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Claria abandons adware -- really! -- and raises $40 to push PersonalWeb


Claria, that Redwood City company that we and others criticized for its adware software that tracks your surfing patterns, has repented and decided to do something completely different. Its latest offering is a personalized home page, called the PersonalWeb.

In an announcement tomorrow, the company will also reveal it has raised a bunch of fresh cash -- $40 million -- from SOFTBANK America, Rogers Communications, Asia Pacific Ventures and Sand Hill Capital. Claria's previous investors have apparently given up on joining in more investment. Those include USVP and Crosslink Capital, which invested at a whopping $200M+ valuation back in 2000, and probably couldn't stomach the company's wild ride anymore.

When preliminary news about the changes leaked out two weeks ago, we declared would only believe it when we see it. So Claria got in touch with us and showed us. They really seem to have changed their stripes.

Basically, Claria is leveraging traffic-snooping expertise, and using it instead to build you a personalized home page. If you go to Google for your searches, for example, it will note that, and it will throw up a Google search bar on your homepage. If you search SiliconBeat for your latest Silicon Valley news, it will place SiliconBeat up on your home page too, in a special panel for your news. Here is a demo of how it works.

It looks like the diagram below, which you can click on to enlarge slightly:

You're probably aware by now of all kinds of companies and features offering personalized home pages. Google is one example, but there are a dozen others. Netvibes has gotten buzz for being an early leader in letting you move boxes around your home page with so-called AJAX technology (Go ahead, check it out; it is pretty slick.)

So how is Claria's PersonalWeb different from these?

Scott VanDeVelde, Claria's chief executive officer, told us that PersonalWeb is the first to create a page based on your own Web surfing patterns. "This is the only automated one, conditioning content with your behavior," he said. (Update: Greg Linden, of Findory.com, takes issue with this in comments below. See also his post here.)

At the same time, though, PersonalWeb lets you override its suggestions, allowing you to select sites Claria may have downplayed or missed. Like some of its competitors, PersonalWeb lets you reorganize the boxes of content around your home page, if say you prefer to have your news content above your gardening hobby stuff.

It won't be tracking your surfing patterns to serve you advertising. The process is now indirect. Claria uses its intelligence about your surfing to build your home page, and then places ads on the right-hand side of your page -- which are related to the content on your page, naturally. Claria may also eventually imbed ads in various places on your site, for example, a half-banner ad for a camera in a content box where you might have camera-shopping information.

The Claria software is downloaded on to your computer.

Only seven percent of Web users have actually taken the time to configure their own home pages, said VanDeVelde. But as Claria looked at surveys, it found that users who personalize their pages use them more, and spend twice as much time with their favorite publishers than people who have a more generic home page, he said. He said Claria will work with publishers to offer them their own private-label versions of the PersonalWeb.

Claria is selling off its personalized advertising assets. The market for behavioral, contextual advertising is worth about $20 billion, said VanDeVelde. But the company found a frustrating time time lag existed between a person's surfing behavior and when an ad could be found to be placed on a site related to that behavior. The home page is a better target for advertising, he said, because people go there about seven times a day.

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$40 whole dollars? Don't spend it all at once! :)

Hehe, so it's really $40 million - that actually seems like an excessively large sum for a personalized homepage.

Pete Cashmore on April 3, 2006 8:55 AM
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Detox investing is alive and well.

First TCV invests in a spyware/spam company called Virtumundo, not these folks invest in the second-try detox of Gator.

Russ Chen on April 3, 2006 9:25 AM
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Claria's PersonalWeb most certainly is not "the only automated one, conditioning content with your behavior."

Findory.com has been doing an automated, personalized home page that learns your interests from your behavior for over two years.

Unlike Claria's product, Findory does not require downloading software to your machine to use.

Greg Linden on April 3, 2006 9:36 AM
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why did they need to raise the capital? in their S1 filing from 2004 (admittedly old) they had net income of $34mm on $90mm in revenue with over $60mm in liquid assets on their balance sheet for 2003 with revenue growth over 100%. Either the adware business completely tanked over the past 2 years, or did the prior investors cash out?

jim on April 3, 2006 11:31 AM
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Jim - I think it was a combination of all those pesky congressional actions, lawsuits, consumer revulsion and an illegal business model that caused the turn in their fortunes.

What these guys are trying to do is much like trying to morph Linda Lovelace into Miss America.

Russ Chen on April 3, 2006 3:36 PM
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