendations based on that…
  
  One thing that I would have done differently is: We initially focused on providing individual users with a browser extension that embeds our functionality in their browser. That was a mistake, because we couldn’t get to a critical mass of data to make the product really useful (classic chicken&egg). We later decided to hold on the individual users and focus first on building a critical mass of data via blogger widgets and a free API we make available to RSS aggregators (like Bloglines). This has started proving itself with 4 RSS aggregators already embedding our API, and a few hundred bloggers signing up for our widget beta.

Question: Plans for growth? are you guys funded?

• Yaron:We’ve announced\na seed round earlier this year. You can read about it on my blog: http://www.webx0.com/2007/05/outbrain_gets_f.html
  
  
  1. We want to become the de-facto platform used for ratings of blog/RSS content. We think there is a ton of value for all players in this space to share data through a common platform. Otherwise no single player can will be able to accumulate enough meaningful data. For example – your posts may be consumed on your blog, but also via a variety of RSS aggregators, and email syndication, etc, etc. By aggregating the ratings from as many of these places where data might be consumed, we think we’ll be able to help everyone make much better reading recommendations.
     
     
  2. Our next phase will probably involve the introduction of some form of advertising based on the data we accumulate. We think there is a great opportunity to offer readers ads that are perfectly targeted to their interests based on how they rated various posts.

Question: What are the 5 services on the internet that you can't do without?

• Yaron: Hmmmm –
  

1. Bloglines
   
2. Gmail/Gtalk/ Google Maps
   
3. Techmeme
4. Del.icio.us
5. Hopstop.com
6. Amazon
   

Outbrain was founded in Israel on June of 2006. It currently has 10 employees and it is located both in Israel and NY. Otbrain's seed round was raised in May this year by LGiLab, GlenRock Israel, and Sigma PCM among others.

If you are blogger, you can download the voting widget here. For more information about Outbrain (including API) check out the company blog.

Quigo, a serious alternative for Google's Ad-Sense, Preparing for IPO

Source: Paidcontent.org

Globes Online reports that Quigo, the NYC and Israel based online contextual ad technology provider, is preparing for a Nasdaq IPO in early 2008.

Quigo has raised $30 million from Institutional Venture Partners, at a company value of $250 million, as part of the preparations for the offering, it says. It closed a $5 million first round in 2004.

By providing a real alternative to Google's ad product, Quigo has earned a place amongst publishing giants such as ESPN.com, Forbes.com, ABCNews.com Time Inc, using a custom-version of Quigo's service across their site portfolio. Time and Quigo estimate ad revenues through this cooperation to be over $100 million in the first three years of the partnership.

The company's flagship product, Ad Sonar is a content-targeted advertising network that connects publishers and advertisers through an auction-based, pay-per-click marketing platform. Using Ad sonar advertisers can see the specific pages on which their ads will appear – usually on the best, most popular sites in their category. The product has been making steady gains in the contextual ad market since 2005.

Quigo was co-founded by Yaron Galai, now the company's Senior Vice President and Oded Itzhak, who developed the propietary technologies.

Below is a recent two-part interview with Michael Yavonditte, Quigo's CEO, courtesy of webmasterworld.com:
Part 1:


Part 2: