Gator is Dead. Long Live Claria

The company that annoyed countless Net surfers with its adware is reinventing itself with a new custom portal service

Can the oft-maligned adware company once known as Gator go straight? The world is about to find out. The company is now called Claria, and it's turning over a new leaf.

Claria has already announced plans to get out of adware, the software that largely annoys Web users by delivering pop-up ads. On Apr. 3 it's unveiling a Web service called PersonalWeb.

To do it, Claria also is getting a big wad of funding -- to the tune of $40 million –- from Japan's Softbank, Canada's Rogers Communications (RG) and venture-capital firms Sand Hill Capital and Asia Pacific Ventures. It also landed a joint venture with Yahoo!'s (YHOO) Japanese division.


Claria Executive Vice-President Scott Eagle says the moves represent the clearest steps yet in a campaign to rehabilitate the company's image. However annoying to Web surfers, Claria's advertising has given it a keen understanding of online consumer behavior. The company wants to use that experience to deliver advertising and content related to things consumers are already interested in.

PersonalWeb aims to do that by creating a personal, customizable Web environment –- without the intrusion of the pop-up ads that so tarnished Claria's reputation. The service begins beta testing on Apr. 3 and rolls out officially later this year.

"We had relationships with 40 million consumers, and we had a large share of the adware category," Eagle says. "But we wanted more of a mainstream advertising opportunity, and lots of partners said they liked our platform."

One thing they didn't like: pop-ups, Eagle says. Rather than advertising, PersonalWeb will be harnessed to deliver content –- Web articles, videos, and other online matter meant to entertain and inform users, not necessarily sell them something they don't need. Instead, they'll build their own automated Web portal that aims to delivers editorial content based on the user's preferences.


. The product could compete with portals like Yahoo News, Google News (GOOG), and Microsoft's (MSFT) MSN network. But whereas the Web portals tend to let users pick and choose the sources of stories and other information, PersonalWeb will automate the process, based on the user's Web habits. Start with a simple page that delivers news headlines, and after a few hours of Web use, the PersonalWeb page would add new areas of content.

Over time, the site populates and repopulates itself with different content from various providers -- Claria calls them gizmos -- as the user's interests and needs vary. Users can add a gizmo to a site permanently, as well.

Claria's research indicates 7% of the population customizes and personalizes home pages, Eagle says. "And when they do, they spend twice as much time clicking on that home page because the content is more relevant to them," he notes. "But over 90% of the population doesn't customize their home page, and when we asked why, many said they didn't know how to do it, or they didn't have time. But they said they like the benefit they get from it."


Eagle says although the company has a lot of data about consumer behavior, none of the info is keyed to a particular person. "We collect no personally identifiable information –- no last name, no address, no e-mail, no IP address," he says.

"What we do track is a robust profile of your interests, anything that indicates content interests or commercial intent. If you're an avid golfer who likes to travel a lot and is very loyal to Expedia and is interested in photography and scuba diving, we won't know who you are. But [we] may give you content you're going to be interested in. And if you never click on it, we slowly move it off your page."

In 2003, Claria flirted with the idea of going public and filed the necessary paperwork with the U.S. Securities & Exchange Commission. That year it reported an $8.5 million profit on sales of $90 million. It never did go public, but went on to disclose that sales in 2004 grew to $117 million.

Eagle declined to disclose revenue for 2005. "We pulled the IPO because we knew we were going to be doing things that were counter to growing the adware business," Eagle says. Like getting out altogether.
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