Cape Town start-up takes aim at Google - TechCentral

Cape Town start-up takes aim at Google

Sean Riley

How’s this for chutzpah? A Cape Town-based start-up, Ad:Dynamo, is taking direct aim at the heart of Google’s business, its Adsense service, with a rival pay-per-click advertising marketplace.

The company, launched last year, has attracted the interest of billionaire businessman Johann Rupert — Remgro’s InVenFin has acquired a 35% stake in Ad:Dynamo for an undisclosed sum.

Now Ad:Dynamo founder and CEO Sean Riley, pictured, is eyeing Europe and the US as he prepares to take the company onto the international stage. Already, more than 15% of its revenues are generated from offshore advertisers.

But how can a small SA-based start-up expect to take on a giant like Google?

Riley believes Google has had a free ride, in part because people have been too scared to take it on.

Riley, who also founded Web development company Entelligence, says Ad:Dynamo is transparent in the revenues it shares with online publishers – unlike Google, which does not disclose these figures. Fifty percent of all advertising revenue Ad:Dynamo receives is given to publishers who display the ads on its behalf, he says.

He adds that the unhappiness among some newspaper publishers, including News Corp and, locally, M&G Media, could play into Ad:Dynamo’s hands.

“People forget [News Corp chairman] Rupert Murdoch owns the content and pays the journalists and he can do what he likes with that content,” Riley says. “If they shut off Google from a search perspective, it will hurt them in the short term, but in three or four years it may have helped them and made Google less of a monopoly in terms of where people source information on the Internet.”

About 85% of Ad:Dynamo’s business comes from SA advertisers, and Riley says he will use the country as the base for its expansion into the rest of the world. Already, Ad:Dynamo is serving more than 50m ads a month to websites in Europe and the US.

Riley says Ad:Dynamo, which employs 18 people, has no plans to sell to a bigger market player, such as a media company — at least not yet. “It’s not a priority for us,” he says. “We’re already breaking into being a profitable business and for now we plan to ride this and see how much market share we can take.”  — Duncan McLeod, TechCentral

8 Comments

  1. Hopefully their ad inventory improves – they have really low quality ads and generated VERY little revenue for me. Adsense FTW

  2. Well done guys and watch out Larry and Sergey!
    And a few words to the Mogra dude -> bad taste and maybe, just maybe it’s your site.

  3. Sean Riley, when are you going to learn to stop using anti-Google antics to further yourself?

    First your absurd competition commission rants claiming Google is anti-competitive (simply because your agency cannot innovate and creatively position your value propositions) and now this. Do you honestly believe your adsense cloning/copying idea, a complete lack of originality/innovation, is going to have *any* competitive chance against Google?

    Yahoo! and Microsoft have the same adsense capabilities for several years now and their content networks are extensive. I simply laughed when I read that you say Google has had a “free ride” and people are scared to take it on – that line is completely absurd, lacks investigative journalism qualities, and makes me question the quality of these compilations on Techcentral.

    Have you or the journo behind this article even consider what investments it took to build Adsense? Do you have any notion of the amount of funding that went into building the content network relationships/inventory…which is the underpinning value that Google has for Adsense…? “Free ride” is rather simplistic!

    Then this “editor” says; “taking direct aim at the heart of Google’s business, its Adsense service” – LOL – Adsense is definitely not the “heart” of that company’s business – why not share the figures and tell us a little more of the revenue distribution of the content network across geographies? It’s all in Google’s financial statements! Take a look and you will see that Search resultant page ads are still the dominant mechanism for revenue generation!

    Your comments regarding Rupert Murdoch is again you just being opportunistic and leveraging the media noise around this debate…and your comments are probably the most anemic and pathetic take on the matter I have read.

    Your corrupt actions were surfaced via your amazingly successful Entelligence stint (SO NOT!)…Google caught you out…you ran off and nagged to the competition commission and now you’re just repeating your actions.

    Get off your anti-Google positions and start truly innovating Mr Riley…and stop using gullible South African journalists to further your causes – actually quite humorous!

    Johann Rupert, maybe you should do some more asking around before investing undisclosed sums of money into spin-doctoring like this! This isn’t innovation – it’s short sighted copy and pasting of innovation that has occurred several years ago!

    My name is Leonard Van Heerden and I work for one of the largest digital agencies in South Africa and I know people who have worked for Sean at Entelligence…who know the real Sean!!

  4. Leonard, you offer valid criticism of this article. We were not aware of Sean Riley’s history with Google when we interviewed him. We were not aware of the fact that his previous company, Entelligence, lodged a complaint against Google at the Competition Commission. That obviously has a direct bearing on this story and, despite the fact that Riley didn’t mention this in our interview, it was remiss of us not to pick it up. TechCentral prides itself on the high quality of its journalism and, in this (rare) instance, we didn’t do all the legwork required of us. We hope not to repeat the error.

    As for your criticisms of Riley, we’ll allow him space to respond, if he wants to.

  5. Leonard

    One of the founders of AD:DYNAMO (namely Entelligence) did lodge a complaint against Google. I’m sure if you knew all the facts you may not think that the complaint was without grounds. Stafford Masie (then Google SA Country Manager) threatened us (yes, in writing) to hand over a key account or Google would disable Entelligence’s AdWords accounts to prevent them from servicing a key customer. This is not competition – it is abuse. That case happens to be ongoing & much of the same abuse has surfaced. Entelligence has been a successful web agency for over 10 years. Not many of those around.

    AdSense, by my understanding, represents 40% of Google’s ad revenues. This 40% is 10 times the collective advertising revenue of both Yahoo! & Microsoft. So, AdSense represents a sizable portion of advertising revenue globally.

    Microsoft has no contextual ad delivery service that assists 3rd party publishers to monetize their content. Yahoo!’s has been in beta for 6 years & has just officially closed down.

    Finally, our antics are not ‘anti-Google’ – they are simply opportunistic. AD:DYNAMO brings choice to a marketplace that offers very little. We see a business opportunity (and obviously so do our investors) – but you are, of course, are entitled to your opinion & only time will tell who is right.

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