News: Portfolio 2007

Holt, Kopelman collaborate on search-marketing firm

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With a small but undisclosed amount of money from First Round Capital and Terrapin Partners LLC of New York, Danuloff founded Commerce360 and rolled the Precommerce Group into it. At the same time, Holt joined as CEO.

 

Although Commerce360 helps companies tweak their online sites so links show up more frequently in the unpaid sections of search result pages, most of its business comes from helping them buy ads that appear in the sponsored sections.

 

Search engines use algorithms to determine what links appear in those sections. Companies that want their ads to show up must consider the keywords they want to bid on, how much they want to bid on each word, whether they want to match just those words or synonyms, and what they want their ad to say when it shows up.

The complexity of the process led Commerce360 to conclude there was a market for software that would automatically devise the best strategies for dealing with paid search algorithms.

 

The company took in a larger, but still undisclosed amount of venture capital from its first two funders and PA Early Stage Partners of Wayne, and developed its ClickEquations platform.

 

It was helped in that task by Kartik Hosanagar, an assistant professor of operations and information management at the University of Pennsylvania's Wharton School, who has worked on the paid-search algorithms used by Yahoo and Google.

 

Commerce360 has increased its staff to 30, including six people who worked with Holt at TurnTide. Its customers include Comcast Corp., Edgar Online Inc., which provides Securities and Exchange Commission filings over the Web, and the Franklin Mint.

 

"They really have put together a good team of knowledgeable people," said Steven Sisskind, the Franklin Mint's CEO. "The problem in the online world is there are so many options and vendors

 

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