Snap.com Puts Hyperlinks in Context

LOS ANGELES Expect more hyperlinks to become ad vehicles in the near future.

Snap.com, a three-year-old Pasadena, Calif.-based search company founded by paid search pioneer Bill Gross, is adding “contextual” ads to its network of Web-site previews. When a user moves his or her cursor over a Snap-enabled hyperlink, a call-out box pops up that looks like a comic-book dialogue bubble. That box will now include a sponsored text link or banner ad.

About 2 million Web site operators, such as TechCrunch.com and Xanga.com, have added the Snap Shot boxes to their sites. Paul Angles, marketing director at Snap, said that the contextual information is accessed about 15 million times daily, ranking it as comScore’s 23rd largest Internet advertising network by reach.

The ads will be sold by both CPC and CPM, Angles said, depending upon the advertiser.

Snap is following in the footsteps of other ad networks that are blurring the lines between editorial and ad content. While banner ads stand off to the side, companies like Kontera and Vibrant Media are turning hyperlinks into targeted ad inventory. Mousing over a hyperlink on “technology” in a story on FoxNews.com, for example, triggers an ad for Intel.

Gross has a history of pioneering new Internet ad models. He founded Overture in 1998 as a search engine where advertisers paid for their links. Much ridiculed at the time, Overture’s system spurred the development of search advertising into the $8 billion industry it is today. Snap has dabbled in alternative ad models, such as cost-per-acquisition pricing.

The company also launched the Snap Shares sales incentive program wherein ad inventory will be shared with sites on which Snap ads appear.

“We’ve gone from zero to 15 million views in one year,” said Angles. “And with the advent of Snap Shares the rate is going to increase because we’re offering more to more people.”

Owned by Idealab with a major investment from Mayfield Fund, Snap is the brainchild of Gross and Tom McGovern, once an entrepreneur in residence at Idealab, and now Snap’s CEO.

Gross is the founder of Knowledge Adventure, among other enterprises. The educational software publishing company was sold to Cendant Software and is currently a division of Havas Interactive.