Media Whiz Aquires AuctionAds

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This story was first announced on techcrunch

auctionadsIn March of 2006 I was talking to Dave (aka Dillsmack) and off-hand I mentioned that I thought it would be cool if we built an advertising platform that allowed users to write their own ads with their own affiliate code. Within a couple days, Dave showed me ShoeMoneyAds. We opened this platform up, and invited as many people as we could while keeping reins on the hardware. Several hundred people used SMA in this incarnation for many months, with very few changes along the way. During that summer we were in San Jose for SES and some people mentioned that we should add an eBay component to SMA. A few days later Dave had fully integrated the eBay API into the SMA platform and we were serving eBay item ads with each user’s own eBay affiliate link. The system worked, but with no caching in place was not very scalable. That fall, at Vegas Pubcon (notice how much gets accomplished at these conferences) one of the great eBay affiliate program employees suggested that we build a sub-affiliate network using the ShoeMoneyAds/eBay technology. We thought that sounded cool but we were still killing it in the ringtone industry and put it on the back burner.

Fast forward to February of this year our revenue from ringtones was down about 300% and it was pretty obvious we needed to find something new to go after. We had plenty of capital built up from our own affiliate marketing so we could try a few things. I really liked the idea of starting my own advertising network using the eBay API. There were some key ingredients missing though that I needed to hash out before approaching Dave to build it:

1) Customer Service – We had never done any customer service. We are developers/marketers not customer service people. In fact we suck at customer service. If we were going to have our own advertising network we needed to figure out how to do customer service.

2) Payments – There is no margin for error when you’re playing with other people’s money. You need an accurate system, and the people in place to manage the payments.

So I talked to a good friend of mine, Patrick Gavin, who has years of experience handling both customer service and mass payouts from Text Link Ads and I pitched him the idea of AuctionAds. He was game to try it so he ran it up the flagpole over at Media Whiz and we went forward.

I then told Dave that I wanted to move forward on AuctionAds and explained the situation with Media Whiz how they were going to be a minority stake holder in AuctionAds and provide customer support and the mass payment knowledge. At this time I felt it was necessary to bring Dave in as an equal partner in AuctionAds. We structured it so that we both owned 50% each of the company that owned the majority of AuctionAds. This means whatever I made he made also. Dave has been loyal and with me for a long time and I knew it was going to be a ton of work for him on this and I wanted him to reap the same rewards as I would get.

Here we are, roughly one year later. AuctionAds has had arguably the biggest launch of any advertising network, ever. Over 25,000 publishers displaying 300+ million AuctionAds ads per day and all in only 4 months after launch. All the success was not without some growing pains though. We basically came to the realization that we had to make a choice: AucitonAds/ShoeMoney Media Group INC could bring in a staff of people, train them and all that (which we had ZERO experience in doing) OR we could sell the company to someone who already has tons of experience in that area and can take AuctionAds to the next level.

With that I am very proud to announce that today we signed a deal we have been working on for the past 15 days or so. Media Whiz is now the sole owner of AuctionAds. This adds another great advertising product to Media Whiz’s arsenal.

So what is in store for Dave and me now? Well, we have several things cooking ;) Never fear.

152 thoughts on “Media Whiz Aquires AuctionAds

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  4. Mike Mothenr

    That is a true success story. I have followed the progress of AuctionAds and it was one of those “of course” types of ideas, but at least somebody came up with it and executed it well. Congrats!

  5. Mubin

    It doesn’t matter how much it was sold for, Im sure mediawhiz got an AWESOME deal, everywhere I go I see ads for with auctions ads. EVERYWHERE I go, even on wblogtools.

    Shoe congrats man, im sure it must have looked hectic when you realized just how awesome this thing was. It would have been awesome to see you run this for some more time and see it grow under you. But whatever, I seriously hope you got a coupla million for this, and congrats to Dave as well, Im sure this is a message for all employess if your loyal to your employer they will be cool with you.

    Another puff of fresh air in the web 2.0 bubble…

  6. Grivon

    Congratulations shoe, your impressions are something adbrite mite even have to worry about!! “So what is in store for Dave and me now?”

    Buy the shoemoney jet????? :p congrats again!

  7. RightStarter

    Congrats Shoe!

    What does this mean for AA publishers? Part of the reason I love AA is because you were running it – does Media Whiz plan to stick to your business model?

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  10. John

    Awww man, I guess this means DDN won’t be doing the customer service on the forums anymore…I loved reading his replies when you guys first launched. Smack talk/customer service, it was great.

    Congrats.

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  12. Butler

    Congrats on the sale and even better job of sharing the wealth. Lesson to any start up guy, do whatever it takes to develop it fast, sell and start all over again.

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  16. Jonathan

    Definitely cool that I got to meet both of you, David and Jeremy, in the TLA office weeks back.

    Glad to have you all on board with Mediawhiz now :)

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  18. Paul.

    This had to be a couple million plus deal. The earing potential of AuctionAds is huge.

    Kind of sad about the sale, but whatever you gotta do.

  19. Rob

    “I then told Dave that I wanted to move forward on AuctionAds and explained the situation with Media Whiz how they were going to be a minority stake holder in AuctionAds and provide customer support and the mass payment knowledge.”

    So given that AuctionAds had no customer support, does this mean it’s safe to say text-link-ads has none either and I shouldn’t try them?

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  21. Funny t-shirts

    Congrats on the success, guys. It’s kind of a shame to have to let it go just as it was gaining major growth but I’m sure your bank account isn’t complaining ;)

  22. Icheb

    “our revenue from ringtones was down about 300%”

    You DO realize that if the revenue were down 300% you would be paying someone 2 times the amount of revenue that you were earning before?

  23. myspace-comments

    Wow, congrats! It is amazing how fast auctionads grew but also easy to see why. Such a simple idea executed so well and you have the start of an awesome service/company. Although it seems sad that you won’t be running it anymore it’s also exciting knowing that you may have more time now for some other really cool service or product that you can amaze us all with heheh. Keep it up shoe and bring it on!

  24. SomeGuy

    Your ringtone business went down 300%? Did you mean 30%? Nothing can go down more than 100% :)

  25. Ali

    Congratulations man, I have yet to sign up with AA though. Will do as soon as I get myself structured up.

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  33. Travel Notebook

    Holy cow Shoe! Congrats, that is HUGE news. I hope you got a really good deal because AuctionAds is worth tons of cash. Can you give us a ballpark number? Must be several million dollars…

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  39. Quais

    Congrats to both of you!! Great work!! I hope that the acquisition is also a good thing for the users of AuctionAds. And yes an indication of a price range for the deal would be nice.

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  42. Don@AffiliateWatcher

    I can’t say that I’m surprised. It seemed lately that AuctionAds was consuming ya’ll. I figured something major was going to break (either you or the equipment ;) ) or that you’d sell it. Glad to see you found a company to pony up the $$$.

    Don

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  48. Pogung177

    Shoe was created brilian business masterpiece. By developed a AuctionAds, you are not just a popular among millions of affiliate marketer. I guest in the next day you’ll create new inovation which people never create.

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  51. teddy

    Hey man congratulations on selling that company. I hope you got some big kiznash out of those beatches!

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  59. CatherineL

    Well done. It is unusual to see a business built and sold in such a short time, and I bet you put in a lot of hard work. It was a smart move to get MediaWhiz involved in the early stages.

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  65. stupid 3gp

    Congrats .. I hope it is better for auction ads and you did the right decision at the right time. With such a growth you need some company who can take good care of your auction ads.

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  67. Coin Counter

    What impresses me most is the speed of concept -> launch -> success -> sale. Amazing result, definitely the fruit of a lot of work. Congrats and good luck with the next project

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  71. Life is Colourful

    And can someone tell me, why AuctionAds stopped working and never paid out for the remaining money in the accounts? I am still supposed to be paid for the last payment since the month they screwed everything up.

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  79. Matt

    Whatever happened to AuctionAds anyway?

    Did it just go down ever since Ebay decided no sub affiliate networks? Sucks for Media Whiz… I’m surprised they haven’t switched over to a different auction affiliate program like Swoopo though.

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