Web innovator back for 2nd act

TidalTV.com pairs ads with free premium content

June 10, 2008|By Tricia Bishop | Tricia Bishop,Sun reporter

It was August 2006, and Scott Ferber was badly in need of a new idea.

A few months earlier, he'd walked away from Advertising.com, the Baltimore business that he and his brother built and later sold to AOL for $435 million. Ferber stepped into the unknown without much of a plan for a second act, but then the entrepreneur gods smiled on him, just as he got off the JFX, and he was hit with an epiphany while driving in his car.

Yesterday, Ferber launched the result: TidalTV.com, his new company and Web site that focuses on advertising-supported video online.

The site is an online television channel that delivers free premium content - shows from the major networks and cable companies as well as other media, including Vogue magazine - on demand. In exchange for the entertainment, providers get what they need most: advertising to pay for their operations.

So where Advertising.com specialized in pairing targeted ads with print-based Web sites, Baltimore-based TidalTV will pair ads with video online and then share in the revenue that those providers earn.

It's not a new concept. Once broadband Internet access became the norm rather than the exception, businesses started cropping up, offering varying degrees of video online, from the homemade to the high-end, and supporting themselves through advertising.

In the past few years, the top eight such sites raised about $366 million in venture capital, sasid Will Richmond, a broadband analyst based in Boston who publishes online at VideoNuze.com. TidalTV falls on the low end of the scale, raising $15 million so far through one round of financing closed early this year.

But what makes it stand out, Richmond says, is its user-friendly interface and Ferber's advertising cachet.

"That's a key [difference] for TidalTV: Their founders come with a very strong advertising background," Richmond said. "Their task is to capitalize on that, to demonstrate that they know the advertising business and how to monetize content."

Ferber, 39, and his younger brother, John, founded Advertising.com a decade ago, steadily building it into an Internet marketing leader. By the time AOL acquired the company in 2004, Advertising.com's ads were published on more than 1,500 sites and reached about 70 percent of all U.S. Internet users. It was named the top online advertiser that year by comScore Media Metrix and is now at the center of AOL's efforts to reinvent itself.

But the Ferber brothers left the business in 2006 and set out on their own. Last year, John Ferber announced a string of new Internet ventures, a social-networking site and a beauty pageant site among them. But Scott Ferber has been relatively tight-lipped about what he's been up to for the past two years, until now.

"I basically am back in my wheelhouse to a certain degree," he said, using the baseball term for being in your zone. "I'm going after the next thing, I've handed off the last one, and it was fantastic. ... This is a pioneering effort."

Cruising along Lombard Street just off the Jones Falls Expressway two years ago, Ferber got the idea that broadband was coming of age. And pretty soon, he thought, watching video, the "sight, sound and motion," would be the norm online (evidence, YouTube). That opens up a whole world for advertising, somewhere in the neighborhood of $225 billion, by Ferber's calculations.

"I thought it was a pretty big playground," he said.

While teaching a class at the University of Virginia, Ferber put the engineering students to work vetting the idea until he was sold on it last June. He put "several million" of his own dollars into the project, put together a core team of workers and raised the $15 million in venture money, finally launching the "beta" site yesterday. He wants people to test it, offer feedback and help tweak it into the kind of place consumers want to spend their time.

TidalTV has about 25 employees, including a former Fox Broadcasting Co. executive and several people from Ferber's Advertising.com days, in particular Chief Executive Officer Mollie Spilman. She was the chief sales and revenue officer at Advertising.com for nearly seven years before joining Ferber in this new project.

She has launched two marketing magazines in her career and worked at an Internet advertising startup in the late 1990s, but this, she said, is "definitely a new adventure." Spilman wouldn't have taken the risk if Ferber weren't at the helm. Now, she talks about the company and its plans with the same enthusiasm that Ferber does, her words tumbling over the others.

Spilman envisions the site helping to draw readers to magazines and newspapers by giving the print media a place to display their video online - like Vogue's fashion shows and news programs from Dow Jones - with consistent advertising support.

"I really do think there's a huge opportunity," Spilman said.

The broadband video space is a very hot concept right now, Richmond said. But there are challenges to working in the niche. There are a lot of competitors out there, and each of them has to "live in the long shadow of YouTube."

That doesn't intimidate Ferber.

"I have the real experience of actually building a world-class team in the advertising and media business, and I understand information technology fundraising and recruiting," Ferber said. "All those things are what I think give me a leg up."

tricia.bishop@baltsun.com

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