OpenAds advertising startup earned $ 5 million

The OpenAds advertising system, which brings together all the sites that have installed the free PHP script of the same name, has attracted the attention of serious venture investors. Five million dollars is the minimum necessary margin to engage in a serious battle with Google Adsense.

A startup uses the same model that has repeatedly proven its effectiveness: distribute millions of copies of free software and do business on servicing a huge client base. That's exactly what Red Hat, JBoss, and MySQL did at the time.

OpenAds was financed by Index Ventures, First Round Capital, Mangrove Capital Partners and O'Reilly AlphaTech Ventures.

A British startup was founded as an open source project back in 1999, and the script was then called phpAdsNew. The project is still being improved by independent developers, and the startup staff is only ten people - this is quite enough in such conditions. User support is provided through forums .
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The OpenAds ad server allows you to install a standalone banner management system on any site. Developers earn profits through affiliate programs: they get paid when script users connect to one or another ad network: Adsense, Commission Junction, ValueClick, Kontera, and others. Users include the largest blogger alliance, Federated Media, Sun Microsystems, and the famous music site Last .fm. It is clear that with such clients OpenAds has a good income.

Interestingly, the most popular advertising system among OpenAds users is the Adsense system - the very system that analysts record as potential competitors. In such a situation, there is no need to talk about competition.

To date, the script has installed 25,000 websites. The OpenAds system is especially popular in Russia, Poland and Brazil, among users of other open source products, free CMS, such as Drupal and WordPress. Only 30% of installations are in the USA. In total, the OpenAds script processes 60-100 billion pages per month. For comparison, at DoubleClick, this figure rolls over 300 billion.

via Reuters , O'Reilly Radar