A new company called LikeMinds will jump in the market Tuesday for collaborative filtering tools that create Web sites which make personal recommendations and offer direct marketing based on visitors' past behavior.
LikeMinds is a spinoff of book and software publisher O'Reilly & Associates and Songline Studios. America Online also is a shareholder. LikeMinds, which holds the patent for its technology, was formed in a merger of Chaco Communications, a virtual reality company, with a portion of Songline.
Its first product is Preference Server, which delivers personalized recommendations based on either preferences explicitly stated by the user or implicitly determined by sales records, click-throughs, or other user interactions with Web sites. LikeMinds expects to roll out other products in its line later this year, including a chat server and data analysis tools.
By year's end, it expects to deliver products that will allow sites using its software to share data, link to advertising servers for better ad targeting based on a user's interests, and scale commerce servers for selling products.
"Until the experience of buying something on the Web is as good as or better than buying from a catalog or walking into a store, why would anyone want to buy something on the Web?" asked Steve Kanzler, LikeMinds' senior vice president of sales and marketing.
"[What] we're trying to solve is the problem of giving people valued, trustworthy information that they can use to make buying decisions," he added. "If we solve that problem, we expect commerce will take off on the Web."
Like Firefly, LiveMinds created a demonstration site to illustrate what its collaborative tools do. LikeMinds says its site Movie Critic makes "more accurate" recommendations than Firefly, which recommends movies as well as music.
"If you're going to make recommendations, they'd better be good recommendations," Kanzler said. "If you make good recommendations, you build trust between the customer and the merchant."
Collaborative filtering works by asking users to state their preferences about multiple topics. The software compares one user's preferences to others, finds people of similar tastes, then makes recommendations based on what similar users like. The software also can factor in preferences based on what a visitor buys or looks at on a site.
LikeMinds tools also generate consumer data, which it calls "cybergraphics," that Web sites can use for direct marketing. Cybergraphics allows greater accuracy for targeting interested customers because it takes into account not just demographic data or psychographic data (based on what people say they like), but also their activity of site visitors.
LikeMinds is positioning itself against Firefly, which has the first collaborative filtering technology to hit the market. Firefly issues a "Firefly passport" that registrants can use on any site that licenses its tools. The data from all those sites is compiled in Firefly's database and used to make recommendations.
In contrast, LikeMinds does not require its licensees to share their data, and it does not promote its own brand. Rather than offering a collaborative filtering service, LikeMinds will deliver applications Web sites can use themselves. NetPerceptions also offers tools to create collaborative sites; Internet bookstore Amazon.com already uses NetPerceptions' technology.
LikeMinds is a spinoff of book/software publisher O'Reilly & Associates and Songline Studios. America Online also is a shareholder. LikeMinds technology was patented by Chaco Communications, a virtual reality company that has merged with a portion of Songline to form LikeMinds.
Pricing for Preference Server, based on the number of registered users, begins at $25,000, and it is available on major Unix platforms and Windows NT.