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MashLogic: Links Done Your Way

By Jack M. Germain
Jan 27, 2010 5:00 AM PT

In the world of venture capital fund-raising, the would-be entrepreneur is usually the party who goes looking for acceptance. However, that's not the way MashLogic got funded.

MashLogic: Links Done Your Way

Instead, several partners at Bessemer Venture Partners sought out Ranjit Padmanabhan with seed money and the cofounder title to start up MashLogic in late 2007. It was a match made in VC heaven. Today, Padmanabhan serves as the CTO as well as the acting CEO.

Together with the two Bessemer firm partners who recruited him and an engineer previously hired, Padmanabhan is one of the company's four cofounders. However, he has nearly full control over growing the company. The VC partners have no stake in the company outside of their own VC firm, he said.

"I happened to come along at this time. I had the right qualifications. The idea came from within the VC firm," Ranjit Padmanabhan, who wears several hats in growing MashLogic, told the E-Commerce Times.

Business Trial and Error

Bessemer Venture had an idea of what it wanted to do. Their goal was to give Web surfers an alternative to a growing dependence on search engines.

"When we start companies internally, we often think of them as experiments. So far, this experiment has been very successful," David Cowan, a partner at Bessemer Venture Partners, told the E-Commerce Times.

No Guessing

It could be said that in a sense, all startup companies are experimental. MashLogic, however, has more than guess work on its side.

The results of that business experiment have been very encouraging. Users are responding well to the MashLogic software client, Cowan noted.

"We're a young company and haven't put as much polish on the product as we'd like. We know lots of things we're going to do to make it better," he explained.

A Whim

MashLogic developed a browser tool that gives users -- both Web site publishers and visitors -- contextual information about content on Web sites. The plug-in is meant to enhance the performance of the Web browser.

The hyperlinks enrich the user experience by making it more personal, according to Padmanabhan. The technology understands user preferences with the content of the page and adds new content based on that.

A couple of the VC partners were already thinking about the concept and had a few ideas about adding more content to Web pages. They had the idea that oftentimes publishers were diluting content with their own links.

The VC partners had already tapped an engineer who had a couple of ideas about making content links. Padmanabhan was also thinking about building something similar.

He was in the right place at the right time. The VC partners asked him to come on board as a cofounder.

The Mash Mania

The MashLogic software detects words that are relevant to a subject such as music or sports and instantly adds links to related information. When users visit a Web page, the software scans the content and matches those words with content from the back-end system, Padmanabhan explained.

For instance, when a user reads a page that has baseball players' names on it, MashLogic adds links. As the user mouses over the link, a pop-up appears that provides player stats and other information about the player.

The software plug-in is a smart semantics application. Normally when you read a Web page, you jump to a search engine to find details about information not already linked, such as specialized terms and words that are keyed to advertisers' products.

"So we can eliminate the use of search engines by giving you more of our own links," said Padmanabhan.

The Browser's the Thing

The plug-in works on Mozilla's Firefox and Microsoft's Internet Explorer (IE) Web browsers. MashLogic recently released a version for Google's Chrome browser. So far, however, that product is not fully functional.

In a couple of months, the company will have a version for the Mac. By the summer, it aims to support mobile devices like the iPhone, Padmanabhan said.

"It works on cross-platform browsers. So Windows and Linux browser versions are supported. It cares only about the browser, not the platform running the browser," he added.

Early Hardships

Padmanabhan had to overcome numerous technical problems. He began those efforts toward the end of 2007, and it took a little over one year to solve them.

In order for the concept of adding useful hyperlinks to work, the MashLogic engine had to, for example, reliably pick out the names of bands and people on Web sites that have music content. Building an engine with that kind of knowledge was a pretty serious technical challenge, Padmanabhan said.

"We don't crawl the Web in advance to find content on existing Web pages. Our engine had to be able to identify keywords on the fly. When you crawl a page, you have time to parse it. The first time you go to a page is the first time we've ever seen it as well," he said.

Equally Tough

Getting the engine to work was another arduous task, but the second major issue was no less challenging.

Besides just working, the engine had to deliver high performance and speed without messing with the user's experience.

"This was a very tricky problem to solve -- the ability to scan a page in real time, understand the user's preferences on that page, apply them to the page and add links," detailed Padmanabhan.

MashLogic launched the beta version in October 2008. The company started production late in the summer of 2009 with the first external round of investment money.

Money Trail

Research and development used up all the seed money by 2009. The company raised US$2.5 million from New Enterprise Associates and Bessemer plus a few angel investors in the early part of that year.

Fund contributors included Founder Scott Kurnit, LinkedIn Founder Reid Hoffman and Wikia CEO Gil Penchina.

Actually turning a profit is a long way down the line, acknowledged David Cowan, partner at Bessemer Venture Partners.

"We had revenue from day one. But we're not even looking at turning a profit yet," Cowan told the E-Commerce Times.

Stretching the Dough

Meanwhile, MashLogic makes money through links to key advertisers related to content of the Web sites, according to Padmanabhan, and the company gets affiliate transactions as commissions. That's the primary revenue model.

MashLogic will remain in a growth stage financially at least for this year. After that, the company will look at tuning its revenue stream.

The money on-hand from investors will probably carry the company for 20 to 24 months, added Padmanabhan.

New Challenges

While the money lasts, the immediate goal is to continue with distribution of the product. In addition, Padmanabhan wants to ensure high performance and gain a few hundred publishers and 100,000 users by the end of this year.

Perhaps an even bigger challenge is getting users to trust the links the tool provides and change their viewing behaviors. A longer-term goal is to reduce the need for search engines by adding more links.

"We expect to make a small dent in these goals by the end of this year. After that, 2011 is our year of reckoning," Padmanabhan predicted.

Competitive Edge

MashLogic is up against two types of competitors, according to Cowan. The first can be classified as companies that go to publishers and put pop-ups all over their sites. These are companies such as Snap and Zemanta.

"Those companies are about trying to put more impressions of advertisers in front of the user," said Cowan.

The second can be classified as companies that have client side mashes -- companies like Hyperwords.

"Each one of these things caused us at Bessemer not to be satisfied with that as a solution," he said about what lead to the founding of MashLogic.

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