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

Over time, Gravity has partnered with a number of publishers including Conde Nast, Walt Disney Co. and Yahoo Inc. (Sources said that at the time of the acquisition, Gravity had also been in talks with Yahoo.)

The company makes money by interspersing sponsored content – otherwise known as native advertising – into the story recommendations. In 2013, Gravity announced it tripled revenue over the previous year, although executives would not disclose specific figures.

As part of the arrangement with AOL, Gravity will be allowed to continue its partnership with outside publishers, and Gravity’s team of about 40 employees will remain in the Santa Monica; New York; and Fort Collins, Colo., offices.

Brian Fitzgerald, the president of Culver City online publisher Evolve Media, sees the acquisition as a way for AOL to get into the personalization game without paying top dollar for Gravity’s larger competitors.

“For AOL, this was a smart, strategic acquisition,” Fitzgerald said. “They couldn’t have afforded the other guys so I think they went for the smaller guy thinking we’ll use this across our network.”

While tracking technology has always triggered privacy concerns, there are editorial worries as well. Some have complained that keeping all content targeted strictly to people’s tastes would be limiting.

Kapur conceded there is a possibility of “niching out” broad content, where an overly curated layout creates a blinkered readership. But that would be personalization done wrong.

“What we do is combination of stories they have high personal interest in and stories that are generally trending,” he said. “We attach editorial weighting and rank some things more highly than the others.”

The biggest knock against this type of Web personalization could simply be that the technology just isn’t good enough. Unlike ad networks, which can span many different sites, publishers are comparatively small. Even with the advantage ad tech has with data collection, they only occasionally hit their marks.

“I don’t think content is even going to get to that level,” Fitzgerald said.

Kapur remains more sanguine.

“There’s an explosion of content happening across the Internet and sifting through the haystack for needles is overwhelming,” he said. “Instead of you having to find the best content on a site, soon the site will search for you.”

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