Congratulations Ron Parsons

The entire Surphace team wishes Ron Parsons a hearty congratulations today as he leaves Tribune Interactive for Buzznet.  Ron has been our champion at Tribune for the past year, leading our roll-out on seven of Tribune’s properties including LA Times, South Florida Sun-Sentinel, Orlando Sentinel, Baltimore Sun and Hartford Courant. He devoted several months to making sure we were properly implemented and fully optimized.  As a result, our products and process improved and we were pushed to new heights. Best of all, we did it all together in record time.

In his new role at Buzznet, Ron will be working with some slightly edgier properties like The Gauntlet, Stereogum, AbsolutePunk and Idolator and returning to the glitz and glamor of his LA roots.  We have no doubt that these entertainment sites – a mix of established and emerging brands – will benefit tremendously from having Ron’s creativity and dedication on their side.

Best of luck Ron.  We hope to cross paths again soon!

Reporting for duty at Buckhorn Springs

The Sphere Surphace team spent the last week of September in Ashland, Oregon at Buckhorn Springs for our annual retreat.  If the mood from the team is a fair barometer, this was was our best offsite yet.  The Sargent family (Bruce, Leslie, Russell, Lauren and Quinn) who run Buckhorn Springs are lovely hosts and made our stay extremely warm and cozy.  The homemade food – much of it from the garden – was yummy and the beautiful grounds are an ideal spot for a small company retreat.

In terms of actual work, we did several full team strategy sessions (a rarity for this group) followed by breakout discussion that yielded a bunch of significant outcomes, most notably the decision on our last night in Oregon to change the name of the business to Surphace.  We also mapped out an exciting product roadmap to keep us busy for the next 6 months and crystallized our goals for the future of the business.

We also had some fun, taking several hikes led by the Sargent’s dog, Henke, partook in a white-water rafting trip down the Rogue River, and several of us ran an 8K race early one morning.  Along the way, an adult beverage or two was consumed and we sampled some of southern Oregon’s finest lagers.   Just for kicks, we even crossed the California state line to bring it full circle back where it all began.

Our group photos of the retreat are posted here.

Passing the torch

Succession stories are often associated with anxiety, trepidation and bewilderment; particularly when a founder passes over the reigns.  It’s the exception, rather than the norm, when succession happens naturally, which is why I’m so thrilled with the way Sphere/Surphace’s leadership has evolved. It will come as no surprise to our partners or anyone else following our progress that we’ve entrusted the reigns of the business to Josh Guttman as our next CEO.  Working with my co-founders Martin Remy and Steve Nieker, he’s made Sphere/Surphace hum and has earned the title.

Josh joined Sphere in the second half of 2007, after a lengthy and persistent appeal process. He fully believed in our business and value proposition from the start and it was apparent from the vigor with which he approached me. Once on the team, he applied that same vigor to business development, turning over every rock he could find and signing partnership after partnership, including several of our largest. When we were acquired by AOL in April 2008, we asked Josh to lead our expansion across the AOL universe and represent us on the ground in NYC.  He did so admirably, guiding our contribution to AOL while ensuring that our existing business continued to prosper. Without being asked, he assumed leadership of Product Development, Advertising Management and Design and each of these areas has improved significantly under his stewardship. In March, we named Josh COO and his command of the business has only improved since.   He oversaw some great hires in product development and business development in 2009, and led an inspiring retreat at our annual get together in September.  

My decision to step down was made easier knowing that Surphace is in excellent hands. Josh is the right leader for the business today. He’s a natural leader and a great guy to work with – earning consistent praise from all. Mapping out an exciting product pipeline for the next twelve months, Josh has provided Surphace with the ingredients to continue to prosper as a standalone business within AOL. I couldn’t be more pleased for Josh and excited for the Surphace team. Please join me in raising a virtual toast!

Next.

It’s been almost five years since Martin Remy, Steve Nieker, Toni Schneider and I started working on Sphere.  For me, it’s around 10% of a life. And it’s a time when I find myself thinking a lot about a particular question: What do I want to do next?

In 2005, I had the good fortune of being on the founding team of Sphere and joining True Ventures simultaneously. I always thought that I’d eventually focus all of my attention on one or the other, but both were too much fun and I guess I’m selfish in that way.  As time passed, I went deeper into each role and I never got around to choosing one or the other. It worked out nicely. True is on its second fund and Sphere had a successful sale to AOL in 2008. Most importantly, Sphere’s business and team are both thriving within AOL. While I’m proud of my contributions to both, the heroes in this equation are Martin, Steve, Toni, Shea DiDonna, Braughm Ricke, Om Malik, Puneet Agarwal, John Burke, Phil Black, Jon Callaghan, Marty Moe, Bill Wilson and AOL – they trusted and empowered me to pursue both. I am extremely grateful.

As I’ve thought through the question of what’s next, I’ve realized that I love the complementary perspectives acquired from building a company as an entrepreneur and investor. They are symbiotic roles and it’s really hard to say which has influenced me more. While my role at True as a Venture Partner will continue to deepen (because there is nothing more rewarding than working with people you admire and trust), I also find myself with a burning need to start another company. I’ve discovered my formula and doing both makes me happiest.

As for my next company, I’m not sure what the answer to that question is, but I’ve decided that I need to move on from Sphere (now Surphace) to figure it out.  This may feel like old news as I’ve been working to make myself obsolete as Josh Guttman transitioned into the CEO role. My decision is easy as I know that Surphace is in excellent hands. I wouldn’t feel comfortable leaving if I didn’t believe that Josh was the right leader for the business today.  He’s a natural leader and has a strategy for the future that I believe is going to accelerate growth for Surphace and AOL. I couldn’t be more pleased for Josh and excited for the Surphace team.

As for my thoughts about Surphace and AOL’s future, I’m more optimistic than ever. We joined AOL at an opportune time. AOL is doing what great, sustainable businesses do every so often – they’re reinventing themselves. As the business model of the oldest and one of the biggest Internet businesses evolves, Sphere/Surphace has become an important piece of their strategy to reach across and engage the web. In the past year, we’ve had an insiders’ view into how AOL’s new leadership team has moved aggressively to engage their audience (new vertical focused websites; a focus on engagement and not page-views for page-views sake; hiring leading journalistic talent when others downsized; acquisitions in the local content space; shorter development cycles with an emphasis on release, iterate and release). There is nothing like winning and the AOL publishing business is winning. As a result, I’m pleased to also announce that I’ve agreed to serve as a Special Advisor to AOL Ventures as they reinvent themselves. I am thrilled at this opportunity to evolve my relationship.

I want to give a huge thanks to the people who’ve made the last few years what they were: my family tops the list, an entrepreneur is only as good as their support system and this is my secret sauce. My co-founders, Martin and Steve, who trusted me to play a role in helping them get the tech they invented the exposure it deserved. Toni and Phil who taught me about generosity at a moment when I was able to learn. Matt Mullenweg who opened up my thinking of how a start-up operates.  Marty and Bill who have been consistently supportive since Day One – I can’t underscore enough how much I appreciate the manner in which they’ve empowered us to thrive in an appropriately independent environment. They have treated me (and the Sphere team) with enormous respect for which I am both thankful and flattered.  The original Sphere team, the current Surphace team who have embraced AOL. Our investors and advisors who supported and helped shape our vision. The True team and entrepreneurs who have taught me about sacrifice, vision, execution and the value of pursuing your dreams — and, of course, Lewis Dvorkin, Kevin Lockland and Bill who paid us the nicest compliment of all in offering to acquire our company and then doing so.

It’s been a thrilling, at times difficult, always rewarding and lucky ride I’ve been on. Thanks to all.

Welcome Andres!

While already a few months overdue, I’m as thrilled as ever to publicly welcome Andres Moran to the Sphere Surphace team.  Andres joins us as Director of Business Development and comes over from Milestone Venture Partners, where he did a two-year Associate stint and skillfully mapped out the startup landscape.  As a VC, Andres was already familiar with our story when we met for the first time over beers in early August.  His enthusiasm for the space and commitment to coming over to the operating side for some “real” entrepreneurial experience impressed me from the start. Two months in, he’s already influenced new products, lived through a big rebrand, led strategy sessions and moved within inches of closing several significant partnerships. Still, it’s not official ’til it appears on our blog, so a hearty welcome goes out to Andres, the newest member of the Surphace team. You can follow Andres on Twitter here @dremoran.

Goodbye Sphere, Hello Surphace

We’re super excited to formally announce that Sphere has a new name.  Our new name is Surphace.

The obvious question is why, in the midst of continued success – growth and distribution – are we changing our name?  In most cases, businesses change their names in order to relaunch, restart and/or establish a clean break from their pasts.  Our situation is very different.  Our business is as strong as ever, and from where I sit, the future looks as bright as I can remember (brighter, in fact).

Sphere is a name that’s been good to us.  It helped us become the business we are today catering to the likes of: Time, CNN, Tribune, WSJ, TMZ, CBS, AOL and millions of individual blogs.  As a brand, it communicates the totality of information disseminated across the web.  When we launched the business 3+ years ago, we did so with a desire to deliver that totality to users in the form of a blog search engine, so the name made sense.  Over time, our business has shifted, focusing much of its energy on large name-brand publishers.  We’ve learned that those publishers are as interested in syndication of their own content as they are in retrieving relevant third-party stuff.   In essence, our business today is centered around bringing content to the surface and so, Surphace is a name that, not only defines our business, but one we’ve grown to love.

Surphace is also a name that weaves incredibly well with our 2010 product roadmap, which includes, among other things:

• S4 – our self-serve platform currently in alpha (you can sign up for beta right here)
• SurphBoard – a spiffy updated editorial UI for our larger partners
• A url shortener in stealth mode – strategic to other products
• A real-time conversation thread, showing topical surphing in motion
• And a few more that we can’t yet disclose….:)

Nothing else about us will change.  Practically our entire team (plus a few talented additions) remains intact since the acquisition 18 months ago, and we couldn’t be happier with our extended family at AOL.  Some of you reading this must be chomping at the bit, wondering what’s going to happen to the Sphere domain.   To quell that curiosity, Sphere.com will soon grow to become one of AOL’s benchmark online destinations, and to maximize the suspense, I’ll leave it at that for now.

To all our existing partners, I plan to connect with each of you in person over the coming weeks to discuss our new product pipeline.  To all our future partners, we can’t wait to work with you.  Please get in touch and let’s see what we can create together.

How does a $35 eCPM sound to you?

A few weeks back, we ran an intensive analysis with a few of our largest, most integrated partners to measure the aggregate value created by having Sphere on their pages.  We measured and tracked click-thru rates, subsequent PVs resulting from readers who engaged with Sphere and inbound traffic resulting from syndication across our network.  As a multiplier, we used a contribution value, which measured the average monthly value of a single page-view for each site in question – essentially an RPM divided by 1,000.  In order to protect the identities of those partners involved, I’ve concealed publisher names, but the below analysis (clickable) moves from left-to-right to reach a campaign eCPM, or value attributed to that first point of engagement with Sphere.

What you’ll see is that with click-thru rates in the 1-2% range (slightly below our average), the average reader who engages with Sphere travels 4-7.5 pages deeper into a given site.  Combined with the inbound UVs driven through our network (tends to approximate 1%+/- of monthly article page impressions), that original click is worth between $30 and $46 eCPM.  For the sake of full transparency, these figures were higher than we expected, forcing me to go back and review the calculations.  They are, in fact, correct though, and they represent the clearest explanation yet of why Sphere represents pure ROI for publishers.  Since we’ve modeled our business with zero up front cost, there is zero downside to trying Sphere on your site.

If you’d like more information, please get in touch to explore what we can do together.

Most clicked on area of AOL News

We’ve been fairly quiet on the blog recently, but only because we’ve been so focused on our continued partner growth, new product pipeline and a few top secret projects…to be announced soon.

Over the past year, as our analytics have steadily caught up with the swift pace of our partner roll-outs, we’ve begun to gather more meaningful insight into the effectiveness of Sphere’s technology for our partners.  Fortunately, we continue to surprise ourselves with the results.  The slightly blurry chart below is a click-map from Omniture for an AOL News article a few weeks ago.  It shows that, on this article, three of the most popular five clicks were into the Sphere module.  This means that, in aggregate, Sphere was the most clicked on item on the page, by a fairly wide margin.  While this was a particularly strong performing article for our technology, Sphere consistently attracted one or two of the top five clicks.   This is tremendously encouraging because more people clicking into Sphere means more effective recirculation for our partners.   It also means that our algorithm is surphacing relevant results that people want to see.  And if that weren’t enough, it also means that many many eyes roll over the ad unit (for those partners who run advertising with us) leading to more opportunities for our advertising partners to get noticed.  We love finding new measurement tools when they show us results like these and we’ll share more in the weeks ahead.

BTF is where you find the action!

We’ve been preaching this mantra for some time,  but as web usage continues to evolve, the truthiness of our claims becomes all the more clear.  Below the fold (BTF) is where you find the action on the article page.  Heat-map studies support the intuitive logic indicating that online readers are focusing more of their attention in the main content well from the beginning of the article straight down the page.  It’s where readers bookmark, share, email, print and comment.  If you’re a reader interacting with the content in any sort of meaningful way, chances are that this is where you’re hanging out, which also means that these are the most engaged and aware of all readers.  The more one is interacting with the content, the more time they are spending below the fold.

Why do we care?  Because this is where Sphere lives and this is where we integrate ads with our content.  Online ad sales development has struggled to keep pace with innovations in content delivery and the evolution of web page design.   Today, the lion’s share of media is sold in three traditional sizes and placements – 728×90 leaderboard, 300×250 box ad and the 160×600 skyscraper, which all live either at the top of the page or in the right column.  This is bound to change.  As you can see in the heatmap study (and as everyone intuitively already knows), there is a direct disconnect between where readers focus their attention and where the bulk of ads are sold on the page.  For this reason, the leading publishers continue to think up new schemes and ad formats to test.  Unfortunately, the most recent ideas have involved larger and larger ads, which more than anything else, are more and more annoying rather than more effective.  As my girlfriend likes to remind me, bigger is not always better:)  As the industry continues to search for that elusive golden egg, Sphere is packaging more tightly integrated content/advertising modules than ever before.  If you’ve been following this blog, you saw us roll out the 468×60 on LA Times.  It received such an overwhelmingly positive response from our fans (not to mention excellent performance and click-thru rates) that we’ve decided to add it into our core product mix.  DailyFinance and Switched are the most recent sites to go live with our integrated 468×60 and both were integrated about as seamlessly as I’ve seen advertising integrated anywhere online.  It’s virtually impossible for an engaged reader who is commenting, sharing, emailing or printing not to interact with this module and therefore, also the integrated 468×60 ad unit.  It’s safe to assume that a large majority of readers who reach the end of the article will see the ad.  We already know that our content links draw an average 1.5-2.0% click-thru rate so a good chunk of readers are hovering right there on top of the ad already.  In terms of reaching a reader in the midst of their interaction with the content, I haven’t seen many better options.  The 468×60 banner is not as popular a unit as it once was, but we’re confident that media buyers will see the value in both this tightly integrated package and in reaching the most engaged readers specifically where they’re spending their time on the page.  If you’re a media buyer and this resonates with you, please contact us at advertising [at] sphere [dot] com.

Harry gets published!!

Our Director of Product Development, Harry Kautzman, recently reviewed the Netbeans IDE for PHP development on his blog.  His post was discovered and featured prominently today on Netbeans News as the lead featured article.

Way to go Harry!  You make us oh-so proud.

Tinseltown in Da Sphere: Welcoming our latest partner, LA Times

Today, we are psyched to announce the first fruits of a project that began last fall with a conversation that sprouted from an interview on NPR-WNYC.  Six months after that interview, we partnered with Tribune to power contextual content syndication on their 10 news sites – LA Times, Chicago Tribune, RedEye, Baltimore Sun, New York Newsday, Florida Sun Sentinel, Orlando Sentinel, Hartford Courant, Allentown Morning Call and Hampton Roads Daily Press.  Barely one month later, after a beautiful collaboration between Sphere and Tribune’s LA Team, Sphere is now powering related content on every LA Times article, as you can see in the below example (clickable).

Along with recirculating related LA Times content on each article, we’ve also created custom indices for the LA Times of both their favorite LA blogs and local news sources as well as a custom “around the web” index of sites with whom they’ve chosen to share traffic.  Both are innovative ways to use Sphere’s technology to a publisher’s advantage.  We’ve also integrated a 468×60 IAB ad unit beneath the content in this module, creating a seamless and integrated experience.  This excites me because we’ve learned that when content and advertising are married in an effective and natural way, performance of both improve.

This is the first of several Tribune sites to launch with Sphere, so we have our work cut out for us, but a special thanks goes to Ron Parsons and his team at Tribune for driving this project from the very beginning.  On Sphere’s side, Troy, Kevin, Adam and, as always, Martin get the credit for making the magic happen and making the rest of us look good:)

A New Chief

We’re psyched to announce that Josh Guttman has been promoted to Chief Operating Officer of Sphere.

Josh joined us in November of 2007. His primary focus was on helping Sphere accelerate its Publisher footprint. He excelled in that role, quickly becoming a leading contributor to our extensive network of A-list partners.  Also, we asked him to lead our expansion within AOL – he has done an exceptional job guiding our efforts.

Above all, it’s his proactive leadership that has made the most important impact on Sphere. without being asked, he has taken on a leadership role on Product Development, Design and Advertising Management. Each of these areas have been strengthened significantly under his leadership.

Thus, the entire Sphere team is thrilled to see his contributions, his role and responsibility at Sphere recognized. Congrats Josh!

You can follow him on Twitter at @JGut

Bon Anniversaire Tony!

Happy birthday TC!    Today is our co-founder and CEO, Tony Conrad’s, birthday.  As we all know, March 3 is a historic date.  On March 3, 1875, Georges Bizet’s opera “Carmen” premiered in Paris. On March 3, 1900, U.S. Steel Corporation organized. In 1974 on March 3, George Foreman KO’d Ken Norton. And in 1966, Buffalo Springfield formed.  None of this is surprising to us at Sphere given that Tony is a highly cultured patron of the arts, savvy business professional, an unrelenting fighter and a more than occasional rocker.  Happy Birthday Tony!!

You can follow Tony on Twitter here: @tonysphere.

Why contextual analysis kicks behavioral’s butt on content

For the past year, we at Sphere have been waging a polite and respectful war on our cousins in the space, powering related content using behavioral analysis.  We’ve believed and maintained that behavioral analysis (ie: forming relationships based on repeat user connections) cannot compare to contextual analysis of the content, mainly because readers don’t always group their reading so systematically by topic.  I blogged about this last year and our opinions/learnings haven’t much changed.  We think behavioral matching is a cool technology and extremely valuable in other applications – such as commerce.  I love the feature on Amazon.com where it tells me that 64% of users bought the item I’m looking at, 24% bought another one and still, 14% bought a third.  It makes my shopping experience more informed and leaves me feeling better about my purchases.  Likewise, it’s helpful, when buying an iPhone, for instance, to know that most previous purchasers also bought the charger set and plastic case.  Content, though, is a different story.

I don’t consume content in the same organized way that I buy stuff.  My topics of particular interest right now, in no particular order, are: politics, economics, the stock market, technology, digital media, Pitt basketball, Duke basketball, convergence, Apple products, Israel, venture capital, Brooklyn and indie music.  On any given day, I’ll peruse my rss feeds in Google reader and surf from site to site gathering news on these topics of interest.  I might read an article about Duke’s upcoming matchup against UNC, followed by an article on the stimulus bill.  Knowing my friends and their interests, there’s a good chance that many of them follow the same patterns.  The problem, for behavioral, is that these two topics have no obvious relationship to one another, yet there is no way to decipher it.  This was illustrated beautifully today in an article that appeared on our partner Time.com.  In this article about the Israeli election, like all Time articles, our contextually related links show up side-by-side with those powered by Loomia, who use behavioral analysis.  The first time I read this article, this is what I saw.  Beneath door #2, Sphere is powering related stories based on contextual analysis of this article versus Time’s archive.  All three stories seem to fit nicely into the sphere (lower case) of Israeli politics…way to go team!  Behind door #3, Loomia is powering results based on behavioral analysis (ie: users who read this also read….).   While all three stories are interesting – particularly the one about Israeli model Bar Refaeli – none of them have any real connection to Israeli politics or specifically, the Israeli election.  What’s more, when I returned to the article later in the day, I saw different behavioral results.  Since it’s based on surfing and reading habits, not on contextual analysis of the content, behavioral is especially likely to return articles that are popular that moment, but may not be later in the day after their newness has worn off and a new flavor of the moment has surfaced.  Here is what I saw the second time around.  Sphere’s results under door #2 are identical as before, as you’d expect unless a new article was published on very similar topics bumping one of these three out.  Behind door #3, there are three completely different stories, arguably even less relevant than the previous results, though Ron Jeremy can usually be counted on for a few clicks.

While this is only one example, it’s quite illustrative of our view in that it provides an opportunity to compare behavioral and contextual performance on content side-by-side.  If you’re a publisher considering the pro’s and con’s of behavioral versus contextual content recommendations, please get in touch and we’ll help you explore the the options and achieve the best performance for your site.

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