Whether you’re a very large, already successful company or a small startup, the same rule applies if you want to make money online: increase your ad revenue or sales. This rule even applies to Microsoft, one of the most successful companies of all time, which is why they’ve recently partnered with OpenX. Keep reading to learn the implications of this deal, including its likely effect on Google.
Until this major partnership, OpenX was a relatively small Pasadena, CA-based web startup that operated one of the country's largest independent online advertising networks by developing software that enabled users (most likely marketers) to post ads on websites that would likely be visited by the type of buyers they were most interested in -- or rather, their target audience.
A majority of the software offered by OpenX, which had only been around for three years at the time of the deal, is centered on open source technology. This type of technology is characterized by the fact that it's created and built by online communities of experts who are volunteering their services for free. In turn, the resulting technology and/or software is also offered for free. This is exactly why the company, though relatively small, has so many clients that are of interest to Microsoft: it has succeeded in attracting smaller companies who don't have a lot of money to spend, but are looking to make money on their websites by selling ads.
It should be pointed out that before striking a deal with Microsoft, OpenX was by no means hurting for business or doing poorly financially, as illustrated by the number of websites they service. Last year this open-sourced ad server made a smart decision by rebranding their name and image; the company was formerly known as OpenAds.
Aside from this rebranding, OpenX made a lot of changes since raking in $15.5 million in December of 2007. In April 2008, OpenX chose Yahoo's former global ad marketplaces SVP Tim Cadogan as their new CEO and moved their offices from London (where the company was founded) to their new home base in California. Even more recently, the startup launched what it refers to as its "OpenX Market." According to Cadogan, this market is essentially "an exchange for all classes of buyers and sellers." OpenX claims that since October of 2009, their marketplace has "experienced a monthly run rate of more than two billion impressions."
There's no telling if the plants have changed, but before the deal with Microsoft Cadogan revealed that the company intended to use the proceeds to invest in engineers and sales personnel. "No one has built an exchange market for mid-size businesses," Cadogan said. "It's a under-served part of the display business and there is a general under-appreciation of display right now. But most marketing areas need the brand building that display offers, not search. I think companies are slowly starting to come around to that realization." Apparently, so to is Microsoft.
Both companies should transition into a working relationship together fairly easily, seeing as how Microsoft basically provides a similar service. Sure, the company is most known for their Office software suite and Windows, but it also enables advertisers to both create and distribute ads for small companies such as flower shops or much larger accounts, such as the one Microsoft has with Maserati.
To many, it will surely look like OpenX got the better end of this deal. After all, they were rather small and have now been placed in the limelight to play with the big boys, but the relationship will actually be mutually beneficial. This deal will enable both companies to drastically expand their business and online ad revenue, but how?
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