Profile: Lookery

New ad outfit targets social-networking sites

Information
in a user’s profile may or may not indicate that they intend to buy
something, but companies are willing to experiment.

By Yi-Wyn Yen, Fortune



(Fortune) — Figuring out how to sort through personal profile pages to target ads has become a top priority for both MySpace (Charts, Fortune 500)
and Facebook. But in the new California gold rush to turn valuable
information that people reveal about themselves into advertising
dollars, lesser-known social networking sites are getting left behind.

Next
month entrepreneur Scott Rafer plans to launch a new ad network,
Lookery on the Web, that will rent out data it gathers from smaller
social networks and market it to developers and other companies.

"Getting this kind of data is a marketer’s dream. What we do is
aggregate the data to show, say, women in their 30s who live in San
Francisco with pets," says Rafer, Lookery’s CEO and co-founder.
"Getting a more detailed understanding of who your customers are makes
your business healthier."

 

 

Lookery, which started as a
Facebook-specific ad network in July, may soon be competing with
Facebook at its own game. Mark Zuckerberg’s startup reportedly plans to
kick off its own ad network this fall to let advertisers target
Facebook users. Lookery suspects that Facebook will go a step further
and rent out its demographic statistics to other sites, meaning what
happens on Facebook won’t stay on Facebook for long.

"This is
what everybody believes they’re working on. If Facebook wants to be the
next Google, they’re going to have to make a lot more money than they
are now to take the company public," says Rafer, the former CEO of
MyBlogLog, which was acquired by Yahoo (Charts, Fortune 500) for a reported $10 million in January. "If this is how Facebook is going to monetize, we need to get in the game, too."

Lookery
and Facebook both hope a better understanding of the general behavior
of social network users will help advertisers target the right online
audiences. But not everyone’s convinced that jumping on the behavioral
targeting bandwagon will lead to significant profits.

"The
profile information that’s available on Facebook or any other social
networking site doesn’t mean your click through rate will be higher,"
says Andrew Chen, an entrepreneur-in-residence at Mohr Davidow
Ventures. "It’s really important to not confuse, ‘I’m interested in
cars or skiing,’ versus ‘I’m about to make a transaction.’"


Of course this hasn’t
stopped major players from following Facebook’s lead. MySpace is
developing new software to allow customized ads for its 110 million
active users. Microsoft (Charts, Fortune 500) is considering buying a 5 percent share of Facebook, and last week TechCrunch reported that Google (Charts, Fortune 500) plans to unveil an open-source platform for Orkut and iGoogle in November to compete with the top social networks.

So
while the major players are busy gathering data on their own users,
Lookery plans to hit up sites like Bebo, Dogster and Hi5. Lookery,
which has served 250 million ads on Facebook since it launched in July,
has no plans to run ads on other social networking sites.

Instead,
it will pay the sites to collect its social network data and then sell
it elsewhere. Says Rafer, "It starts off as worthless data. But when
you put it all together, it turns into something really valuable."

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