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Injecting Ads Into Widgets
"On the surface, it seems like a risky idea because what if
[users] don't want advertising in their widgets?" Slide's Max
Levchin said. He concluded his idea would only work by making
all the ads "user-initiated" -- that is, the marketing messages
only appear if users voluntarily choose to blend a marketing
campaign into their own personal widgets.
Max Levchin already changed electronic commerce as a cofounder
of PayPal, an online payment service that is expected to process
more than US$40 billion in transactions this year.
Now, he's tinkering with a new way to make money off Internet
widgets -- high-tech shorthand for the mini-applications planted
on the personal pages of online social networks and other
popular Web sites like Google (Nasdaq: GOOG) Latest News about
Google.
Levchin's latest startup, Slide, has emerged as the No. 1 widget
maker so far, largely because its programming tools have made it
easy for people to add more pizazz to the pictures and videos
decorating trendy hangouts like MySpace Latest News about
MySpace, Facebook and Bebo.
A Potentially Slippery Slope
Hoping to cash in, the 32-year-old Levchin is pushing Slide down
a potentially slippery slope by injecting advertising into the
mix.
"On the surface, it seems like a risky idea because what if
[users] don't want advertising in their widgets?" Levchin said.
He concluded his idea would only work by making all the ads
"user-initiated" -- that is, the marketing Email Marketing
Software - Free Demo messages only appear if users voluntarily
choose to blend a marketing campaign into their own personal
widgets.
Levchin and Slide's senior advertising director, Sonya Chowla,
insist the approach isn't as kooky as it might sound. After all,
they point out that consumers for years have willingly become
walking billboards by buying clothing promoting the brands of
major corporations like Nike and Coca-Cola.
Given that behavior, Chowla doesn't think it's that much of a
leap to assume people will turn their widgets into platforms for
showing off a trendy cell phone or attaching links to hot movies
and television shows.
"We are really good at getting people to take things and include
them on their social networking pages," Chowla said. "We think
we can persuade our users to become brand ambassadors."
Steering Friends and Family
Lisa Weinstein, a managing director of ad agency MindShare, said
Web surfers have proven they will distribute advertising online
by steering their friends and family to commercial clips posted
on YouTube Latest News about YouTube.
For the approach to work with widgets, advertisers and their
agencies "will have to do it in a way that adds value to the
experience, rather than interrupting or disrupting it,"
Weinstein said.
The initial list of major advertisers hoping to get their
commercial inserted into Slide's widgets include Viacom's (NYSE:
VIAb) Latest News about Viacom Paramount Pictures, AT&T (NYSE:
T) Latest News about AT&T and Discovery Communications'
Discovery Channel.
As widgets are melded into more Web sites, they are becoming a
more attractive target for advertisers looking to connect with
consumers who are spending less time watching television,
listening to the radio, and reading newspapers and magazines.
In May, 221 million people worldwide saw at least one Internet
widget, according to the latest data from the research firm
comScore Media Metrix. Slide's toolbox of widgets, bearing names
like "Slideshows," "Funpix" and "Skinflix," was the market
leader with nearly 129 million viewers worldwide.
'A Big Step Toward Maturity'
San Francisco-based Slide largely is piggybacking on the rapid
growth of social networks, where its widgets are commonly
deployed. News Corp.'s MySpace attracted 114 million worldwide
visitors in June, a 72 percent increase from last year, while
Facebook drew 52 million, more than tripling from the prior
year, Media Metrix said.
Levchin launched Slide in early 2005, a couple of years after
online auctioneer eBay (Nasdaq: EBAY) Latest News about eBay
bought Paypal for $1.5 billion in a deal that turned him into a
multimillionaire.
Slide hasn't turned a profit yet, subsisting so for on an
undisclosed amount of money raised from a group of investors
that includes PayPal's former chief executive, Peter Thiel, and
one of Silicon Valley's best-known venture capitalists, Vinod
Khosla.
If Slide's advertising ambitions pay off, Levchin hinted that
the company might be in a position to sell its stock in an
initial public offering as early as next year.
"Widgets aren't just about fun and games," Levchin said. "This
is a big step toward maturity for us."
--By Michael Liedtke
AP
08/11/07 4:00 AM PT
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