Google invests in e-commerce start-up Pixazza
Pixazza hopes to make money by enlisting people to tag photos with links that let Web surfers buy the products shown. Publishers get a cut, too.
Google is joining a $5.75 million investment round in Pixazza, a start-up that hopes to profit by overlaying photos on the Web with links that let people buy the products in the images.
The Mountain View, Calif.-based company is now launching the technology for general use by advertisers, Web publishers, and the network of self-appointed but screened specialists who identify the products in the photos, said Chief Executive Bob Lisbonne. The company is starting with the apparel industry but plans to expand to home design and furnishings, travel, electronics, and sports starting later this year, he said.
Lisbonne likens Pixazza's technology to a photo-based version of Google's AdSense, which analyzes text on publishers' Web sites and displays what it deems to be relevant ads. AdSense is used widely by publishers to generate income from their Web sites without having to hire an advertising sales force.
Given the similarity to AdSense, perhaps it's not a surprise the search giant responded when Pixazza sought funding. Google employees have been spotted with Google Ventures name tags, but it's not clear whether the Pixazza funding is part of that project. Google is cagey about Google Ventures: "This is a project we're working on, but we're not ready to share any details right now," spokesman Andrew Pederson said.
Other investors in the round include August Capital and CMEA Capital, the company said. Individuals who've funded the company include angel investor Ron Conway, former eBay Chief Operating Officer Maynard Webb, and Facebook Chief Financial Officer Gideon Yu, the company said.
The company will use the funds for research and development and for sales and marketing, Lisbonne said.
Lisbonne and Chief Technology Officer James Everingham have deep Internet roots. Both worked at browser pioneer Netscape Communications, and Everingham recruited more from that background for the company's technology team. Everingham also was CTO of LiveOps, a company that offered call center technology with a network of more than 20,000 independent remote operators handling the phone calls.
Crowdsourcing for profit
Pixazza employs fewer than 20 people right now, but as with LiveOps, its business is designed to expand with the cooperation of many people who aren't actually employees. Pixazza is using a vogue concept called crowdsourcing in which a company benefits from often small amounts of labor contributed by the enormous quantity of people who can be enlisted over the Internet.
In Pixazza's case, people can sign up to tag photos that show on the Web sites of publishers using the Pixazza technology. Initially they can't add tags or take other actions without approval, but those who prove themselves adept gradually gain more privileges.
Why bother trying to figure out which purse, sunglasses, or patent leather high-heel sandals some celebrity is adorned with? Money is one incentive.
When a person views a photo, clicks a tag, goes to an advertising merchant's site that sells a product, and buys it, that advertiser pays a share of the revenue to the person who tagged the photo, to Pixazza, and to the Web publisher.
Thus the appeal to Web publishers, Lisbonne argues.
Pixazza has been beta testing the technology since this fall. Publishers who've been testing the technology include LaineyGossip.com and I'm Not Obsessed. Participating advertisers include Zappos, Bluefly, Eluxury.com, Shopbot.com, Overstock.com, and Macy's. So far the company has an inventory of more than 2 million items.
The company will expand beyond apparel starting later this year, Lisbonne said. Apparel and fashion is "a category in which there's a large number of e-commerce merchants in place and where there are hundreds of relevant Web site publishers we can approach," he said. "It's a straightforward place to get started."
Pay for play?
As Google has shown through AdSense and AdWords, which shows ads next to search results, there's money to be made in determining exactly whose ads get shown next to products.
Pixazza has its own strategy to let advertisers spend money to make money. They can offer more money or other incentives to the crowds tagging the photos, Everingham said.
"If I'm a crowdsourcer and see 10 different versions of the same product, and I see one (advertiser) pays a higher commission for me to choose, not only the publisher, but the crowdsourcer will make more money," Everingham said. "We want to keep everybody in alignment."