Israelnewsletter.com had the opportunity to sit down with serial entrepreneur Yaron Galai, Co-Founder and CEO of Outbrain, who sold his last startup to AOL, to talk about his newest venture.

Can you tell us a bit about your background?
Yaron Galai, Co-Founder, Outbrain: I’ve been an entrepreneur since I can remember myself working… Actually realized recently that I have never in my life sent my resume applying for a job. I am now working on my 4th company called Outbrain. My first company, in which I was more or less the only employee…, was called NetWorks. It was one of the first web design shops in Israel. I started doing that around 1995 or 96 when the first Netscape browsers just came out. I ended up developing about 30 or 40 websites for companies in Israel. Doing this alone, I had to figure out all aspects of launching a website – HTML, hosting, design, SEO, etc. In retrospect I guess that was slightly insane, but it did give me some decent insight into the whole internet thing, as well as into running a business. I ran NetWorks for about 3 years, and all while studying product design at the Holon Institute of TEchnology (www.hit.ac.il), so it was pretty much all done on a moonlighting/weekend basis. This might have been part of the reason that I had failed to graduate and have never received an academic degree…http://www.outbrain.com/get/

After NetWorks I co-founded another company called Ad4ever which was a rich media ad serving platform. That company was later sold to Atlas, which was later acquired by Microsoft, but that sale happened way after I left the company so I can claim 0 credit for that happening.

I left Ad4ever because I had this idea for serving people on the web with interesting and contextually relevant links. I joined forces with my co-founder – Oded Itzhak – and we merged both of our ideas to one company which we called Quigo. After a couple of years of iterations, our product evolved into a contextual ad network. We ended up serving contextually relevant text ads on top-tier publishers, such as ESPN, ABC, FOX News, etc. That business grew quite nicely and we eventually sold it in 2007 to AOL.

Tell us about Outbrain.
YG: Outbrain’s goal is very simple – To serve readers of blogs and news sites with interesting and relevant links to other stories. I love reading blogs, magazines and newspapers, but I always feel overwhelmed with the amount of content that’s available. Blogs specifically create this massive flooding of content that’s impossible to sift through today. With Outbrain we wanted to help readers to easily find great articles or blog posts in an easy, quick and automated way. We offer bloggers and publishers a free service that they can place under each story they publish. Our system then automatically places highly interesting and contextually relevant links to other stories on each of those pages. For the blogger/publisher, this service provides a great user experience, it generates more traffic for them, and it gives some feedback on the content they produce. Again – the service is completely free, and can be installed in less than 2 minute on all major blogging platforms such as Blogger, TypePad, WordPress, etc:

We believe that good recommended links have to be personalized for each individual reader, and so over time, as our algorithm learns of the reader’s reading taste, our recommendations become increasingly personalized.

Have companies using Outbrain, seen an increase in traffic?
YG: Yes – all bloggers/publishers who install Outbrain see an increase in traffic. And as our service is completely free to the blogger, that increased traffic can be fully monetized by them with ads.

But that’s not the only way we let bloggers/publishers make money. We’ve also recently introduced an advertising program which we call Sponsored, But Good™. The idea here is to apply our same principals of serving interesting stories to our advertising. Advertisers pay us to drive traffic to interesting stories, reviews and blog posts written about their company. We put a lot of emphasis on ensuring that the stories submitted by advertisers are both authentic and interesting. We then share the revenue generated with the bigger bloggers/publishers, and let the smaller ones donate some of the revenues to a charity of their choice. More information about our Sponsored, But Good™ program is available here: http://blog.outbrain.com/2009/02/sponsored-but-good.html

So when a blogger installs our service, they don’t only improve their site and user experience, but can also make money in two ways – increased traffic that they can monetize via ads, and revenues from our sponsored link service.

What are the risks to your business? Is there any competition?
YG: Yes – there are quite a few companies that provide related link functionality to publishers and bloggers. Some charge money for the service, some offer contextual links without personalization, etc. We like keeping an eye open on competition, but don’t pay too much attention to it as we found it is much more important to listen to our customers (bloggers specifically). We’re pretty obsessive about supporting our bloggers and helping them be successful using the Outbrain service.

As far as risks go – I think our biggest risk is of losing focus on what we do best – serving readers with highly interesting, relevant links to other stories. As a startup it is very easy to get tempted with “opportunities” and spend lots of resources on things that seem important for the company for a moment, but don’t really matter to the customer. That is the silent killer of most startups. We put a lot of effort to remind everyone on our team that we have to focus on providing our bloggers a great widget and terrific customer support, and provide the readers with great links. Losing that focus is likely our #1 risk.

Thanks.

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