ADOTAS EXCLUSIVE — Zango is an online media company which has provided users with ad-supported premium content since 1999. The company made headlines today with the announcement that 68 jobs will be lost due to downsizing and a redirection of the company. The company put out a statement explaining the decision and the future of the firm:
“Zango’s top priority for 2008 has been the planning, development and release of Platrium, a unique casual gaming experience launched in beta last month. During this time, it has become clear that this new product is the future of the company and, as a result, Zango is narrowing its focus. This significant shift for the company will impact 68 jobs across the company’s six offices in four countries around the world. While this was an incredibly difficult business decision which impacts Zango’s amazing base of employees, the company is very excited about its future and new direction with Platrium.”
Keith Smith, co-founder and CEO of Zango took some time to speak with Adotas about the company’s journey to this point and one of their newest developments, Platrium.
ADOTAS: What inspired Zango and what do you feel its position is in the online entertainment industry?
KEITH SMITH: A group of us – many of whom are still at Zango today – founded the company in 1999 because we didn’t see anyone or any company fulfilling one of the great promises of the Internet – namely, one-to-one targeting. After I sold the company I previously started – a company called LoanWorks, which I sold to IndyMac – I was the VP of IndyMac’s online loan division. One of my responsibilities was marketing. The Internet’s promise at the time of enabling one-to-one targeting of consumers just wasn’t being met, wasn’t living up to the hype. It was then that I had the idea to start what is now Zango.
While this underlying premise at Zango hasn’t changed, our vision has expanded from merely connecting advertisers with consumers to now involving all of the Web’s constituents – and specifically Web publishers and content providers in addition to advertisers and consumers. It is this vision, which we call the Content Economy, and our business model of time-shifting advertising away from entertainment experiences to the point in time when a consumer is shopping or browsing, that we believe is an incredibly powerful way to monetize Web sites and content across the Internet. This enables the content to remain free to the consumer and, most importantly, makes the online economy work for all of those involved.
ADOTAS: How has the company developed since its beginnings in 1999?
KEITH SMITH: In a word, massively. We started as a B2B play, but have significantly evolved over nine years into an online media company serving consumers, advertisers, Web publishers and content providers. In addition, we have become an increasingly consumer-centric company after launching our first consumer-facing Web site back in 2004. Over the past several years, we’ve aggregated a massive library of online entertainment content: videos, games, personal expression tools like emoticons and avatars, and much more, all available at Zango.com. With the recent beta launch of Platrium, pronounced “PLAY-tree-um,” we are now working to make that content available to specific audiences that find certain categories of that content of particular interest. For example, more than five million unique gamers visit Zango.com each month, making Zango.com a Top 10 casual gaming site, according to Nielsen. Platrium’s focus will be on casual games and we will roll out additional content-specific channels over time.
ADOTAS: Could you elaborate on the “Content Economy” that Zango prescribes to and how it is different from other ad-driven content models out there?
KEITH SMITH: The Content Economy is a big vision, especially for a company of our size. The vision is ambitious, but the underlying idea is pretty simple. Consumers want free, entertaining online content. Advertisers want consumers looking for goods and services. Content creators want an outlet for their games, their videos, their screensavers, what have you. Web publishers want interesting content on their sites to help drive traffic and visitors. The Content Economy brings all of those constituencies together in a truly symbiotic environment. And it is different from other ad-driven content models for at least three reasons. First, our content syndication platform is automated. Second, our time-shifted advertising model engages customers not when they are enjoying content, but when they are browsing or shopping for a good or service online. That engagement at the right time has proven to be very effective. Third, we are on the desktop through a toolbar (or, with Platrium, what we call a Playbar). And we strive to abide by best practices that lead the online downloadable software industry as those practices relate to consumer notice, consent and control. Each of the four constituencies plays a fundamental role in the Content Economy, but consumers as a group are the first among equals.
ADOTAS: Who do you feel are your major competitors?
KEITH SMITH: While we believe we are in a pretty unique position, we compete with IAC and its personal expression offering as well as MIVA and its ALOT offering. With those companies and with other larger Internet players, we don’t just see them as competitors, but as potential partners.
ADOTAS: What kinds of challenges has Zango faced throughout its history and how have you responded to the confusion or controversy (including previous lawsuits)? Has this changed how you do business (allocating more resources to brand pr, staffing up the legal department, etc.)?
KEITH SMITH: We’ve faced lots of challenges, but those from our history are in the rearview mirror as far as business and our future are concerned. The general public’s perception of us is a challenge, but one that we work on every day by focusing on consumers and our business partners and making the Content Economy work for all involved. We’ve worked very hard to generate good news and buzz about what Zango is like in 2008 – the very recent beta launch of Platrium is a great example. Other examples include Zango.com being a 2008 finalist for the SIIA’s CODiE award for best video Web site and Zango again being named (for the fifth year in a row) in 2008 as one of the best places to work in Washington. We’ve faced a ton of challenges and addressed them as fast as we could. I’m more excited about our prospects now than I ever have been before.
ADOTAS: How is Zango moving forward technologically as well as from the most recent press?
KEITH SMITH: I mentioned previously our commitment to best practices to provide and safeguard consumer notice, consent and control; some of that commitment involves technological advancements and efforts. Going forward, however, I’m most excited about the development of our new Platrium toolbar product. The Platrium Playbar (“toolbar” really didn’t do this innovation justice, so we decided it needed a new name) delivers a unique casual gaming experience that combines the convenience of a desktop toolbar and the breadth and depth of an engaging, entertaining Web site. We think it is really the next advancement in Internet browser entertainment. Platrium.com, focusing on casual games, is just the first of many entertainment channels planned for release under the Platrium brand name, with each channel to focus on a different category of content.
ADOTAS: The news has been riddled with arguments by the contextual and behavioral schools of thought, both vying for the public’s support. Which side of the fence do you guys sit on?
KEITH SMITH: We are a huge believer in contextual advertising and paid search economics for advertising on the Internet. We believe that online entertainment content is the best way to engage the Content Economy, but we don’t believe advertising within or around the content itself is effective. For example, if you’re playing a game and a travel ad is delivered to you in the middle of the game, what are the chances that you’ll stop playing and book your next vacation? By contrast, you can play Sudoku or dozens of other games free of charge at Platrium.com and enjoy that experience free of commercial interruption. Later, when you are looking online for travel-related services, or a book to read on the plane or boat, we will bring you advertisers with great offers for precisely those things, at a time when you are more likely to want to engage with those advertisers. Our contextual time-shifting capabilities enable us to connect consumers with advertisers at precisely the moment consumers are in browsing or buying mode.
ADOTAS: Where do you see Zango going in the next two years?
KEITH SMITH: The beta launch of Platrium marks what we hope is the next step in our Internet journey. We believe we’ve developed a unique experience combining the ease of use of an Internet browser toolbar and the excitement of Platrium.com, a destination casual games site. Platrium provides consumers with an online casual gaming offering more grown up than all the others – making it an ideal place to relax or take a break from everyday cares. The Platrium tagline is “Give yourself a break.”
Platrium is ad-supported, much like any other toolbar in the marketplace. Platrium’s Playbar includes a combination of monetization capabilities, including search and a unique comparison shopping engine, which delivers timely, highly-relevant and highly-clicked results. Platrium’s client-side comparison shopping engine is the only one of significant scale that serves to deliver free content access to consumers on the Internet. In addition, Platrium’s Playbar includes another highly-clicked ad format that we call the Slider, which also does not interrupt the gaming experience. Similar to a notification from your favorite Instant Messaging service, the Slider enhances the visual appeal of that messaging format and provides advertisers a new, consumer-familiar marketing vehicle. All advertising through Platrium is based on contextual keywords, much like search, and there are no traditional “pop-up ads.”
Consumers, advertisers, and sponsors are co-partners in Platrium. And, because the search and comparison shopping activity is separate from the gaming experience, consumers can focus on games without interruption when they’re taking a break and engage with Platrium advertisers and sponsors when they are shopping or browsing the Web.