LivePerson Guide Site Buys Web Analytics Firm NuConomy For $3 Million

NuConomy LivePerson Logos

Advice site LivePerson has acquired Israeli web analytics company NuConomy for $3 million, Techcrunch reports, citing an unidentified source and a rumor on an Israeli website. No comment yet from the two companies. Tel Aviv-based NuConomy has raised roughly $3.3 million since launching about four years ago.

In early 2008, WPP Group became one of its backers. New York-based LivePerson, which has been pursuing an About.com-like model of having individual experts provide advice, has made a previous acquisition in Israel. In June 2007, LivePerson bought Israeli psychic online readings site Kasamba.com for $40 million. It’s not clear how NuConomy would fit into LivePerson’s holdings, but engagement metrics is in wide demand by online media companies these days, so it could represent a good way for LivePerson to expand its ties to other sites.

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Why I Won’t Invest in Avid Life Media

Jason Calacanis, the notorious web entrepreneur of Weblogs, Inc., and Mahalo fame, recently raised a flap by telling everyone to boycott comScore and indeed, to sell or short-sell its stock. I'm glad I came to my senses and decided not to get caught up in that catfight, though I sometimes have questions about the accuracy of comScore's numbers (which is the real point needing more sophisticated debate, but also more transparency on comScore's part).

Observers have been quick to distance themselves from Calacanis, but in fact this underscores an important point: bloggers, journalists, and company owners in the space are afraid to agree with Jason because they perceive some kind of threat of being ostracized or singled out in some way.

Watering down the fervor just slightly, I won't tell you what to do, but I'll tell you why I won't invest in the following growing Canadian digital media company when it goes public.

Avid Life Media, the notorious owner of infidelity dating website AshleyMadison.com, is looking to raise $60 million through an initial public offering on the Toronto Stock Exchange.

As much as many investors and underwriters will have turned up their nose at the share offering for moral or optical reasons, what it really comes down to is that you're buying into the people who run a company, and their attitude towards risk. You're also trying to gauge their likelihood of telling the truth, the whole truth, about the business and how it operates -- now, and in future years.

That's why I noticed the part of the story that states that part of the deal would involve a merger with Moxy Media, "an online advertising sales company based in Guelph, Ontario." Moxy Media is made to sound pretty big: $192 million in revenues in 2009, dwarfing Avid's $30 million.

The combined company plans to go public using the RTO method, finding a shell company already traded on the exchange.

Moxy Media's predecessor, TrueLocal, is legendary in the industry for making a lot of short-term money on something called "click arbitrage". Hint: what you found at the home page of TrueLocal had nothing to do with TrueLocal's actual business. Like their successor, the new, improved, Moxy Media, TrueLocal had a network of 300 websites (or actually, more like 3,000) "each providing consumers with information and access to products and services," as the Moxy Media site states. Meaning: TrueLocal built topical pages of (largely Yahoo driven) paid links, sending inexpensive Google AdWords clicks to pages that were well-engineered to create a high proportion of clicks on ads. Those ads would eventually get a user to a paying advertiser's website; vendors like fireplace manufacturers and bridal gown retailers would be typical targets.

For years, Google's top management has been against these "click arbitrageurs," because the user is being deceived and ultimately winds up dissatisfied with the extra clicks it takes just to find a vendor. All the extra clicking created revenue for Google, Yahoo, and TrueLocal alike, but at the price of dissatisfied users and dissatisfied Yahoo advertisers (at least, those who twigged to the problem).

In addition to that, arbitrageurs, like many affiliates, are "lowballers" in the Google AdWords system. They only wish to advertise if they can get a click for a very cheap price. Google's landing page and website quality guidelines were designed almost entirely to scrub such advertisers from the system, especially in the most mature market (the United States). While lurking in the sub-30-cents click arena, the arbs & affiliates can clog up Google's system with an incredible amount of data as they're willing to bid on pretty much unlimited numbers of keywords.

Few in the industry know the TrueLocal story, so even fewer are bound to look twice at the (cleaned up, less arbitragey, but still boilerplate) Moxy Media sites and question whether the story told about them is accurate.

Much the same as the owners of the company might have called Gator/Claria a "targeted contextual advertising product of an opt-in nature" (that company, once on track for a big IPO, went the way of the dodo when it proved closer to true that the industry saw Claria as a "scumware" company), or, for that matter, the owners of AshleyMadison.com might call their website "a dating site for funsters who just happen to be of an adulterous bent," it's possible to describe Moxy Media's business in bland terms of websites, ad sales, earnings, and EBITDA without explaining what really makes the business tick.

In the past, what made the business tick was Google's willingness to accept those lowball bids on clicks (but that was largely shut down), and Yahoo's continued willingness to partner with arbitrage sites to distribute these ad links to less savvy advertisers (this will undergo a review as the Microsoft partnership proceeds). Those assumptions are no longer valid. Anyone investing in Avid Life Media - moralizing aside - should be aware of those risks.

Now, some investors will be fine trading some stock based on putting one company they don't understand together with another company they don't understand, all run by management they don't respect because they seem strangely cool with advertising for infidelity on subway billboards. But I don't see Warren Buffett piling in anytime soon.

The New Yorker Arrives Too Late To The ‘Tea Party’

A couple of weeks ago (the equivalent of a lifetime in this month’s news cycle) I noted that “defending and/or warning against the prevalence the Tea Partiers” looked to be the media’s newest “parlor game.” To that end The New Yorker has jumped in to the Tea Party fray with a longish piece by Ben McGrath, which explores “the social movement that helped take Ted Kennedy’s Massachusetts Senate seat away from the Democrats, and may have derailed the President’s chief domestic initiative, occurred last fall.”

The article, a standard New Yorker treatment as these profiles go, goes to some length to explain the movement, describe the players: Rick Santelli is cast as the “Paul Revere figure of this Second American Revolution,” Dick Armey and Glenn Beck are also name-checked a number of times, as are any number of “Party” participants from across the nation. All in all a fair-ish take on a movement that has been dominating media coverage for some months now. But too little, too late?

What the piece does not address (and I imagine this has mostly to do with print deadlines) is Thursday’s Supreme Court ruling that struck down limits on how much corporations can spend on elections. One of the most striking fall outs from this decision (which was roundly critisized on both the left and the right ) is that it ostensibly removes the influence of everyday voters. Said Rachel Maddow the other day: “What’s the point in individual people trying to influence politics with their donations if Exxon or some other company can quite literally match and therefore cancel out the combined donations of every single individual donor in the nation whenever it wants?” Said leading Republican election lawyer Ben Ginsberg: “the political party as we know it is threatened with extinction.”

Know who else is probably “threatened with extinction”? The Tea Partiers. That is unless some corporation decides to take up the Tea Party mantel. Something which thus far has appeared to backfire. (The Founders weren’t too hot on corporations either, by the way) By the midterms we may be more concerned about the “Goldman Sach” effect than that of what’ left of the Tea Partiers.

[Pic above is via The New Yorker]

Related (sort of): What a corporate sponsored Senate might look like courtesy of the people at Funny or Die:



Geekosystem Launches, Making The Internet Fitter… Happier

With the introduction of new geek culture website Geekosystem, the newest site launched by Mediaite founder Dan Abrams, the Internet just became both geekier and cooler at the same time. Edited by long-time Mediaite contributor Robert Quigley, Geekosystem aims to celebrate and cover everything from technology and science fiction to video games and comics. The site launched with a Power Grid ranking of 30 Greatest Living Web Geeks, a post on the steady sales of Tiger Woods’ video games, and a smart piece on fighting email spam with…spam-like botnets.

As we said last week, Geekosystem will delve into geek culture with reports and analysis on the myriad aspects of geekdom: from gadgets and video games to comic books and science fiction. The site will merge the content aggregation of popular web culture destinations with the editorial voice of the post-Web 2.0 generation of geek luminaries.

Editor Robert Quigley introduces the site and describes its mission:

As of this morning, Geekosystem is live. The servers are serving, the URLs are uniformly locating their resources, the arcology is under its neat little dome and stocked with birds, fish, and fresh water, and there are a bunch of well-oiled, steampunky gears and clocks spinning around and doing something cool. But what does this machine do?

Our goal is nothing less than to unite all of the tribes of geekdom under one common banner. The truth of the matter is, there’s a lot of overlap between the different families of geekery. The geeks who are into gadgets and computers are often the same as the geeks who are into comics and sci-fi are often the same as the geeks who are fueling the culture of the Web, one forum or imageboard at a time. As the site’s name suggests, Geekosystem recognizes and celebrates these interconnections and the often-overlooked personalities who hold it all together. Live together, die alone!

If you’re like us, you probably already have a go-to gadget site. You might get your social news fix at a Reddit or a Digg or a Hacker News. You certainly know where you can find lulz-inducing videos and pictures and flowcharts. Geekosystem is not here to disrupt your diet of information, though we think you will find us a worthy and nutritious supplement.

In addition to our spiffy weekly Power Grid, which you can read more about via this FAQ, Geekosystem seeks to give you a unique kind of home and refuge. But we’ll need your help. Above all, we want this to be a discussion and not a talking-down-to, and we want you to talk back, share your expertise, call us out when you think we are being dumb. We will be in the trenches of the comment sections with you. This is the stuff we love and obsess about, and we hope you will come along for the journey.

The Skynet’s the limit.

The Skynet’s the limit indeed. As TechCrunch points out “The site is already getting a vote of confidence from one of the biggest players in the tech space, Microsoft. The tech giant is going to be the exclusive advertiser (for Bing) on Geekosystem for a full two weeks”.

Mediaite wishes only best of luck to our newest member of our growing family. Now go and check out the site.


Video Interview: Break Media Jumps Into Social Gaming Space

Keith Richman, CEO Break Media

Break Media, the LA-based parent of Break.com and other men’s entertainment online properties, is expanding into the currently lucrative business of social gaming, with the launch of its first game and its gaming division. The studio, located in Shanghai, China, will launch its first game on Feb 1, called MMA FightPicker, a mixed-martial-arts-themed social game that will be promotted through Break’s MMA property, CagePotato.com. That, in general, is the strategy Break wants to take: match its vertical themed content sites with games, playing off the loyalty of its audiences. Also in play, developing Facebook and other social media versions of these games.

Down the line Break will also get into advertiser-driven gaming as well. The studio is working on about half a dozen original titles, all slated for this year. Alex Lien, formerly COO of Chinese game dev company Winking Entertainment, has been hired as GM, Greater China for Break Media and will manage the game studio and all other Break operations in the region.

I did a short video interview embedded below with Break CEO Keith Richman, when he was in NYC last week, about the launch of the new division and his hopes from gaming.