Silicon Valley ad veterans launch start-up, Adify; raise $8million

Once an entrepreneur, always an entrepreneur. So it is with Larry Braitman and Richard Thompson, the guys who formed Flycast Communications a decade ago, to create an online advertising network that served smaller Web sites. It enjoyed a $500 million IPO and then, in the frothy year of 1999, was acquired by CMGI for $2.3 billion.

They are trying it again with a new start-up, Adify, and are looking to aggressively undercut rivals.

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Braitman

Flycast had created the first “blind” advertising network, where a network of advertisers served ads to participating Web sites, and there was little negotiation. Times have changed, and now the pair are starting Adify with almost the opposite approach.

They’ve just raised $8 million, in a first round led by Venrock, and including individuals. This time, Adify’s network allows transparency — and thus may be more enticing for site owners and advertisers. The Belmont company allows advertisers to contact bloggers or other Web publishers directly. It gives advertisers a form — run on the back-end by Adify — where they can request a particular ad space on the site. It allows a publisher to negotiate ad rates, and to reject an advertiser if wanted. Adify is only taking 20 percent of what the advertiser pays to the publisher. That’s considerably less than what many other ad companies charge, for example Adbrite, which takes 50 30 percent.

For that 20 percent, the publisher gets a lot. It includes Adify’s support for serving both graphic and text ads, all billing and collections (including eating any credit card fees), ad management, tracking and reporting.

The site launched in June. We asked Larry yesterday whether he is purposefully undercutting competition. He said “that’s where the market is headed, and potentially lower.”

Adify allows bloggers or like-minded sites to create their own network — as FM Publishing has done with tech bloggers — in order to make things simpler for advertisers who are looking for a one-stop shop. For example, Adify has formed a network for publishing sites covering the cycling industry. It is called Clip-Ins. This also creates a referral network: If one blog or Web site snags an advertiser on behalf of the network, that Web site gets a 10 percent commission for generating the deal.

We asked Larry how he intends to develop the expertise to go after these particular niche networks, since ideally this demands a lot of pavement pounding to schmooze advertisers to advertise in those niches. He said he was not prepared to answer that question; it is still early. He has no intent to manage campaigns on behalf of advertisers, he said.