Injecting Ads Into Widgets

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) .

Levchin’s latest startup, 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
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 

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) Paramount Pictures, AT&T (NYSE: 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) 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." 

© 2007 Associated Press. All rights reserved.
© 2007 ECT News Network. All rights reserved.

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