$500 Million Ad Network?

There's talk of Slide having a half billion valuation. That's based on a new funding round which is itself based on Slide actually being an ad network. It looks like all widget companies are trying to turn themselves at one level or another into ad networks - pace Clearspring and Netvibes and others. And while I wish them all the best of luck with this, it will be a bit sad if the promise of widgetization just turns out to be another way to build an ad network.

Slide: The $500 Million Widget

Slide: The $500 Million Widget
After cashing in big with PayPal, Max Levchin could be at it again with his social network tool. The latest funding values Slide at a half-billion.

Valley Girl has learned that Slide has raised $50 million in a round of funding that values the company at more than $500 million.

Widgets raise doubts in large measure because they're not bound to any one site. While sites like YouTube (GOOG) and Facebook are struggling to wring revenue from the millions of people who come to their sites, they at least can run standard banner and display advertising to buy them some time; they control their own sites. Widgets are grabbing real estate off of everyone else's pages. That's an inherently riskier proposition with far fewer ways to make money. Levchin understands that risk, having built PayPal on top of eBay. But this time, he has several eBays (BusinessWeek.com, 8/23/07)—in the form of MySpace (NWS), Facebook, Bebo, and even more niche personal blogs and sites.

For the strategy to work, Slide needs to build a jaw-droppingly huge audience—so huge that advertisers will see Slide as a way of advertising across the hottest Web sites in one move, versus advertising on each of those places. In that scenario, Slide almost becomes like a huge ad network, only one that's delivering advertising in a far more compelling way. It's not in a banner ad that people routinely tune out. It's ideally worked into a very personalized slide show of your memories.

As much as Levchin works tirelessly to achieve his goal—believe me, he tweaks and alters his business focus constantly—Slide faces quite a different challenge from that of many Web 2.0 sites such as Digg and TechCrunch, which focus on catalyzing loyal niches. In its own way, Slide is trying to build the next Yahoo! (YHOO). This is not a safe bet. It's a big, gutsy, swing-for-the-fences play, and those typically take a lot of money. Counting this round, Slide has raised at least $75 million.