Do you have a friend you value because that person is good with book or movie recommendations? Outbrain wants to be that friend to the whole internet by suggesting related content when people read a story. The company has huge reach and deep pockets but still faces a big problem: competitors are coming and, even though vast numbers of people on the internet have used Outbrain, almost no one has heard of it.
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paidContent caught up with CEO Yaron Galai in Outbrain’s office near New York’s Union Square this month to hear about his plans to stay on top. In the (likely) event you’re not sure what Outbrain does, here’s a screenshot from Time that shows how and why people and publishers use it:
The business model is pretty simple. Outbrain helps publishers keep readers on their websites by giving them a tool to surface related content that they’ve published in the past. The company’s “From Around the Web” tool also provides a way for publishers to buy and sell traffic — in the example above, if someone clicks on one of the related stories links, Time might get a referral fee from the outside publication (of which Outbrain would take a cut). Small publishers can use the service for free to surface their own content but once they reach a certain volume of traffic, they’re obliged to add paid links. Outbrain claims its tools are installed on more than 90,000 blogs and websites, including big names like CNN, the New York Post and Slate.
Competition is coming
So far, Outbrain has done pretty well. The company is backed by $64 million in venture funding and claims its recommendations are clicked on billions of times a year.
But now competitors are arriving, including comment site Disqus , which has relationships with millions of websites, and Wordnik, a dictionary site that says its semantic knowledge lets it offer better recommendations. The would-be rivals could undercut Outbrain by copying its service and offering it for a lower price or even for free. Meanwhile, Outbrain must also contend with the enormous referral power of little companies with names like Google, Facebook and LinkedIn.
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Photo by Outbrain