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Co-founder talks about how the Web guide plans to make money, and its profit goals by 2010
You've heard of sponsored listings, but have you heard of widget listings?
Probably not. That's because it's a new concept being introduced by Kosmix, an alternative search engine seeking to help users browse the Web.
In this interview, Kosmix co-founder Venky Harinarayan talks about how Kosmix plans to monetize its service through sponsored widgets. Every module on Kosmix's site is a widget, said Harinarayan, referring to sites, such as Google, YouTube, Wikipedia and Flickr, that Kosmix aggregates for information. To this end, "[advertising] Widgets fit more naturally with the site's paradigm," he said. "If you're looking at digital cameras [for instance], Sony can give you a rich widget [with offerings]." (See past interviews with Harinarayan below)
Interesting idea, and certainly novel. But the size of a widget alone makes it prohibitive to have as many widgets on a page as there are sponsored links. This means there are potentially fewer advertisers per topic. Indeed, this is why the widget sponsor pricing will be a combination of CPC (cost per click) and CPM (cost per thousand views), and not just CPC, Harinarayan explained.
But getting high CPMs shouldn't be difficult, he suggested.
Because Kosmix is part search, people who are searching for topics are showing their "intent," he said. Essentially, by being able to show advertisers that users viewing a certain topic are "intent" on finding information, an advertisement may actually be more effective than say when a person is on a social network and oblivious to content beyond the activity a person is engaged in.
Additionally, if a marketer chooses to place a sponsored widget on a specific topic, Kosmix will come up with related topics to place that widget, thereby giving marketers broader reach.
Besides talking about the Kosmix model, Harinarayan also said that the goal for Kosmix, which recently raised $20 million in venture funding, and $55 million in total since 2005, is to get to cash-flow positive.
When will that be? I asked.
Harinarayan declined to comment, only to say that he'd be very disappointed if the company weren't cash-flow positive by 2010.
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Kosmix was acquired by Walmart in May of 2011 to create @WalmartLabs.
Through the innovative fusion of retail, social and mobile, @WalmartLabs is redefining Commerce for the largest retailer worldwide. We are a group comprised of the brightest technologists and businesspeople in the industry, excited about the limitless opportunities that this next generation of Commerce will bring to billions of people around the globe, all in an effort to help them save money and live better.
Kosmix was funded by Time Warner Investments, Accel Partners, Lightspeed Venture Partners, Dag Ventures, private investor Ed Zander and Jeff Bezos' personal investment company, Bezos Expeditions.
WalmartLabs is hiring.