NEW YORK (AdAge.com) -- When Matt Freeman left the CEO post at Tribal DDB last year to helm GoFish, the first thing many of his colleagues in the ad industry wondered was, "GoWhat?"
And rightfully so. The tiny company's stock trades on the OTC Bulletin Board for 20 cents, and its pedigree could easily leave some confused as to what exactly its business is.
But Mr. Freeman's vision was to create a media-sales company built on the idea that the value of media will be based on the amount of attention it garners, not just sheer numbers of people it reaches.
The ultimate turnaround
If he succeeds, it will be the ultimate turnaround story. But he's got a long way to go.
Today, he makes an early move to recast the company, rechristening it Betawave. What started out as a video search engine before becoming a video-sharing site -- a sort of poor man's YouTube -- now makes money selling ads for other online gaming and virtual-world sites, such as WeeWorld, Cartoon Emporium and, its newest addition, Shutterfly. It's a classic rep-firm model, similar to the arguably better-known Gorilla Nation.
"[The publishers] going direct to advertisers, it would be difficult for them to get attention," Mr. Freeman said. "We provide a way for midtail, high-quality publishers to band together and make sense for major advertisers."
Third among sites
He counts as a bragging right -- and the central selling proposition -- the amount of time people spend on the sites Betawave represents. According to December ComScore data, provided by Betawave, it ranks third among internet sites in the amount of time people 18 to 34 spend on it. In terms of unique visitors, it lies somewhere between Photobucket and Disney Online with 7.8 million 18- to 34-year-olds. But for teens ages 12 to 17, it doesn't compete for reach with traditional ad networks or portals; ComScore doesn't publicly release kids'-site audience data. Still, the time people spend on its sites has been enough to snag some early advertisers. The company has worked with marketers such as Nestle, Sears, Activision and Kraft to create things such as a branded games and virtual branded goods.
"When we're trying to get some scale on tween side, there's only so many properties you can work with," Tom Penque, VP-group account director for MediaContacts. "They offer a product to that demo we're looking for that resonates." He evaluates GoFish-cum-Betawave in the same bucket that he evaluates some of Viacom's Nickelodeon sites or IAC's Zwinkys.
But Mr. Freeman sees himself in a different competition set -- up against the large internet portals. "Look at it from major brand marketer's viewpoint," he said. "If you need mass reach, you have two choices: portals or midtail sites that are garnering an engaged audience."
His example for how Betawave could sell its newest site, Shutterfly, involves going to a marketer of baby products and allowing them to own the new baby community by sponsoring tools and services to help people upload, edit and share baby photos. "[It's] adding a service to the community vs. advertising on the community."
Infusion of capital
While it has added to its network under Mr. Freeman, perhaps his biggest achievement since taking the reins has been raising $22.5 million cash in December 2008, one of the toughest months for raising venture capital. The investors included Panorama Capital, Rustic Canyon Partners and Rembrandt Venture Partners.
Mr. Freeman believes his company will make good on the investment with its new model -- not owning any content but selling other sites' content. In fact, he's somewhat skeptical of owning content.
"You take the full the cost responsibility before you recoup any of the media potential," he said. "Our model is to find best media companies that have attracted audiences on their own merits and be their brand avenue into monetization. We don't assume any of the costs on our own balance sheet."
Of course, not everyone can take that point of view, or Betawave wouldn't have anything to sell.