The Dream: How I Learned the Risks and Rewards of Entrepreneurship and Made Millions (18 page)

A couple of months later, back in San Jose, we launched the new behavioral technology. We hadn’t invented it, and we weren’t the only people who had it, but I knew we were going to make it work better than anyone else. And I was right. As
soon as we were up and running, this key element changed everything. BlueLithium went from an intermediary working with performance-based advertising—the consumer clicks, you pay—to a company that was able to use people’s history to target them more effectively. Hence our pitch:
Data is the difference.

And let me repeat: This was not Big Brother territory. We only had data related to an individual’s viewing history in the form of “cookies.” If you clicked on Porsches, for example, we could, conceivably, put that Porsche ad in front of your eyes regardless of where you were on the Internet. And while some people might see this as a negative—ads following you around the Internet!—I had another take entirely: I felt, and still feel, that the technology had the potential to make the Web a more pleasant and personal experience. We were focusing only on the ads you might respond to, determined to remove all that random clutter from your screen. Look at it this way: If you don’t need a mortgage, and you haven’t been looking for a loan, why should you be subjected to that tiny dancing fool that keeps promising you better-than-ever rates?

At the end of the day, and in the parlance of the industry, BlueLithium was at the forefront of
audience targeting based on consumer interest.
In basic English, we were looking for ways to sell you stuff we knew you kinda, sorta wanted. Or, if you didn’t want it, it was definitely of interest.

That was key. That’s what made us more sophisticated than the next guy. Click Agents was basically a recording system. It tracked clicks. But BlueLithium was into custom segmentation, a
benign
form of profiling based on a person’s Internet habits. Everything about the technology was more sophisticated, more robust, way cooler, and way more
accurate.
And it worked like a dream: People were responding to the targeted ads at ever-greater numbers. And the advertisers were thrilled, of course. In essence, advertising is about getting the right message to the right person in the right way at the right moment, and that’s exactly what BlueLithium was doing.

A few months later, we were named Top Innovator of the Year by
AlwaysOn,
a technology publication. And that same year a leading business magazine placed us among the top 100 private companies in America.

In late February 2007, there was a lot of consolidation in the marketplace, and we began to see a slate of industry mergers. DoubleClick was bought by Google for $3.1 billion. aQuantive got bought out by Microsoft for $6 billion. 24/7 Real Media was bought by the WPP Group for $650 million.

It felt a little like a game of musical chairs, with one less chair on the floor every time the song ended. And the songs were playing fast. I went to my board and told them that we needed to hire a banker and start a market check. This is a fancy way of saying that I wanted to explore the possibility of
selling BlueLithium. They didn’t agree. They thought we should focus on the company’s strategic plans.

In 2006, BlueLithium was named Innovator of the Year by AlwaysOn.

“Guys, look at what’s going on!” I said. “At the very least, we need to test the waters.”

In all honesty, I wasn’t sure whether I should be thinking about selling the company. We were more than viable—we were hugely profitable, in fact—but it made good sense to test the rapidly consolidating marketplace. If and when the music ended, I wanted to make sure there’d be a chair at the table for BlueLithium.

In April 2007, a month after we had become the second largest ad network in the United Kingdom, we opened an office in Paris. At that point, we had close to 150 employees worldwide, and we were looking more attractive every day. The board knew this, and they finally decided that I was right to at least
think
about selling. We still weren’t for sale, but if someone made inquiries about buying the company, we had
to be ready for them, so we prepared for a SOX compliance. (“SOX” is short for the Sarbanes-Oxley Act, which was passed in 2002 following several major accounting scandals in the corporate world—Enron, Tyco International, Peregrine Systems, Adelphia—and it is designed to oversee a public company’s accounting and auditing practices.) This would help ensure that we had all the necessary controls in place to become a public company, and it would pave the way for a possible IPO—if it actually came to that.

At that point, with things moving pretty quickly, the board thought it would be a good idea to hire a vice president of corporate development. In a larger company, that person’s job is to evaluate other companies, to determine whether they’re worth buying, but in a smaller company—one like BlueLithium—he or she is there to help map out a strategy for going public. The roles are slightly different, based on the size of the company, but the title is universal.

I hired a corporate recruiter to help me with the search, and he put together a list of possible candidates. Some of them worked for small, local companies, and others were employed by some of the biggest players in the Internet business. I reviewed the list, we narrowed it down to ten candidates, and I sent the recruiter off to do his job. Very early in the process he called with some interesting news: One of the potential candidates had heard very good things about BlueLithium, and—while
he wasn’t interested in leaving his current job—he wondered if he might meet with the CEO to discuss other possibilities. I had a feeling this guy was going to broach the idea of buying BlueLithium, and I wasn’t wrong. As soon as we sat down together, he asked if we were for sale, and I told him the truth: “No. But if you’re genuinely interested, send me an email to that effect, and I’ll take it to my board.”

The e-mail arrived the next day, and I immediately took it to the board. “Hey,” I said. “We’re getting interest. Obviously this is the right time to start a process.”

Within a week, we hired an investment bank to help us with the market check, and things got very crazy very fast. The bank contacted other potential buyers, and a number of parties expressed serious interest. Finally, on September 4, 2007, after weighing our options, we decided that Yahoo! was the best fit, both from a financial point of view and from the perspective of the company’s almost 200 employees. Yahoo! agreed to buy BlueLithium for $300 million in cash.

As soon as I got the news, I sat down and wrote an e-mail to everyone on our staff:

It was the first time I had publicly acknowledged my youth, and it was incredibly liberating. I had always worried that people would question my abilities because I was so young, and, indeed, this had happened from time to time (“You know, G, BlueLithium is growing faster than you are”), but now I didn’t have to hide anymore. I could be who I was.

My youth didn’t seem to bother Yahoo! As part of the deal, they wanted me to remain with the company for three years, and I agreed only because I figured I’d be able to renegotiate the terms before we actually hammered out the contract. By this point, it became apparent—to me, anyway—that I didn’t do my best work within a corporate environment. My strength was as an entrepreneur, and as soon as this deal closed, I intended to get back to doing what I did best.

The BlueLithium team at the offices of Yahoo! on merger day, 2007.

When Yahoo! sent over the term sheet, I took a close look, and everything was in there. We had agreed on a price. We had discussed the retention pool (how many of the employees would keep their jobs). We had reviewed the closing conditions. And of course I was expected to continue running the company for the next three years.

I was flattered—Yahoo! felt I was instrumental to the operation—but I was hoping no one would hold me to it. When it came time for the integration talks, an eight-week process, I was actually able to convince them that their own executive sponsor could do an equally good job. I agreed to stay on for four months, however, to help with the transition, and I also agreed to a three-year noncompete agreement. The lesson here is simple: Know what you’re good at, and keep doing it. In order to succeed, you have to love what you do, so make sure you wake up every morning looking forward to the day ahead.

The deal closed on October 15, 2007, and everyone was very happy. This was not simply a good deal for me but a good deal for every single person at BlueLithium, including the members of my board.