Former Sprinks Execs Land at Kanoodle

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The former management team at paid listings company Sprinks joined small search company Kanoodle in the hopes of building a rival contextual listings offering to Google's AdSense.


Kanoodle, Amherst, NY, said today that it hired the management team from Sprinks, which Google acquired in October and shut down at the end of November.


Lance Podell joins Kanoodle as president; Mark Josephson as senior vice president for marketing and business development; and Doug Perlson as senior vice president for partner development and operations. All three held executive positions at Sprinks, which was part of Primedia's About division.


With the three onboard, Kanoodle plans to launch a contextual listings product much like that formerly offered by Sprinks. With contextual listings, an advertiser's keyword text listing is placed on a content page with relevant content. For example, a Web page about a NASCAR race would display advertiser listings for NASCAR memorabilia or tickets.


Kanoodle operates a network of second-tier search sites, distributing its paid listings on meta-search engines like Infospace and more than 2,500 small sites. It boasts about 18,000 advertisers.


Podell said the text-listings product, called Kanoodle Kontext, would launch in a few months. He expects it to compete directly with Google's AdSense, which places listings from Google's 150,000 advertisers on a wide network of distribution sites that ranges from Weblogs to iVillage and Weather.com.


"Google is clearly the top player right now that's most focused on content outside of us," Podell said. "I still think we've got the better product."


After acquiring Sprinks, Google informed its advertisers that it would shut the service. Sprinks listings have disappeared from its top distribution partners CBS MarketWatch and Forbes.com. The Sprinks Web site now redirects to Google's advertising page.


"At Sprinks, we felt we got cut off at the knees when things were getting interesting," Podell said. "I think Google knew that Sprinks was well received in the marketplace. They hoped they could put out the competition that put out the better product."


A Google representative was unavailable for comment.


The market for contextual listings remains small compared with the booming paid search industry. Investment bank U.S. Bancorp Piper Jaffray estimates contextual advertising will generate $100 million this year, growing to $1.4 billion by 2008.


"It's a good way of using ad space," said Gary Stein, an analyst with Jupiter Research. "There should be more than one player in a good market."


Podell said Kanoodle Kontext would follow Sprinks' lead in differentiating from AdSense by focusing on selling categories. For example, an advertiser would bid on the financial services category, which would supply listings on pages that have financial information. Google matches listings using its search technology to determine the content of a page.


Kanoodle will sell the context listings separately from paid search, addressing a major concern of many AdSense advertisers that listings on content pages do not get the same clicks as those on search results pages.


In addition, Podell said the product would have new features, such as the ability to pause ads, display them at a certain time of day, and set bidding parameters.


"We're looking at all of the potential publishers of quality Web content that converts for advertisers," he said.


To fund the expansion, Kanoodle secured a round of financing led by Insight Venture Partners. CEO Kent Keating said the financing was in "double digits."


"We're now entering the marketplace with a big splash," he said. "We were fortunate to find the guys that built the best product out there."


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