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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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AdBurner – Solving A Problem That Exists

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Yesterday, NewsGator announced the release of their AdBurner Online Advertising Program.  AdBurner is a partnership between NewsGator, Technorati, AdMeld, Gigya, Medialets, and Tremor Media.

If you’ve been following NewsGator’s progress, you know that they have two major parts to their business – their (1) enterprise products and (2) media products.  They had an excellent year in 2008 with significant growth on both sides of their business along with an especially strong Q4.

With over 100 active customers on the media side of their business, NewsGator kept hearing the following things:

  1. Can you be a single point of contact for our display media purchases for our digital properties?
  2. Can you deal with all of our remnant ad inventory – 50% of our traffic is remnant and we know we aren’t getting paid anything for it?
  3. Can you help us sell ads in all the widgets you are delivering for us?
  4. Can you put advertising in the iPhone app you are building for us?
  5. Can you help us with pre-roll video in the video widgets you are delivering for us?

Last fall a group of us started talking about how to accommodate our customers’ requests for these things.  There’s a longer list of “can you …” but we decided to focus on these five issues as they came up regularly in our discussions with our customers.  I suggested strongly that we should partner with other companies to deliver these services to our customers.  The consistent message from our customers is “we love working with you guys – will you just take care of all of this stuff for us?”

AdBurner is the result.  NewsGator has partnered with and integrated Technorati (#1), AdMeld (#2), Gigya (#3), Medialets (#4), and Tremor Media (#5) into a single offering.  While Technorati and AdMeld are investments of ours, Gigya, Medialets, and Tremor are not so NewsGator chose from a portfolio of potential partners that were like minded, interested in using NewsGator as an indirect channel (to NewsGator’s existing customers), and recognized the value to the customer of delivering a portfolio of services through one company (in this case, NewsGator).

As I mentioned above, there are a lot more “can you questions” that our customers are asking us (#6 through #17) and now that NewsGator has released the initial version of AdBurner, they are starting to explore the next wave of partners for their media products.  All of this is being customer driven and is in response to real customer needs, which I find to be particularly powerful.

The Re-Rise of Open Source

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Kevin Kelleher’s article on GigaOm this morning titled 2009: Year of the Hacker made me think back to the rise of open source after the Internet crash of 2001.  In the aftermath of the crash, many experienced software developers were out of work for a period of time ranging from weeks to years.  Some of them threw themselves into open source projects and, in some cases, created their next job with the expertise they developed around a particular open source project.

We are still in a tense and ambiguous part of the current downturn where, while many developers are getting laid off, some of them are immediately being picked back up by other companies that are in desperate need for them.  However, many other developers are not immediately finding work.  If the downturn gets worse, the number of out of work developers increases.

If they take a lesson from the 2001 – 2003 time frame, some subset of them will choose to get deeply in an open source related project.  Given the range of established open source projects, the opportunity to do this today is much more extensive than it was seven years ago.  In addition, most software companies – especially Internet-related ones – now have robust API’s and/or open source libraries that they actively encourage third parties to work with for free. The SaaS-based infrastructure that exists along with maturing source code repositories add to the fun.  The ability to hack something interesting together based on an established company’s infrastructure is omnipresent and is one of the best ways to “apply for a job” at an interesting company.

We are thinking hard about how to do this correctly at a number of our new investments, including companies like Oblong, Gnip, and a new cloud-computing related startup we are funding in January.  Of course, many of our older investments such as NewsGator and Rally Software already have extensive API libraries and actively encourage developers to work with them.  And of course, there are gold standards of open source projects like my friends at WordPress and masters of the API like Twitter.

If you are a developer and want help engaging with any of these folks, or have ideas about how this could work better, feel free to drop me an email.

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