OpenAds, the cure for the common online advertising cold

(Credit: Matt Asay)

I spent an enjoyable dinner last night with Scott Switzer, CEO of OpenAds. I've written about the company/project before, but I continue to be more and more impressed. As Scott noted in the course of our conversation, in the not-too-distant future open source will be the default way to develop and deliver software. Of course it will. The efficiency gains in its favor are simply too great.

What happens to you when you finally grok this? It changes completely the way you build a business.

Scott spends his time on things that vastly differ from his competition. He described one competitor as "filled with attorneys." Why? Well, to protect the company's intellectual property (IP), of course.

Contrarily, OpenAds focuses on gathering the best development team on the planet, both inside and outside the company. Community is the new IP. OpenAds actually wants people to use its technology. All of it.

See how this changes the value equation?

In fact, over the course of our nearly three-hour long dinner, we never once talked about IP. No mention of pilfering competitors or customers. Instead, we talked about how to deliver value to customers in ways that give our competitors fits. You can't imagine how gratifying it is to give away (for free as in freedom and for free as in beer) technology while still making grundles of money.

In OpenAds' case, this means returning money to websites. A proprietary model like Doubleclick's (now Google) can take 40-50% of advertising revenues from a website, right from the start. Kiss it goodbye. OpenAds takes none of that, preferring instead to make up this "loss" in volume. By charging a dramatically lower amount to advertisers (to help them find publishers/inventory), OpenAds makes a great business without putting web properties out of business.

It's small wonder that some web heavyweights (websites you use to get news, interact with friends, etc.) use OpenAds, just as these same properties build their infrastructure with MySQL and other open-source software. Why waste money on licenses/gating fees to real value?

This trend has only accelerated with Google's acquisition of Doubleclick. The web doesn't want to be owned by one company, no matter how "not evil" it may be. People want choice, and with OpenAds they get choice in spades.

OpenAds is one of the top open-source companies to watch. You see truly disruptive projects like OpenAds, Ubuntu, etc., and you weep with pity for the Old World of software. Well, I do. For all of 5 milliseconds.