Federated Media Buys TextDigger: Like Facebook’s Purchase of Chai Labs, This Acquisition Speaks to Sem Tech’s Value In Advertising Ventures

Federated Media’s ExecTweets pulls up sponsored resources next to leading business’ leaders postings.
It’s been a little over a week since Facebook acquired semantic tech vendor Chai Labs for a reported $10 million. Founded by former Google AdSense executive Gokul Rajaram, the buy of the structured content extraction system and search platform was seen by some as giving Facebook an edge in delivering Google-like ads around improved editorial content – including opportunities to help companies that maintain pages on the social network dynamically deliver materials suitable to SEO queries.
Well, there’s more news that touches on the semantic advertising acquisition front today – Federated Media, which helps online publishers sell ads, has acquired a portion of startup TextDigger’s technology. Founded by Tim Musgrove, who will now take on the role of chief scientist at Federated Media, the SaaS service pulls together themes across documents it searches, without those themes being pre-defined. It provides a way for publishers to get more value out of existing inventory, and ideally more pull with search engines, by dynamically pulling together content whose previous inter-relationships weren’t obvious into custom landing pages. Also, its semantic smarts can analyze content to determine what words to add to articles to boost search engine relevancy.
Customers include the San Jose Mercury News, which uses it to automate tagging stories and generating topic pages.
How might this acquisition help Federated Media? According to reports, the angle is that Federated Media will get more technology to support its own curation efforts and scale programs such as ExecTweets, which highlights messages from top execs posting to Twitter. Microsoft is the sponsor of that Federated Media service, which serves up resources from that vendor alongside top business leaders’ tweets in its IT topic areas.
At launch Federated Media said it had plans to make money with the ExecTweets service beyond Microsoft’s sponsorship – and perhaps this is one way it will realize that vision. For instance, right now when you click on any of the IT topic areas in ExecTweets IT (from mobility to storage to cloud computing), you get the same set of resources from Microsoft to peruse. But how much more potentially valuable as a custom publishing venture if you can offer your sponsors dynamic content generation of their resources based on the specific topic the user is investigating?
And the ExecTweets site has other topics (healthcare, retail, and so on) that seem ripe for adding vendor resources, either from Microsoft itself or perhaps even non-competitive outlets from outside the IT realm. We can’t say we know how such partnerships might work in a revenue-split model, but Twitter could stand to gain substantially, as Federated Media said, at the ExecTweets launch, that it planned to share some of the deal’s revenue with the platform vendor.
Smart Tech Makes Good
Terms of the Federated Media deal for TextDigger weren’t disclosed — and in fact apparently part of the company will continue operating as its own entity focusing on semantic profiling and SaaS services. But VentureBeat reports that TextDigger has raised a total of $5.8 million from True Ventures, Intel Capital, CBS Interactive, and individual angel investors.
When The Semantic Web blog spoke with Don Butler at Thomvest Ventures this spring, he pointed to TextDigger as a case in point of a sem web startup that got things right: It started with a small infusion of capital, made good progress, and then, with the proof in its pocket, secured follow-up funding. “CEO Tim Musgrove’s a sharp guy – they got their initial capitalization, proved value and then went for more traditional funding in a bigger round,” Butler said at the time.

TextDigger’s semantic topic page creator.
We choose to look at this latest acquisition as not just good for the semantic web space – but good for the financial arena, as well. This morning reports had U.S. stock futures rising as merger and acquisition talks perked up some positive sentiment – at least in the short term. HP’s $1.6 billion counterbid for 3PAR, which Dell offered for last week, led the news, but heck, every little bit of momentum helps, doesn’t it?
• Don’t forget to propose your startup for our Semantic Web Impact Awards. The deadline is Sept. 15.

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