Last week, AOL purchased L.A.-based startup Gravity, a service that personalizes users' web and social searches. The $83 million purchase price is testament to the value of automated recommendation for a wide range of industries. In buying Gravity, AOL also acquired some new competition.
Gravity's biggest adversaries are two Israeli companies, Outbrain and Taboola. Small but noteworthy startups like Nara, Swayy, and MindMeld are also gaining traction in the field. Services like these use algorithms to determine user preferences, delivering content, ads, or other recommendations accordingly. Think Amazon or Pandora, but for the whole web.
Gravity's two biggest competitors take different approaches in personalization. Outbrain compartmentalizes the items you look at online into four categories: what's trending, what's relevant, the behavior of similar users, and a personal filter that won't recommend something you've already seen. By combining the analysis of these factors, Outbrain supplies personalized recommendations that people keep happily clicking, watching, and reading. And they have racked up a boastful list of publishers as clients so far including CNN, Fox News, Hearst, Sky News, the Guardian and the Sun.
Taboola's recommendations are famous for their "Content You May Also Like" callout. The company works with publishers, marketers, and brands looking to deliver the content users will consume next. Their algorithm for recommending content is similar to that of Outbrain's, looking at four key factors: social, similarity, personalization, and context. Initially, they used videos as their vehicle for customization, but have since expanded to other types of content. As of last year, Taboola was the industry leader for paid content discovery, servicing Time.com, the New York Times, USA Today, Bloomberg, the Weather Channel, and BusinessWeek.
Some smaller and still-developing startups are heralding extreme innovation when it comes to the rat race for a customized Internet. Nara is a cloud-based neural network, developed by a group of neuroscientists, computer scientists, astrophysicists, artists, and entrepreneurs. Their mission is to shorten your search time using artificial intelligence to give you personal recommendations. For now, Nara amasses data, indexes information, and gives you restaurant or hotel recommendations based on your preferences. The search engine will give you human-like suggestions and with increasing interest and financial investment in the company, they will eventually expand the technology into other facets.
Swayy is a content recommendation service with a strong focus on social. It bases its content suggestions on items you have shared in the past, the interests of your followers, and the genre of your brand. What differentiates Swayy is that they make recommendations by using a crowdsourcing platform, studying trending content and user behavior. They just launched a Chrome web extension, which recommends three relevant articles to you after you have shared an item online.
Newly released MindMeld, from Expect Labs, literally eavesdrops on your conversations and can surface answers to questions before you have even asked them. MindMeld, dubbed the virtual personal assistant, is a speech activated iPad app—so it listens as you talk, takes notes, and then offers you pertinent articles, apps, videos, pictures, etc. The app is a competitor to Google Now and Apple's Siri, which have dominated the personal assistant arena to date. MindMeld seems to take the idea one step further with high-level computation as it anticipates what you may want. This is personalization at its best because the app has heard you and now knows you, skipping all the lengthy algorithms of the other catering startups.
For some consumers, content personalization and targeted advertising raise serious privacy concerns. Others find it more relevant than traditional media. For advertisers, the potential is unmistakenly huge.