Los Angeles Business Journal

News Personalization Service Clicks With AOL

Internet: Online giant pays $90 million for startup Gravity’s technology. By Tom Dotan Monday, February 3, 2014

Gravity Inc., a Santa Monica startup that offers a content personalization service for news sites, last month was acquired by New York’s AOL Inc. for $90 million in cash.

Connecting Gravity’s technology with a massive online publisher such as AOL, which owns a large portfolio of sites including Huffington Post and TechCrunch, sheds light on how news will look in the near future.

Gravity sells a technology that recommends articles based on what it concludes would most appeal to an individual reader. It can both track a person’s browsing habits as well as parse an article’s content to build a map of overlapping interests; the combined profiles are used to create a so-called interest graph.

In effect, what Gravity creates is a version of the Internet that’s tailor-made to your tastes.

As Gravity co-founder and Chief Executive Amit Kapur explained, this acquisition was the ideal meeting of AOL’s needs with his company’s ambitions. That includes getting access to the trove of AOL’s owned sites.

“There’s a network effect that results from a broader diet of content,” Kapur said. “The quality of our interest graph improves the more websites we’re on and the bigger our network gets.”

At its core, Gravity’s technology is a digital profiler. The concept is not too different from ad tech, in which banner ads are targeted at people deemed to be the best fit.

What makes Gravity and its competitors, including New York’s Outbrain and Taboola, different than traditional ad tech is an added layer of artificial intelligence.

“Historically, targeting has put people into large buckets. A group of 1 million people are grouped into an advertisement for one car,” Kapur said. “Our audience segments are buckets of one.”

To reach that level of precision, this technology has to map out the focus of an article and then trace an outwardly spiraling web of related topics. For example, a basic reading of an article about surf spots in Hawaii would be referred to anyone who’s recently shopped for surfboards on Amazon.com. But a more complex analytical spider web would also catch people who have shown interest in waterskiing, snowboarding or even are from California.

“It’s comes down to the ability to create the same abstractions the human mind would,” Kapur said. “We’re finally at a point where we can do this kind of analysis at scale.”

Kapur, former chief operating officer at MySpace Inc., co-founded the company in 2009 along with several other former executives from the social network. It has since raised $20 million in funding in Series A and B rounds, with investments from Redpoint Ventures, August Capital and Santa Monica firm Upfront Ventures. The exit was first announced on the tech site Recode in an interview with AOL Chief Executive Tim Armstrong.

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