(Adds background on advertising market)
By Georgina Prodhan
LONDON, April 16 Technology start-up OpenX
launched an online ad marketplace for smaller Web publishers on
Thursday designed to be an alternative to offerings from Google
(GOOG.O), Microsoft (MSFT.O), Yahoo (YHOO.O) and AOL (TWX.N).
OpenX Market aims to make it easier for advertisers to find
smaller Web publishers as the number of sites run by individuals
and small organisations with niche audiences balloons, and to
help those small publishers maximise their advertising revenues.
OpenX, backed by Index Ventures and Accel Partners, runs
more than 300 billion page impressions a month through its
software from a network of about 150,000 websites, putting it in
the league of the likes of Google's DoubleClick in terms of
Google bought DoubleClick for $3.1 billion in 2007, part of
a multi-billion-dollar wave of ad-server company acquisitions
that included Microsoft buying aQuantive, AOL buying Adtech and
WPP (WPP.L) buying 24/7 Real Media.
"Now the space is very concentrated, which makes it really
good for us to be an independent option in the market," OpenX's
Chief Executive Tim Cadogan told Reuters.
Cadogan, an industry veteran who formerly ran Yahoo's search
business, said OpenX's open-source software that publishers can
easily customise was another attraction.
OpenX's new platform stages real-time auctions for online
advertising spots, allowing publishers to take advantage of
higher bids until the last second. It is likely to appeal most
to small publishers, but scalable for large enterprises too.
The Internet is the only medium expected to attract higher
advertising revenues this year -- although growth is slowing --
as most companies slash discretionary spending on activities
such as marketing to cope with the economic downturn.
In a report released this week, media agency ZenithOptimedia
forecast that global advertising spending would fall 6.9 percent
this year, but spending on Internet advertising would rise 8.6
percent, down from 20.9 percent growth in 2008.
But mechanisms to link advertisers with online properties
are still developing, and made more difficult by an explosion in
the number of websites in existence.
AOL, for example, is embarking on a strategy of creating a
plethora of niche websites through automated methods on which to
place ads, partly through its own ad platform. It has called
this "leaning into the fragmentation of the Web."
Cadogan says: "Synthetic creations can be pretty good, but
there's something about that organic trend also of consumers
creating sites about topics they're passionate about that
creates real value."
OpenX, formerly known by a succession of other names
including Openads, has developed its ad server through the
open-source developer community over nine years, and has raised
$20.5 million in two rounds of funding so far.
Cadogan said the company had not received any takeover
approaches since he became CEO a year ago.
(Editing by David Cowell)