Perfect Market, Inc. (www.perfectmarket.com), a marketing services firm for publishers, announced that it has acquired MediaRiver’s patent-pending technology for matching content and advertising to any webpage on-the-fly. The entire MediaRiver team has joined Perfect Market, and Budzik will assume the role of CTO at Perfect Market. Financial details of the transaction were not disclosed.

The MediaRiver technology reads the contents of a webpage and responds with highly relevant content and advertising to match the page. MediaRiver’s targeting solution, ClickSurge, helps publishers and advertisers reach engaged users by efficiently tapping search, display, and widget networks. ClickSurge enables web publishers to guide internet users to the publishers’ online content in a discovery-based contextual model—allowing content of any type, including video, music, pictures, or text, to be linked onto any webpage dynamically based on the unique properties of that page.

Perfect Market is a recent startup from the Idealab network (www.idealab.com), which just announced in July that it had raised $15.6 million in new venture funding. The company says it specializes in "lighting up" underutilized content for publishers and creating additional revenue from these assets using a revenue sharing model. The company applies proprietary processes to this problem, including "cutting edge economics, natural language, and machine learning algorithms." By bringing to light valuable content that might not otherwise be found, Perfect Market says it improves the search experience for end users, provides targeted impressions to advertisers, and brings new revenue to the publisher’s bottom line. Perfect Market isn’t ready to announce any customers yet—it will within the next 2 months, says CEO Julie Schoenfeld.

"Dr. Budzik, a highly-regarded scientist for his work in bringing cohesiveness to unstructured content, and his team at MediaRiver have been at the forefront of developing some of the most advanced algorithms and technologies for targeting content and ads to web pages," says Schoenfeld. "Given the strong synergies between our two companies, we’re thrilled to be working together to offer publishers more ways to monetize their content."

"Perfect Market helps users find valuable content that they may have previously missed. By combining MediaRiver’s targeting and optimization capabilities with Perfect Market’s existing technologies and business, we are creating an even more efficient end-to-end service," says Budzik. "MediaRiver is pleased to be joining forces with such an outstanding team."

Perfect Market has been rather quiet about the details of the technology and services it provides to publishers. Here’s a description from the site: "Perfect Market’s end-to-end service delivers and monitors results immediately, yet requires very little from the publisher to get started. Any publisher with a large content library is a potential partner. Most importantly, the service is a no-risk proposition for publishers. The program is structured to enable publishers to utilize the service with no upfront capital outlays or investment of scarce IT resources. Additionally, Perfect Market’s service fully complements existing Search Engine Optimization (SEO) and Search Engine Marketing (SEM) programs."

I asked Budzik for more details; here’s what he helpfully provided:
"We use a combination of text mining/statistical and linguistic approaches, semantic analysis, behavioral data, and market intelligence to optimize traffic and revenue. Our software taps into search, display, and widget networks to show users content of interest by matching content to available inventory and displaying an ‘ad’ for relevant content. We do this by understanding exactly what an article is about using the above techniques. From that understanding we can build search ads or dynamic display ads that read the page and respond with related content in real time. When a user clicks on one of our highly relevant ‘content ads,’ we send them to a page we manage so they can get the content they’re looking for. We then monetize the traffic we get by placing highly relevant ads on those pages. The end result is that users get content they may not have otherwise found, publishers get a new source of revenue that’s [complementary] to all of their existing initiatives, and advertisers reach a highly engaged audience. It’s an end-to-end service for turning content into revenue."

Larry Orr, managing director at Trinity Ventures, one of the funds backing Perfect Market says, "The company’s proprietary technology positions it to present publishers with a method to utilize their millions of archived pages, while in turn delivering valuable content to end users and more targeted impressions to advertisers. Perfect Market offers a very compelling answer to the age of rapidly growing content and declining ad revenue rates."

Perfect Market, a network company of Idealab, builds on Idealab’s achievements in the search industry, such as its creation of the paid search model through Overture Services, which was acquired by Yahoo! in 2003. Perfect Market, Inc. is based in Pasadena, Calif. Following its acquisition of MediaRiver, the combined company has 30 employees.

If the technology synergies are as strong as Budzik and Schoenfeld say, this looks like a win-win deal for both companies. And publishers looking to make more money from their vast content archives may well find this "no-risk proposition" to be an attractive answer in an age of growing content options and declining ad revenues.