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Technorati CEO Richard Jalichandra helps us evaluate Graspr and Kontera
In this Vator Box, we added a new segment. It's called the Liquid Scenarios Minute. In this minute, we look at total funds raised for both companies, and Liquid Scenarios provides an estimated valuation and exit analysis for both companies. The startups under the microscope this week are Graspr and Kontera, two companies that are the starting point to a broader discussion of the how-to video and in-text advertising industries.
Who better to help us evaluate a content company and an advertising company and their industries, but someone who has a lot of experience in both. This week, Richard Jalichandra, Technorati CEO, formerly at content site IGN, and an expert in online advertising, helps us look at the opportunities for Graspr and Kontera.
Graspr is a Draper Fisher-backed video how-to site, with some 20,000 videos in its library, and 2,000 partners that it syndicates to. Kontera is a Sequoia Capital-backed in-text advertising company that links ads to keywords in articles. As one scrolls over those highlighted words, an ad pops up.
We started with Graspr. We all liked the pitch. Teresa Philips, the founder and CEO in the video pitch, does a great job articulating her vision and mission. But both Ezra and Richard questioned whether there was an opportunity to create venture-sized returns. "There's some great long-tail opportunities," said Ezra. "But is this a billion-dollar business or a midsized, interesting content company?"
"I love the how-to market," said Richard. It's a great vertical and there are clearly endemic advertisers, he said. "The issue becomes, there are a few other entities doing something similar – everything from YouTube, to Howstuffworks." Indeed, it is a busy space. In the how-to category, there's also ExpertVillage and Instructables.
All three of us agreed that Graspr was doing the right thing by syndicating its content aggressively. And, at the end of the day, there is a roll-up opportunity here, said Richard. So, if Graspr does well, it might be a contender to be bought out.
Liquid Scenarios estimates that Graspr raised money at a pre-money valuation of $5 million.
We then turned our sights to Kontera, a company that provides in-text advertising. We all agreed that in-text advertising was very novel. It's pretty nascent, and it's only a $100 million yearly business. Ezra and I both agreed, however, that it was tough to get people to click onto an advertisement while they were reading. "The trick with any kind of online advertising is the context of the consumer," said Ezra. "The whole game is are you getting the consumer in the right moment for making the right decision... the trick for these guys is they're in the middle... When someone is looking for something versus reading an article, they're in a different mindset."
And, the links in the keywords may actually be annoying, especially if they're not relevant.
But Richard, while at IGN signed up for Vibrant Media - a competitor to Kontera - said that in-text ads worked quite well, depending on the vertical. For gaming sites, in-text ads seemed to work.
The upside is that there are probably only two players in the market, he added. The downside for Kontera is that Vibrant Media (the other player), probably has a larger market share, he said.
Richard and Ezra believe that Kontera has a great shot at being acquired, given the demand for advertising networks. The successful exits by Right Media, Blue Lithium, Quigo, etc. in this space augur well for companies playing in it, Ezra said.
Added Richard, Kontera will likely do fine with blue-chip Sequoia Capital as its backer.
Liquid Scenarios noted that Kontera raised $17.3 million in total, and that its pre-money valuation at its last round was between $34 million and $41 million.
Don't forget to watch the show to get the Liquid Scenarios exit analysis for both companies!
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Related Companies, Investors, and Entrepreneurs
Joined Vator onGraspr is an online video community that offers high quality instructional content on a wide range of topics. Our mission is to make the world a smarter place by bringing together people who possess different kinds of expertise, and helping them share what they know with others. We want to make knowledge more accessible, and thus empower users to explore new interests, cultivate new skills, and become even more proficient in the subjects they know well.
Graspr offers a number of features designed to enhance learning, connect people, and facilitate the discovery process.
At Graspr, you can:
- Find videos on specific topics that match your interests and skill level. Search by keyword, search by Producer, or browse our videos by category.
- Control your viewing experience. With Graspr's 'Scene' feature, you can jump straight to the parts of a video that interest you most.
- Take notes. Add your own notes to a video - and keep them private or share with the Graspr community.
- Rate and comment on videos. Your input helps other users make informed choices about which videos are best suited to their needs.
- Share videos. We make it easy to send videos to friends or embed them on other Web pages.
- Control distribution. Choose to share your videos with the entire Graspr community, or just with your friends.
- Connect with people who share your interests. You can chat with others who are viewing similar content and swap stories, share tips or seek advice.
- Impart your wisdom. Have specialized knowledge of your own? We invite you to share it with the Graspr community by uploading your own instructional videos.
Joined Vator on
Kontera is a leading provider of In-Text contextual advertising and information services based on patent-pending technology that maximizes relevancy and yield for online advertisers, publishers, and users.
The company’s flagship product, ContentLink™, identifies contextually relevant keywords on a publisher’s webpage in real-time and automatically matches them to relevant ads and information. Kontera's ad network encompasses thousands of publishers using ContentLink ads on websites, forums and blogs, for generating revenues from their content while providing relevant ads and information to their users.
Leading international advertisers in a broad range of product categories benefit from improved ROI on their Pay per Click Advertising Campaigns with Kontera's ContentLinks. Kontera ensures optimal relevancy between ads and users' online experience by serving ads and information that suit the user's frame of mind.
Kontera´s Online Advertising Program is based on advanced patent-pending technology which enables real-time analysis of static or dynamic content. The company has developed proprietary semantic, statistical, linguistic, and yield maximization algorithms, which analyze content, select keywords and then match them to the most relevant contextual ads and information. Kontera's competitive edge and ability to best serve its partners stems from its advanced technology, wide range of eminent advertisers, vast network of publishers, and years of experience in the In-Text Advertising market.
Kontera was founded in 2003 by co-founders Yoav Shaham, Assaf Henkin, and Henit Vitos with the vision of providing relevant information to users at the point of context. Kontera is a privately held company backed by Sequoia Capital, Lehman Brothers and Carmel Ventures, with offices in San Francisco, California New York, New York and Herzliya, Israel.