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April 14, 2009

Will a Liberated StumbleUpon Do More to Entice Advertisers?

Will eBay's decision to sell StumbleUpon back to its original owners lead to more ad innovation at the Web discovery engine?

The move, announced yesterday, won't bring much short-term change to StumbleUpon's marketers or its end users. However founder and now CEO Garrett Camp suggested the company's return to independence will free it up to innovate new products and features.

Those features almost certainly touch on advertising. Speaking with ClickZ last fall, the company said it would soon offer content category recommendations to ad buyers. It also said it wanted to improve its analytics package.

StumbleUpon's ad model is simple, and totally unique. For every 20 or 30 Web pages users turn up when they click the "Stumble" button on the toolbar, they get one page that is a paid result. StumbleUpon says it has tens of thousands of individual ad buyers delivering paid page placements into the browsers of toolbar users. All advertisers pay a flat $50 CPM, and the minimum spend is in the $20 range.'

StumbleUpon boasts approximately 7.4 million unique users, up about 25 percent since September. In addition to backing from founders Camp and Geoff Smith, investors Ram Shriram of Sherpalo Ventures, Accel Partners, and August Capital helped buy out eBay's stake in the company.

"We are grateful to eBay for its guidance. However, we realized there were few long-term synergies between the two businesses," Camp said.

Posted by Zachary Rodgers at April 14, 2009 10:44 AM

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