It’s announced that AOL acquired Sphere, which started as a blog search engine and then moved into providing related content links for web publishers. Prior to the acquisition, AOL partnered with Sphere to offer its widget technology on AOL News and the myAOL service.
I think that the Sphere investors sold the company just in time. Sphere was among the first companies who started providing related links but the real business is to help selling contextual advertisements more efficiently. The company was founded three years ago and raised more than $4 million over two rounds. The acquisition price is rumored to be $25 million.
I have not seen if Sphere introduced any innovative online advertising alongside its content related widget. If they have done, I think the price would have been much higher.
The acquisition shows that there is a growing demand among content owners and web publishers to make site search and navigation easier and increase loyalty of users. The publishers also want to better monetize the traffic by increasing page-views and clicks-through. By reportedly increasing page-views, Sphere only touched that demand.
The real sweet cake is to help web publishers to better monetize user traffic through new type of on-site contextual advertisements.
As an example, check the graphical ads in the interactive site search cloud that we just implemented on ReadWriteWeb.