Checking emails in the morning, I was surprised when I read a newsletter coming from adBrite. It’s an announcement that they have decided to cease operations on February 1, 2013. It’s tragic, really…
Here’s what I received:
I’ve been with adBrite for years. I remembered that adBrite was actually the first ad network I join when I was a rookie in online business world. AdSense comes later on (you can see adBrite ads here on Noobpreneur.com snapshot back in March 2008.)
It was a great experience, really – adBrite team manages ad well and they are more responsive than AdSense team. Contacting them will get me a reply quickly – unlike AdSense (Alpha Doggs shares the same experience)
However, due to unsold spots (which look rather ugly with large space of “advertise here” here and there) I decided to take it off and replace adBrite ads with Google AdSense, which inventory is really huge.
But that is not the real reason to the shutdown, really.
The rift began in 2008, when adBrite was laying off 40 employees (40 percent of total employees) in an effort to stay afloat.
adBrite was founded in 2002 as an ad network, and transformed into an ad exchange in 2008. The company raised $40.4 million in venture capital funds, and has been visited by 160 million US unique visitors every month (source: CrunchBase.)
As reported by All Things D, adBrite fails to find buyers. adBrite CEO Hardeep Bindra mentioned in an interview that he has been trying to sell the company, but a couple of weeks ago the talks fell through.
I don’t really have much information why adBrite fails, but what I can see from time to time, when it comes to tech companies, profitability is not always a focus.
That’s why many tech startups are up and running at full force… with venture capital money. Some cynics say that tech startups are simply entrepreneurs who love to play around with investors’ money. Indeed, many of such startups are not self-supporting (operational funded and business growth sustained by revenues and retained profits.)
Online display ads’ demand is also subsiding. Moreover, with today’s rising mobile trends, mobile ads are the hottest goldmine today, making conventional ad network/exchange companies losing their market from time to time. And those are not mentioning competition: AdWords/AdSense, AdBean, Infolinks, Chitika, Federated Media… the competition is fierce, and they are innovating really well.
In adBrite case, competition has always be the biggest problem; even if they try to profit, the scale is always tipped to Google AdWords/AdSense’s side, due to their sheer size of advertisers and publishers. With a strong user base, Google’s main source of income will continue to dominate the online ad market.
Perhaps we should focus on profitability first, then innovation? What’s your take on adBrite’s failure? Please leave your thought in the comment section…