Scott Rafer, CEO of Lookery on Facebook Aps, Europreneurs and Sleeper Networks
Susan Bratton

Episode 27 - Scott Rafer, CEO of Lookery on Facebook Aps, Europreneurs and Sleeper Networks

Scott Rafer has a rich history of being the CEO of cutting edge companies. From WiFinder to Fresher to Feedster to MyBlogLog to Mashery to his latest endeavor, Lookery, Scott has been involved with "what's hot now."  Lookery-for-the-Web super-targets ads based on three pieces of self-reported data from social networks, dating and ecommerce sites and ISP's: age, sex and location to create a new way to revalue commoditized inventory. Scott believes in "un-sexy business" as being the most valuable and thinks he can trump the BT and other ad networks who rely on imputed data for ad targeting. David Cancel, Scott's co-founder at Lookery is a big burley dude yet he and Scott have a hot pink logo and their company names' rhyme. Find out how Scott manages his his masculinity around this.  On the flip side, as a "fairly good economist" - Scott is most adept at packaging technology in ways it can be monetized.

Scott gives advice to website owners about a way to instantly create social networking capabilities to keep up with the SN world. Then learn more about what's happening in the start-up world in Berlin, Amsterdam and Helsinki and Scott's viewpoint on the difference between Silicon Valley and Europreneurs. Find out which ad networks Scott thinks are the "sleepers" including Pheedo, Azoogle and Oridian in Israel.  Finally, hear Scott's belief that the Silicon Valley runs in 8-11 year cycles and his hear his prediction that the market cycle will end by March 2008. What can you do to prepare? Listen and find out.



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Susan Bratton: Welcome to “Dishy Mix”. I'm your host, Susan Bratton. Hey, thank you so much for tuning in to the show today. I have found someone who is as timely and germane as could possibly be in the unisphere of advertising. You're going to get to meet Scott Rafer today.

Scott is currently the CEO and co-founder of a new company called Lookery. He also has a past checkered with start ups and new ideas that are always pretty much the hottest things that’s happening. So he's a lot of fun to talk to. I ran into Scott in the hallways of the Web 2.0 Conference and thought, “That’s exactly the kind of guy we need to get on the show to talk to us about the latest, most popular thing which is Facebook.”

So, on today’s show, we're going to talk about all kinds of fun things from Facebook applications and ad targeting to being a disruptor to Europreneurs, Scott’s opinion of Silicon Valley business cycles, what unsexy businesses are and why he loves them, and maybe some sleeper networks.


Scott Rafer: I've sort of see the money in things. There are a lot of start ups where they generate traffic or users or something, and it's all going really well from the point of view of the Web servers are getting hammered. But no one quite knows how to make it a business, give it economic value, and I tend to be a fairly good economist. There's now a quarter million other little sites out there where their face will also show up. What it does is it's gangs up all the little sites and collectively gives them the social power of one of the big social networks.

I said Lookery as a joke and Dave laughed, says, “Oh, you're screwed!” He said it somewhat less politely, but says, “You're screwed” and hangs up the phone. Before he’ll take another call from me, he has registered the domain, done the logo, and put up the website, knowing that this is going to cost me no end of ridicule and consternation from Mashery.

The reasons people go to Facebook are engaging with other humans. Like, people go there to communicate, to flirt, to look at people, and they answer largely outside their focus. The issue is out in the world outside of MySpace, outside of Facebook, on generalized content sites. Once the Wall Street Journal takes down its registration wall, it's still going to be a great place for advertising, but they no longer going to know who they're looking at.


Susan Bratton: Hey, Scott.

Scott Rafer: Hello!

Susan Bratton: How are you?

Scott Rafer: I'm doing pretty well. I'm doing pretty well.

Susan Bratton: Are you going to say everything twice?

Scott Rafer: Probably, so you can hear me. My office overlooks a lot of very loud traffic.

Susan Bratton: Oh, well, believe me.

Scott Rafer: [++] no fire engine.

Susan Bratton: Yes, it’s never as bad as any interviews coming from New York, they're always the noisiest. So, it's a Friday afternoon and I wonder if you have a beer and you're sitting at your desk.

Scott Rafer: No, no, in fact, my desk is a standing desk. There's a couch but no chair in my office.

Susan Bratton: OK. Oh, really? Interesting.

Scott Rafer: Yes.

Susan Bratton: So, what do you do on the couch?

Scott Rafer: Standing up or lying down, one or the other.

Susan Bratton: Do you take naps because you work all the time?

Scott Rafer: No, I just need to lounge and stare at white boards when I'm thinking.

Susan Bratton: Absolutely. I like to think lying down. I like to eat lying down. As matter of fact, I think we're going to do fondue on the floor in front of the fireplace tonight.

Scott Rafer: TMI.

Susan Bratton: Doesn’t that sound good? It's too much information for you?

Scott Rafer: [Laughs].

Susan Bratton: Really. Too much fondue, it's TMI? Oh, honey, have you listened to any episodes of “Dishy Mix” yet?

Scott Rafer: I'm aware.

Susan Bratton: We talk about all kinds of things on this show, Scott. So, for those of you who may not have met Scott yet, I'm sure you’ll be hearing a lot about him in the next year or two. He is the CEO of a new company called Lookery, which is an ad network for Facebook applications. I think is a brilliant idea and certainly, where there's a ton of pressure point right now in the industry. He’s also a co-founder of Mashery, so we’re going to hear about that; and the Chairman of a company called Winksite.

He recently and successfully sold his last company which was MyBlogLog to Yahoo! this year in January. So, he’s a newly minted entrepreneur millionaire. So we want to hear about what’s that done to change your life. He was also the CEO of Feedster and co-founder a company called WiFinder, a WiFi hotspot directory. He was the CEO of Fresher Information, and before that, a company called FotoNation. So, Scott, you've done a ton of start ups, you've obviously are an idea generator.

Scott Rafer: I've put them together. On MyBlogLog, the two founders, Todd and Eric, one’s a great engineer, one’s a great product guy and they needed to have a little bow wrapped around them for it all to take off.

Susan Bratton: What’s the bow that you do? What's your bow?

Scott Rafer: I sort of see the money in things. There's a lot of start ups where they generate traffic or users or something and it's all going really well from the point of view of the Web servers are getting hammered. But no one quite knows how to make it a business and give it economic value, and I tend to be a fairly good economist more than anything else and pretty good marketing guy, whatever. But, I tend to have this sort of economic flashes of, “Wow! If we package it that way, people will think it’s valuable.”

So, the first one of those I had, I actually wanted to do a particular thing in social networking, though it was suggested to me by someone. I went out and found a technology that could already do it. That was MyBlogLog and we changed 20% of the software and 10 months later, Yahoo! own it.

Susan Bratton: So tell me what MyBlogLog does, from a consumer’s perspective? How would my listeners on the show today be able to use MyBlogLog?

Scott Rafer: We generally serve site owners really well, and it’s small site owners. There are always great capabilities that users have when they go inside of something like Facebook. Everyone’s running around yapping about social software and being able to do this fun viral things with your friends. The problem is, is that everyone who spent the last 10 years building a website is excluded from all that. Whether you're the New York Times or some small individual with a decent website, you're excluded from this whole great new social network world, MyBlogLog lets you join all that.

MyBlogLog is a little piece of Java Script that you throw on to your old style website, and suddenly, your old style website has its own social network. Your users can show up and have profiles just as if you were Facebook. There’s a bunch of other subtle tricks we do that make you look bigger than you are and all these kinds of things. Part of it is that the company started as an analytics and reporting company so that we don’t only put a bunch of pretty faces on your site of your user pictures, but we also tell you how you're doing.

There's some nice, simple, understanble reports in the back that say, “Hey, here’s how you're doing to move along and to becoming one of these more modern sites than just the flat content site you were last week.”

Susan Bratton: So for example, if you have a flat content site and you put the Java Script on your site from MyBlogLog, does that mean that people who are coming to your site, the images and the pictures, the profiles that they use on social network sites become visible on your site?

Scott Rafer: Not quite. They have one more profile, they have a MyBlogLog profile. That profile is portable across all these other websites. So, for instance, TechCrunch runs my MyBlogLog [++], and if you go down the right hand column on every page of TechCrunch, there's a row of faces that says “Recent Readers”. That software is actually running on Yahoo! servers as part of, and anyone that fills out a profile because they want their face on TechCrunch, there's now a quarter million other little sites out there where their face will also show up. So, what it does is it gangs up all the little sites and collectively gives them the social power of one of the big social networks.

Susan Bratton: Got it. A lot of times, I'll go to someone’s blog and be very impressed that they’ve got this big group of pictures of people who are part of their site; but in reality, these are people who have visited their blog but are part of MyBlogLog.

Scott Rafer: Correct.

Susan Bratton: OK. Got it. It’s so funny, I'm trying to remember that television show that’s so funny. There's a character on it whose name is Bob Loblaw. He’s a lawyer and his name is Bob Loblaw, which is like blah blah, blah!

Scott Rafer: Of course.

Susan Bratton: [Laughs] No!

Scott Rafer: Or, am I speaking badly? [++] to remind you of this at this moment?

Susan Bratton: But every time you say MyBlogLog…

Scott Rafer: So, MyBlogLog [++] but the name is terrible.

Susan Bratton: I keep thinking Bob Loblaw! [Laughs].

Scott Rafer: Yes. We were in the process of renaming it when Yahoo! showed up. They were competing with the venture capitalists in that case. The reason the thing went so quickly is we're just about to sign the documents on our first run of venture capital when they decided that they were sick of making the [++] rich, and interfered. So, as part of getting funding, we would have changed the name and all sorts of other things.

Susan Bratton: Well, by the way, the television show is “Arrested Development”, that’s where Bob Loblaw is the character. I want to get to Lookery, so let's get through Blah Blah Blah. But why would you have named MyBlogLogs?

Scott Rafer: We were still arguing over a set of finalists. The one we liked was SideLife but we're going to have to buy it which [++].

Susan Bratton: Yes, and I hate to pay for domain names. But in case you can get a word [++], I like that. So, that’s good. All right.

So, let's move on to Lookery. I love that name, by the way. Beautiful name, Lookery.

Scott Rafer: That name was a practical joke on me.

Susan Bratton: OK. So, tell us about that.

Scott Rafer: Yes.

Susan Bratton: That’s “Dishy Mix” kind of stuff we like.

Scott Rafer: Fair enough. I'm a co-founder of the company called Mashery which is around a year older, and has venture capitalist in infrastructure and stuff. We put up Lookery in nine days from deciding what to do, so we had to come up with the name rather quickly. It turns out I met the CTO of Lookery because he was a my MyBlogLog user and, in fact, Mashery’s first customer.

Susan Bratton: David Cancel from Compete.

Scott Rafer: Yes. In the middle of the night, I was actually in Berlin on vacation because I wasn't really expecting the sort of company, and I said Lookery as a joke and Dave laughed, says, “Oh, you're screwed!” He said it somewhat less politely, but says, “You're screwed” and hangs up the phone. Before he’ll take another call from me, he has registered the domain, done the logo, and put up the website, knowing that this is going to cause me no end of ridicule and consternation from Mashery funders.

Susan Bratton: Because it's all…

Scott Rafer: Yes, because it's all rhymi stuff.

Susan Bratton: …rhymi stuff. Rhymi stuff! That’s so cute, you're a dude, that wouldn’t be good.

Scott Rafer: Yes, no. Then he said, “Oh, yes, and it’s hot pink, too.”

Susan Bratton: It is hot pink.

Scott Rafer: Yes, it is hot pink.

Susan Bratton: Yes, it's like magenta. It's like the printer’s magenta color.

Scott Rafer: Sort of, [++] that’s the card I think you have.

Susan Bratton: OK.

Scott Rafer: It’s really supposed to be completely hot pink, but we were too cheap to reprint them.

Susan Bratton: Yes, got you.

Scott Rafer: Dave’s a big burly dude…

Susan Bratton: He is.

Scott Rafer: …who carries--he’s Hispanic—[++] aesthetic into it. So, he just messes with me.

Susan Bratton: I love it. Well, it’s an ad targeting platform for Facebook applications.

Scott Rafer: Sort of, that’s how we started.

Susan Bratton: Yes.

Scott Rafer: Dave and I are big believers in going out and getting a bunch of data in order to define a problem.

Susan Bratton: So, you're monetizing social network content.

Scott Rafer: Yes, and we knew it wouldn’t work. I had, as a CE(?), any number of people coming in to us and complaining, “Oh, I want to buy ads in social applications. Oh, I want to sell ads off of social applicatons.” You know, complain, complain, complain. He and I were talking about it and we're perfectly aware that Facebook apps we're not going to perform any better than MySpace pages. There are a lot of them, so it's OK that they don’t perform very well. But at that time, people were under this impression that Facebook applications were the second coming of somebody, and golly gee, they're going to do wonderfully.

So, we said, “Look, all these people are not doing the Math very well, but there's a lot of market demand for putting up ads on Facebook applications and for buying them. So, OK, let's hang out a shingle really quickly and move money back and forth. In doing so, we’ll pick up a lot of data on what's actually going on.” So, we did and in the intervening months, we've ran about a half billion ads.

Dave is a genius when you hand him a ton of data, and we've ended up in all these commercial dialogs that I'm able to go chat people up and figure out what they actually want. So, we've come across a much better business plan, and the thing that took us nine days to put up in July.

Susan Bratton: So, I want to go to a break. When we come back, I want to hear about the much better business plan. Stay with us and we will be right back with Scott Rafer, the CEO of Lookery, formerly of Mashery. Now, I'll tease you about that, too. We’ll be right back.

[radio break]

Susan Bratton: We're back and we're talking to Scott Rafer. He is the new CEO of a company called Lookery, working in the social media space to monetize that massive opportunity. So, Scott, you told us that your business model is morphing which it always does. Where is the sweet spot now that you've been able to get your hands on some data and have some conversations with marketers?

Scott Rafer: What we did is we started calling the Facebook application system Lookery for Facebook. We came up with this thing that we call Lookery for the Web where places like Facebook have a lot of good profile data. There are a lots of other places on the Internet which are much better places for putting ads; however, they had no profile data.

So, we're taking the profile data in a very, very safe, privacy-friendly anonymous parts of it simply age, sex, and location. We don’t care what types of people you sleep with or what's your favorite book is or movies or any of that stuff. That’s none of our business. We take age, sex and location out of social networks, out of dating sites, out of ecommerce sites, out of ISPs, all with their permission. And, we're using it to create a broad advertising targeting network. When I was at ad tech last week, the response I got was, “Wait a minute! Self-reported demographics?!” “We're back!”

Susan Bratton: Right.

Scott Rafer: So, thought that the advertising industry and they're sick of having these giant computer programs who guess people’s demographics. They want someone to do the easy thing, and look it up. We're all there, we just look it up.

Susan Bratton: Now, I want to go back to something you said at the very beginning of this discussion. You intimated that the advertising that one might do in the social networking environment--whether it's MySpace, Facebook or whatever it might be--it is not as effective as advertising some place else even if you targeted it exactly the same way. Was that what you said?

Scott Rafer: I didn’t say it quite that way. I just said that the response rates are much lower that elsewhere in the Net.

Susan Bratton: But, isn’t that because they're not targeted yet?

Scott Rafer: No, no. They are, in many cases, targeted.

Susan Bratton: OK.

Scott Rafer: The last couple of weeks, Facebook’s got pretty good on age-targeting for me if they would remember that I'm not single, then I'd lose all those dating site ads, but other than that because everybody’s now showing the 30 plus dating ads.

Susan Bratton: Does Facebook have their own internal ad serving and targeting system?

Scott Rafer: Anyone can use Facebook’s profiles to do it, Microsoft is doing it for them at the moment. But they make the profile database available to anyone operating [++] on their website. It's just that the reasons people go to Facebook are engaging with other humans, like people go there to communicate, to flirt, to look at people and they answer largely outside their focus.

Susan Bratton: Right. Sure.

Scott Rafer: If you ask teenagers or early 20-year-olds about the ads on Facebook, they have to go look and realize that there are any.

Susan Bratton: Right, absolutely. We saw that in the MySpace research as well. Many people weren’t even aware that they were there.

Scott Rafer: Exactly. So, that’s the only issue. It’s not an issue of whether or not they perform well or badly, it’s at the mindset of the humans that are there in front of them are wrong, and it's reflected in the pricing. The average CPMs on MySpace are well known to be below a dime. Those guys have so many billions of pages that they’ll do OK and there's just a big to do in the industry how MySpace made their average eCPMs go up a penny which is actually a huge amount of money for them.

Susan Bratton: How do they do that?

Scott Rafer: They’re working on their own targeting stuff in different ad units, I'm not privy to the details. But, they're neither dumb nor poorly funded, and they're working very hard at it.

Susan Bratton: Absolutely. So, you're taking the data, this…

Scott Rafer: Age, sex, location.

Susan Bratton: …age, sex, location, thank you, and what are you doing that’s any different than what MySpace and Facebook can do with their own data?

Scott Rafer: I will go through a somewhat more modest--first of all, our primary target is to not use it on Facebook. When Facebook gets serious about offering ad targeting to the applications on Facebook, which they do not yet do, they will not put ads on your app currently. This is not a service they offer. When they change that, they're going to hound me out of town. There's no reason that I'm going to be better on Facebook than they are on Facebook. There's other start ups who believe they will be, we think they're not.

Susan Bratton: Such as?

Scott Rafer: I'm not going to criticize people.

Susan Bratton: Darn it! You shouldn’t have said they were not, then you could have just told me.

Scott Rafer: No. The guy who runs the one I'm thinking of, we accused him of playing a 3D chess in a 2D world bubble time. So, anyone who knows me well knows exactly who I'm referring to.

Susan Bratton: OK.

Scott Rafer: So, [++] because I've told that from [++] space because I like him a lot, he’s a friend. So, the issue is out in the world, outside of MySpace, outside of Facebook, on generalized content sites. Once the Wall Street Journal takes down his registration wall, it's still going to be a great place for advertising but they'll no longer going to know who they're looking at.

Susan Bratton: So, you're doing the same thing that the behavioral targeting companies are doing.

Scott Rafer: Yes, except like that battled Mattel Barbie doll? That is hard. The behavioral guys really trying and calculate what you care about. All I'm doing is sitting there saying, “Look, you're a 30-year-old woman. You probably don’t want to see a Viagra ad.”

Susan Bratton: But isn’t that what ad networks do all the time?

Scott Rafer: No.

Susan Bratton: What do you mean?

Scott Rafer: They don’t know how old you are. They don’t know your gender.

Susan Bratton: Yes, but why can't an ad network just suck that data in just like you did off the Facebook information?

Scott Rafer: They could start, Facebook’s is not enough. They need to go recruit dozens and dozens of other sources like we are.

Susan Bratton: Yes, but anybody could do that.

Scott Rafer: And maybe they will, but we're going to do it first and so far, so good.

Susan Bratton: So, one of the things that I thought was most interesting about what you said was that you're taking social network and commerce and dating sites and ISP level data. I'm sure you can get a lot more out of the ISP level data than you can out of anything else because you've actually...

Scott Rafer: You're putting words in my mouth. I said ISPs, I didn’t say ISP level data.

Susan Bratton: OK.

Scott Rafer: The ISP websites, where they know the age, sex, and location of that person is what I'm talking about.

Susan Bratton: OK.

Scott Rafer: We are not doing the clickstream snatching stuff that David’s former employer does.

Susan Bratton: That’s what Compete does.

Scott Rafer: Compete does that all the time where they have the appliance in the Compete [++] clickstream to get every click out of a household, not our business. We don’t touch that. Let's talk about NetZero for the sake of it.

Susan Bratton: Right.

Scott Rafer: If you're an ISP customer for NetZero and you go to any of the websites that they operate, they can call our websters and put your age, sex, and location into our system. We are not getting any deeper than the Web page and figuring this out. There's no need to change your privacy policy in order to deal with us. With all the click stream guys, one actually needs to call one’s attorneys and morph your privacy policy to be more invasive in order to do all that stuff. We are, by design, staying completely away from it.

Susan Bratton: So, I am still not getting--when you said you were an ad network for Facebook applications, I got that because I thought, “Oh, they're going to target customers in Facebook applications.” That makes sense to me. Advertisers want to have their own widgets--I know Facebook hates it when you call it a widget--advertisers want to have their own application and they want to be able to market themselves and track that in their application and run their ads in other people’s applications and that I got excited about. Now, what you're telling me, I can’t tell the difference between what you're doing and what any ad network would be doing if they were going to collect that level of data. Couldn’t any ad network go out and get people to sign up to do this?

Scott Rafer: I can't comment on the business development skills of other ad networks. I know that to date, nobody has. I know that all the behavioral guys have offered imputed demographics for sale to all commerce and not done very well with it. When you go and when you interview the ad buyers in the New York, they said, “Well, it was calculated not self-reported so we couldn't sell it to our big clients.” The clients want self-reported data which is what they’ve been buying since the 1950’s and why can't anyone but My.Yahoo! and Mail.Yahoo!--who offer this, by the way, and they're the only ones currently—to give me live targeting of the individual humans based on self-reported demographics, how hard could it be? So, we got busy.

And there are a number of ways to build barriers [++] and barriers deswitching(?). We will be vulnerable to copycatting for six months before we can create there’s deswitching, but we're not really worried about it because we are already do business with the Radium, we already do business with the Zoogle, we already do business with the UserPlan. They know what we're doing and they know whether or not they couldn't do it, and so far, they're just signing contracts with us.

Susan Bratton: So, one of the things that we were talking about when we were prepping for our interview today was that you knew quite a bit about the ad networks that are in the marketplace, and there's so many now. I wanted your opinion for our listeners on who you think what we call the sleeper networks are? Which ones do you think are kind of the really good ones out there?

Scott Rafer: I think people don’t pay enough attention to Zoogle.

Susan Bratton: Why is that?

Scott Rafer: They do a pretty phenomenal job of arbitraging media. They're probably the first good sized CPA network to really sit there and play their own capital well. And the whole rhyming with Google name thing I think makes people take them less serious. I certainly did for a while there because I'm like, “Why would anyone do that to themselves?” But as we sat down with them and there's only been some very small stuff between the two networks, but they're pretty impressive to work with.

I also like a company called Pheedo, which comes out of the blogging world. I ran into them when I was running Feedster. The founder there, Bill Flitter, who I think you know is grey, and they have turned their blogging technologies into a two-way advertising mechanism where advertisers can actually change the information in the ad after it's been deployed and be reactive to the market as things in a campaign developed. We've run some campaigns for them on Lookery for both Ford and Remington; and it's interesting to watch them morph the ads as things go.

So then, there are some guys at Aridian(?) out of Israel that are also sort of fascinating to watch. Everyone over here in the US has this weird, I guess, it's reasonable but unrealistic belief that the European common market is actually a common market.

Susan Bratton: Talking about Europe, I want to segue to something that we were talking about earlier, and that was this idea of the Europreneur. You spend a lot of time in Europe and talking to start ups over there, I'd love your perspective on the differences you see between Silicon Valley and the people in Europe doing start ups now.

Scott Rafer: Well, folks in Europe and everywhere else, frankly, are getting better at it. It sounds condescending, I don’t mean it that way. There used to be a huge, huge advantage to being in Silicon Valley versus anywhere else. The lead is decreasing. Whether it's because people have done well here and gone home or venture capital has become a more respective class of investment over there or just the broadband Internet communicates--the original expertise from here to remote places more quickly--there's a number of further flung cities where you find a healthier start up environment. Berlin, where I spent July, is a good one; Amsterdam certainly; Helsinki which I was in last weekend, too.

What's going on is that Americans don’t address European markets as quickly as they address the US and right now, China and India are fashionable. Europe isn’t actually a big single market; it's a bunch of little ones. It's rather a pain in the butt to market across Europe. It takes a lot larger budget than it does to market across the US, not only for language reasons but also cultural reasons. There's a bunch of people over there who are in the business of cloning successful US start ups and waiting for somebody either to come buy them or have to compete with them or whatever.

Susan Bratton: Got it.

Scott Rafer: They're doing quite well. The Samuel(?) brothers and Oliver Young in Berlin are the ones who get the most press.

Susan Bratton: It’s a brilliant strategy really. If you're on the ground there and you know how to replicate something that is here, it's the smartest idea possible. It's already a proven concept. If it works for human behavior, in general, it's going to work here, it's going to work there.

Scott Rafer: Yes, and you need the local cultural spin to it.

Susan Bratton: Exactly.

Scott Rafer: But, that aside, it's the right thing to do. There are a lot of people here who get angry about it, I think they're silly.

Susan Bratton: Right.

Scott Rafer: I keynoted a social network conference in Helsinki last Friday and I opened my presentation with encouraging people not to be ashamed to planning and to just go for it.

Susan Bratton: Exactly. Well, speaking of that, one of the things that you posited was that there are certain business cycles you've seen in Silicon Valley. What are those just in a nutshell? There’s a great blog post on it so people can actually Google Scott Rafer’s Silicon Valley business cycles to learn more about it. Could you just give us the top line as a kind of a finisher or food for thought, something inspirational?

Scott Rafer: Sure. The reason I want Europe to begin with was that their cycle at the end of the dot-com boom ended later than ours. So, I moved over there in early 2001 to work for VCs and help start companies and all that kinds of things because they were still having fun whenever one in San Francisco was crying [++].

I grew up in a tech household. My father was a mainframe programmer and then, minicomputer and microcomputer product manager. And, technology cycles have been going on since the 1950’s with mainframes where there is a period of innovation, where everything is going simply crazy in terms of new capabilities. This is from 1994 to 1997 or 1998 in Silicon Valley, and then you get in to these periods of consolidation where the financial players move in, whether it is the public market financial players or acquires or what have you and start applying a ton of cash to these now rather stable innovations. There are not a lot of actual new technologies that was put together in 1999 and 2000. There was just a lot of money pumped in to technologies that actually were starting to work pretty well. I believe the cycle repeats over and over again, and it appears that they are at least eight years long and no longer than 11 years.

Susan Bratton: Yes, and aren’t you saying we're like 4-5 months out from another bust?

Scott Rafer: I've been saying two to three next year. I think it has a lot to do with the US election cycle. What I've said is that I don’t wish to have a lot of market exposure after March, and I've been saying that since early 2004, that March ’08 was my limit.

Susan Bratton: What do you mean by market exposure?

Scott Rafer: I'll be out of public tech equities to the extent that--I don’t have many private technology investments. I don’t Angle invest, I only invest on my own stuff. Pretty much, if the only private company I have stock in is Lookery at that point, I'll be in pretty good shape. We started this with the belief that we would not see the returns from that until 2010 or 2011 when things come back. Both the advertising cycle and the dot-com cycle are probably getting pretty frothy. You know there's a problem because they decided that ad tech was in [++] next year.

Susan Bratton: Well, actually, they haven’t decided that yet.

Scott Rafer: Did they? Someone put something that look like a real announcement in front of me at ad tech.

Susan Bratton: No. As matter of fact, we're still booked at the Hilton for next year. We always talk about it.

Scott Rafer: Don’t change it.

Susan Bratton: I know, there are as many people who say, “Don’t change it” as there are who say, “God! We need more space.”

Scott Rafer: Yes, let them sign their contracts up front.

Susan Bratton: It's interesting, too, that Forrester just came out with the report that said that we’ll have a growth that goes from 8% now to 18% by 2012, spending will triple to $61 billion in the interactive marketing space. I don’t know if that’s true. I do know we're out of time. But, we’ll see where the frothiness goes.

I really had a good time having you on today. Thank you for kind of going deep on the social networking, targeting, and behavioral targeting space. It was helpful for me to have you kind of walk us through that.

Scott Rafer: Of course.

Susan Bratton: You can take a bye now. So, thank you for coming on, Scott. You've been listening to Scott Rafer, he's the CEO of Lookery. It's hot pink and you should check it out. We will have a blog post about you as some links to your content as well if anybody wants to connect up with you. Thank you again for everything.

Scott Rafer: Of course, I'm happy to do it. Anytime.

Susan Bratton: Good, and if you would like a transcript of this show, you can go to and I hope you subscribe in iTunes or RSS on my site. Thanks, have a great day. This is your host, Susan Bratton, and I’ll be back next week with someone who’s fun and frothy. Bye.

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