• by Mark Naples , April 7, 2006

You would if you were Claria. And man, are they doing it in style.

Claria had announced plans to get out of the adware business on March 21. This week, the company announced the launch of a Web service called PersonalWeb that seems to be designed to compete directly with portals like Yahoo News, Google News, and Microsoft's MSN network, though this comparison limps a bit, since this is partly a joint venture with Yahoo's Japan Division.

What Claria is launching seems to me more of a direct shot at how they think the MySpace generation wants to consume Web content, with maximized, efficient monetization to follow.

See, while the Web portals listed above enable users to pick and choose their news sources and other information, PersonalWeb will automate the process, based on the user's Web habits. Users that begin with a straightforward page that delivers news headlines would add new areas of content fed to them dynamically and updated on the fly based on their browsing habits. These smart algorithms would, in turn, inform an ad-serving management system that would leverage the same kind of predefined taxonomy to discern which ads or promotions made the most sense to send these users and at which time. Think contextual and behavioral ad serving rolled into one--with no personally identifiable information ever collected, no pop-ups, and no system-slowing software downloaded--very similar to, but significantly different from, Claria's former model.

Previously in this space, I have been perhaps a bit critical of Yahoo for not better taking advantage of the 120 million users who have "My Yahoo" home pages. Typically, these home pages are filled with all manner of personalization, including local weather, stock quotes, sports scores, etc. But, ads that appear on these pages are predominantly part of roadblock buys that occur across all of Yahoo. Even when they aren't, they are seldom targeted with any precision.

However, it looks as though Yahoo's Japan Division is the beta for what may be a long-term contextual strategy for Yahoo elsewhere around the world. After all, Yahoo and Claria have deep ties, with as much as 30 percent of Claria's revenue in its largest years coming from revenue derived from Yahoo. It wouldn't surprise me one bit if we're hearing about Yahoo acquiring Claria in a year or two on the heels of the success of PersonalWeb--and developing a global strategy that looks substantially different from how its chief competitor has been doing business. Yahoo may not need something like this in time, but it couldn't hurt.

For now, Claria is largely funding this launch through a $40 million investment garnered from Japan's Softbank, Canada's Rogers Communications and venture-capital firms Sand Hill Capital and Asia Pacific Ventures. Claria said it will use the funds to develop PersonalWeb and that it also plans to use the investment to expand the U.S. distribution of PersonalWeb with online publishers, ISPs, and other software application providers. The company hopes to have the beta product gathering subscribers in roughly eight to ten weeks, just about when it hopes to sell off its adware business assets.

"This has been months in the making," said Scott Eagle, Claria's CMO. "We had relationships with 40 million consumers, and we had a large share of the adware category," Eagle says. "But we wanted more of a mainstream advertising opportunity, and lots of partners said they liked our platform."

Remember--almost half of the companies named in the lawsuit against Claria a few years ago were Claria clients. These guys know a ton about how to gather consumer behavior online and target against that behavior, and they've clearly been serious about rehabilitating their image for some time, from the hire of Reed Freeman as their privacy officer two years ago, to the filing of their S-1 with the SEC, to the perhaps somewhat inelegant dance with Microsoft last year. Now that they are aligned so transparently with Yahoo in Japan, this new venture bears close watching.