February 14, 2005 9:00 PM PST
Firm formerly known as Gator looks for credibility
The privately held company, which postponed its public offering last year, is launching a new marketing division and advertising service to migrate from hawking its signature pop-up advertisements to selling behaviorally targeted display ads. If it has its way, the ads will appear on publisher pages across the Web, reaching as many as 200 million people.
To address the privacy implications of such an ambitious service, Claria has also hired a team of experts to ensure it meets industry and consumer clearances. Claria plans to announce partners and introduce the service, called Behaviorlink, in April.
"Behavioral advertising is the next big thing after search," company CEO Jeff McFadden said in a recent interview, referring to the booming, multibillion-dollar ad business connected to Web search properties like Google.
The desired shift would fulfill a vision McFadden has had for Web advertising since he started Claria six years ago, but which was derailed in the dot-com bust. He foresaw an ad network that could monitor Web surfing behavior and then deliver ads based on people's interests--much the way early DoubleClick and Engage ad networks proposed to but failed to deliver on because of privacy concerns and technology limitations. Claria, which turned itself into a pop-up adware purveyor, was similarly foiled, but with a host of lawsuits.
More than three years ago, Claria (then known as Gator) sparked a furor among online publishers with its practice of covering up their ad banners with its own. The Washington Post, The New York Times and Dow Jones, among others, sued Gator for covering their Web pages with its own ads, claiming the company violated copyrights and stole revenue in doing so. The suit settled out of court, but Claria has fought to clean up its image since, even by changing its name.
Claria now essentially wants to do the same ad swapping, but with publishers' permission. The selling point: Behaviorlink would allow Web site owners to share in the profits of Claria's targeted ads.
Claria develops advertising software that's bundled with and supports free software such as peer-to-peer application Kazaa. (Roughly 40 million people have installed the software.) Because Claria tracks people from an omniscient point on the desktop without recording personally identifiable data, it can make note of Web preferences and shopping habits, and send timely pop-ups ads. For example, it will send a pop-up coupon from 1-800-Flowers.com while a consumer is preparing to buy a bouquet from FTD.com.The company wants to expand on this model by first growing its audience. Its new division, Vista Marketing Services, will be charged with forming relationships with application makers (i.e., toolbars, media
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