Just flip the business model

We have on the knoxnews.com Web site something called Quigo ads.

They are text ads much like the "Goooogle Ads" you see everywhere. I knew that story.

But I didn't know much about the Quigo company story until I stumbled upon Yaron Galai's "Web X.0" blog and his "sixth anniversary" post on Quigo.

Galai says he was originally working on the idea of a 'forward button" for Web browsers. Ah, OK.

He hooked up with co-founder Oded Itzhak to form the company through a friend of Galai's brother's wife.

The central problem -- or need -- the Israeli techies saw and addressed was:

search engines aren't properly exposed to some of the most valuable content and product pages on the web (now commonly referred to as the Deep Web), and therefore we'd develop a gateway for the search engines into those pages. In essence, we identified the need to expose product pages from ecommerce sites (and not only sites' home pages) to users searching for those products on search engines.

And now we're getting to the part I like about this story.

The original business plan was not only a little off, but totally wrong, a total dud. They ran out of money not once, but twice. They paid employees with promissory notes!

Their idea was to license the cool technologies they'd developed to the search engines.

It didn't work. No money was coming in.

They flipped the business model.

... instead of asking the search engines to pay us (for the technology), we'd pay them! We'd charged ecommerce sites for the exposure on the search engines, and share the revenue with the engines.

While the model spun like a compass, they stuck to their belief in their products and innovated their way to the business model that lead to signing up a pack of major publishers as partners.

It didn't happen without adversity. Fifty potential investors in Israel and the United States gave their plans a thumbs down.

Today, they're in in one of the hottest ends of Internet advertising contextual sponsored links and pay-per-click advertising.

Quite a story.