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Advertising - Tuesday, April 29, 2008

Adify Finds $300M+ Daddy In Cox Enterprises

Cox Enterprises will pay $300M plus potential bonuses. Investors in the company included Peacock Equity, the venture investment arm of NBC Universal, US Venture Partners, Venrock Associates and Time Warner Investments. Adify had raised a total of $27M in funding in two rounds.

Adify has built an ad server. Those are a dime a dozen but what made Adify unique is that it has focused on providing quasi-private label ad servers to niche publishers that want to expand their ad sales businesses to represent other publishers. So you have sites like Yardbarker, a sports site, that partnered with Adify and is now selling and serving sports ads for comparable sites. Yarbarker and others work a rev share with Adify on the ads served.

We understand why a company like Cox would be interested in Adify. Niche ad networks are hot this year and Adify is the leading proponent. Also, if it was only businesses like Yardbarker that bought into Adify that would be one thing but big brands like Forbes and Martha Stewart have bought in.

On the other hand, everyone that we have talked with considers this to be a dicey move. Adify is not profitable and doesn't claim impressive revenues and impressions. Plus reviews of its technology suggest that it has a ways to go to compete with other ad servers. Moreover, Google, Tribal Fusion and others have launched free ad servers.

CEO Interview

The story was originally posed by PaidContent.

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