As part of ADOTAS’ continuing efforts to get you closer to our industry’s heavyweights, this week we sat down with John Federman, CEO of click-to-call and call tracking solutions company eStara. John gives us the inside scoop about this growing technology, what he’s learned since his former post as CEO of Dotomi, and what we can expect for the expansion of this cross-channel bridge.

ADOTAS: First, tell me a little bit about eStara.

John Federman: The Company has been around since ’99 and has consistently been focused on creating an easier, more seamless experience connecting buyers and sellers, and spends its time largely concentrating on how to do that with the power of voice.

A: How does it compare to your former CEO roles (Dotomi, Newmediary, AdSmart, etc.)?

JF: There’s a common thread in that each of the companies has been focused on using the power of the web to connect buyers and sellers, and some of the companies, which whom I’ve been associated with, have been in different points in their developments. eStara has a relatively mature product offering and as such has the benefit of an incredible and referential account list that we’ve had the opportunity to grow with in terms of the products and services that we offer, and ultimately the adoption of the technologies has really been championed by consumers. We’ve been able to spend a considerable amount of time developing new and interesting ways for buyers and consumers to connect within the context of their environments.

A: What have you learned from this experience so far?

JF: Well one, I’m privileged to work with the kind of people eStara has. The development and the customer service teams are absolutely extraordinary. You don’t, as a relatively small company, create the kind of customer list that we have without those assets. What I’ve learned is the power of making sure that your offering is easily demonstrative thought leadership, and that because you enter into a client-based relationship with thought leadership, it gives you an opportunity to be much more of a partner in terms of how you iterate the product and deliver an even better product for the customer experience.

A: What does the increased adoption of the click-to-call technology and the pay-per-call model say about the direction of our industry?

JF: I think the industry itself is maturing to a point where we’re all recognizing that it’s much more important to create a product and a solution that responds to the way the customer wants to communicate. So, rather than being so focused on this has to be a pure online transaction or this has to be a pure offline transaction, the reality is that as products become more complex and price points continue to go higher, often it’s going to be a hybrid. And the lesson I think we can learn is you need to be able to give the right method of contact, for the right customer, at the right time. And that’s where we play a pretty important role.

The other thing I think is important to note is that click-to-call and pay-per-call are often put into the same bucket and the words are used interchangeably and in fact they’re kind of different. Click-to-call is the underlying technology and pay-per-call is simply one of the business pricing strategies rather than a technology.

A: Do you think this technology answers that cross-channel gap we keep hearing about?

JF: Very much so. You could look to the way that one of our partners, Verizon Super Pages, uses us. They use both in their print ads to act as a source as call tracking and they use both the call tracking and the click-to-call in their online and the thing that both of those things try to respond to is 1) creating a demonstrable ROI, and 2) creating an opportunity for the data and the time investing online that translates to an offline experience. We’ve all had that experience where we talk to an airline, we put our time in and we filled in where we’re going to, and when we’re going, and all of that and at a certain point for whatever reason we feel the need to talk to someone live.

We’ve already invested 15-20 minutes into the process and there’s nothing more frustrating from a consumer perspective than getting someone that says “who’s this” and “where do you want to go” so to be able to take that experience, translate it and have a cross-channel date of passing—so, the online experience translates to a phone conversation—that from a consumer’s perspective demonstrated not just a great continuity in the experience but it demonstrates the respect for their time.

A: What sorts of changes do you see for this model and technology?

JF: I think the most exciting changes are that so much of what companies in this space and specifically served and talking about are actually happening. We’re seeing a lot of adoption relative using the power of voice from within a web-based experience that builds a lot of velocity behind the category. We’ll see more collaboration with CRM tools probably. I think you’ll probably see a better understanding of how to dynamically present these opportunities, so rules-based opportunities.

A: What is unique about eStara against its competitors?

JF: I think the most important thing is that we’re a pure wholesale provider. We don’t sell directly to the small media match presses and that’s true certainly in the media space. The other distinction is that we also have a very robust marketplace service the enterprise marketplace and so what one of the things we feel uniquely [able] to do is to take that experience of what we’ve learned through customers like Sears and Dell and HSBC and Allstate Insurance and others and translate that to the world of directories and online media. We sort of understand how to respond, so for instance, Amazon who has been a partner of ours for some time now.

What they’ve done almost entirely is taken down their 1-800 number because they want to be able to control not only the volume that goes into their call center but they want to be able to proactively touch their high valued customers. It’s no different than when you and I walk into a store that we’ve bought a bunch of clothes at in the past. It feels good when that clerk comes from behind the counter and says “Hey John, how are you. Nice to have you back here. I found a suit that I think would look great on you.” By being able to combine the power of data mining with dynamically offering the opportunity to have a personal voice-based conversation, a lot of lessons have been learned.

A: What are you goals for the company and for yourself?

JF: It’s really to have eStara fulfill its destiny, and that sounds cliché but its having been in the space early, having been a loud and proud proponent of voice within the world of ecommerce, we’re just excited to see that the marketplace is embracing what we’ve felt so strongly about for some time. Our goals for eStara are simply to live up to the promise and deliver back the value that our incredible development team has created and the good news is we should be right on track.

As eStara’s Chief Executive Officer, John Federman is an experienced leader who has helped three high-tech startup companies achieve scale, and he has extensive experience in online and print media.

John was president and CEO of Adsmart, a CMGI company, and took the company from 8 employees and $65,000/month in revenue to 140 employees and over $7M/month in revenue prior to its sale to Engage for $437M. He successfully repositioned Newmediary from a destination site to an ASP supporting a private label directory network, raised $15M in investment capital with GE Capital as lead investor, and sold that company to CNet Networks. As co-founder, president and CEO he led Dotomi in establishing its US operations, raised a $10.5M series C investment, and guided the rollout of its first product which enables advertisers to display personalized banner ads.

John spent 12 years at PC Week, rising from regional advertising manager to publisher of the #1 trade publication in the world. He managed all aspects of this $100M+, 150-person enterprise and established personal contacts with marketing executives from leading global technology firms. He launched PC Week Online, PC Week’s highly successful web partner.

Part of the letter reads:

“To track the performance of a campaign, 3rd parties ad-servers may place a cookie on users’ computers to capture standard web traffic information such as time, date, IP address and browser information.”

It’s something that has been lacking from Google’s roundup of AdSense services, and it will allow advertisers to run more individualized and targeted campaigns, opening the door to displaying ads on an individual site by keyword or subject. (Incidentally this may also result in increased AdSense checks for publishers.)

Google maintains that 3rd party tracking cookies won’t affect privacy, and collect anonymous data only, and that 3rd party tracking information will even be hidden from them. It also sounds like Google is only testing things on a small-scale with a handful of publishers. But with all the fanfare and press announcements that spring forth from Google whenever they start testing a new feature, you never can tell.

Jennifer Slegg of contextual advertising blog Jensense speculates that the addition of 3rd party tracking will encourage advertisers to increase their funding for contextual ads. It certainly it can’t hurt, and if the data is truly anonymous as Google says, there should be no “Google is spying on me” complaints. At least none that are credible.

First of all, if 3rd party tracking will make both sides of the advertising equation (advertisers + publishers) happy, why Google didn’t start testing something like this sooner? It probably had a little bit to do with technology. After all, Google is always working on a gazillion different projects at any given time. But it probably has to do mostly with the ever-changing landscape of contextual advertising.

For a long time, AdSense served only text-based ads. Anything more would’ve been “evil.” And then last year, when the time was right, Google added support for image ads (albeit very conservative images—no flashing monkeys & small file size). The internet had reached a point where images didn’t realty slow down internet connections, and publishers were used to Google text ads, so why not images?

I guess now Google is willing to test people’s sensibilities about 3rd party tracking cookies. It explains the low-key way they test new ad technologies. It’s like sticking your big toe into a lake to learn how cold the water is, rather than jumping in all at once.

There are some concerns, like how Google will enforce their privacy policy if they can’t access the information gathered by 3rd parties. Since there was no mention of it in the letter they sent out, I assume it’s something they haven’t quite hammered out yet. That’s the point of a beta test anyway. The product is out of the lab and ready for use, but it needs some field testing. When it’s lean and mean, we’ll probably hear more.

Google is apparently trying out a new AdWords Click-To-Call feature. (So far, Click-To-Call ads have only been observed on ads for hotels.) If you click on the telephone icon, a box opens up and asks you to type in your phone number. Type in your number, including area code, and the ad calls you. At least in theory. None of the ads we tested were able to connect; probably one of the reasons the new feature hasn’t been officially announced yet.

However, in spite of the lack of an official announcement, there is already an FAQ for Click-To-Call on Google’s help page. Google acknowledges that Click-To-Call is still in the testing phase. Google also says they pay for all calls (except possible airtime charges for mobile numbers) and that your telephone number is confidential and is even hidden from the advertiser. “When you’re connected with the advertiser, your number is blocked. The advertiser can’t see your phone number.”

In a recent press release, Liz Daney, chief media officer at Fitzgerald + Co., suggested that the timing of this campaign is seasonal, and that similar lures to tourist destinations might be pursued in the future if this proves successful: “By aligning the Aruba brand with mobile weather content, we are immediately showcasing the island as a destination in stark contrast to the dreary, cold weather here in the states in February. And the technology allows consumers to directly access the means to book a trip: relevant, accessible and measurable all in one.”

While companies such as Google and eStara have already begun to implement click-to-call technology, the Weather Channel Interactive may be the first to adopt it as a staple of their mobile web presence. The opportunity to generate instant leads in the form of phone calls is a powerful tool that is expected to be exploited by several markets in the coming months.

Google’s new product line of “Mini” search appliances, used by small to mid-sized companies, includes systems that can find up to 200,000 internal documents (which sells for $5,995) and a 300,000 document search appliance ($8,995). The search appliances are a combination of hardware and software that can pool a wide variety of documents authored by office workers inside an organization, or that can be used externally to allow customers to search through documents on a company’s website.

The two new devices improve on Google’s previous Mini search appliance -introduced a year ago- which has the capacity to search a smaller pool of 100,000 documents and sells for $2,995. According to statement made to Reuters by Google’s Enterprise General Manager Dave Girouard, Google has already sold “thousands of Minis to more than 2,000 organizations.” But beyond that, Girouard refused to disclose any more specific figures.

Though search appliances like Google’s are expected to generate upward of $900 million in sales during 2006, they currently only represent a tiny fraction of the company’s revenues—99% of which still come from contextual search ads.

In other Google happenings, it’s been reported today that a senior research scientist at the company, Shumeet Baluja, has filed U.S. patent application 20060004627 for the “call-on-select” process that takes into account screen size, connection speed and input capabilities of mobile devices to determine whether to serve an ad that would link to a website or place a phone call to the advertiser.

The patent application – which is based on an algorithm that considers the various limitations of a device, an ad’s relevance to users (both contextual and behavioral), CPM and CPC price, user preferences and other “performance parameters — could give Google competitive edge in the burgeoning click-to-call/mobile advertising markets.