In this episode of Founder Stories with host Chris Dixon, Hashable founder and CEO Michael Yavonditte delves into the conventional (lack of) wisdom, power plays and power players that helped shape paid search as we know it today.
Yavonditte, who sold advertising startup Quigo to AOL for $360 million, previously ran business development at AltaVista. Back then, Yavonditte notes “we used to have more queries than anyone else.” Unfortunately it was during a time, as Dixon points out that “the thought was you could not monetize search.” Like most other search engines back then, Yavonditte and company got caught up in the trendy portal wars which turned out to be “a great lesson in failure” says Yavonditte.
Dixon and Yavonditte go on to discuss the search monetization void filled by Google, which was built on top of keyword advertising technology created by Idealab founder, Bill Gross. In Yavonditte’s words, it was “one of the best inventions in the history of business.”
By the time Yavonditte found himself at Quigo, Google was already cleaning up in online advertising, even with A-list clients like ESPN. But it treated everyone the same. Quigo began to “attack” Google, he says, by creating a marketplace that auctioned off top-tier home pages like ESPN as “a distinct entity” rather than say selling it as just another run of the mill destination about sports. This exclusivity led to higher revenue and to Quigo stealing clients like ESPN and Fox News away from Google.
It was quite a soap opera.
The drama continues below in part II of Dixon’s interview, where Yavonditte takes us behind the scenes of turning down a $175 million dollar offer to sell Quigo. “That was a very unpopular decision within the company” he says “it infuriated certain people.” His response? “Leadership is not acquiescing to the angry mob.”
Yavonditte’s steady hand proved right, eventually selling Quigo to AOL for $360 million shortly before Wall Street imploded. Even so, it wasn’t easy getting the deal across the finish line.
It’s a fascinating conversation—be sure to check it out below.
Also make sure to watch past episodes of Founder Stories, here.