Kosmix is a very modern media company.
It sells advertising wrapped around online editorial and pictures, just like a newspaper or a blog. But unlike a conventional media outlet, it does not invest a cent in producing its own text, video or photography.
Instead, it automatically calls on thousands of free sources to build its pages. Articles from Wikipedia, photos from Flickr, products on Amazon and Google search results combine to create a “360 degree view of any topic”, says Anand Rajaraman, co-founder of Kosmix.
Searching Kosmix for “chocolate cake”, for instance, brings back recipes, videos from Martha Stewart, nutritional data and a calory burn rate calculator from WebMD.
Each page is assembled anew for each search, which keeps them up to date, but the results can be hit-and-miss depending on the topic. Mr Rajaraman pitches it as a better way to browse and explore facts and opinions around a given subject than the precision tool of search.
“Sometimes you don’t know exactly what [information] you are looking for,” he says.
He hopes Kosmix’s blend of algorithms, presentation and utility will attract the high advertising rates Mr Rajaraman has secured on RightHealth – a medical information site that works on similar principles to Kosmix.
“We are pioneering a new wave of advertising on our pages – performance oriented and highly targeted while being more visual and engaging,” he says, as well as ensuring “orders of magnitude more revenue than ordinary content”. That could include sponsored modules in its pages or advertising targeted to the content on the page. Kosmix has revenues in the “double digit millions” of dollars and expects to be profitable “sometime next year”, says Mr Rajaraman.
The model clearly appeals to Time Warner, which has led a $20m funding round that also includes existing investors Accel Partners, Lightspeed Venture Partners and Dag Ventures. Ed Zander is also making his first corporate appearance after stepping down as chief executive of Motorola, taking a stake and joining Kosmix’s advisory board alongside Jeff Bezos of Amazon.com and Bill Miller of Legg Mason, the asset management firm.
Kosmix has now raised a total of $55m, the latest of which will go towards development of its site, a sales team and partnerships with referring sites.
Its co-founders both worked at Amazon, after it acquired their previous venture, Junglee, a comparison shopping site. While at Amazon, Mr Rajaraman spotted a young search engine called Google, after sharing an office at Stanford with Sergey Brin. He convinced Mr Bezos that “a lot of ecommerce is going to go through Google” and was authorised to offer up to $250m. But Google wanted “at least a billion”, and no deal was done.
Kosmix bears more resemblance to Yahoo’s initial incarnation than Google. “Yahoo wanted to be a guide to the web back when they started and they did it manually,” says Mr Rajaraman. “They soon figured out that it doesn’t scale because the web can move faster than people can type. We are trying to do what Yahoo wanted to be – but for the real world.”
