Update:I sought out Scott Rafer, president and CEO of Feedster, at BlogHer, hoping for a little more color on the company’s recently announced deal with AOL—now its biggest partner. Still not a lot of specifics but I do have a better understanding of the financials Feedster has in mind when making deals. When I first saw the My AOL page with its sponsored links sidebar I wondered if Feedster and AOL had a combo licensing fee-rev share deal. I should have made clear in the first writing of this—AOL described it as a licensing deal when I asked last week.That’s not the case; it’s a straight licensing deal. I wondered what the other options might be.
As a rule, Rafer explained, Feedster looks at three options for compensation for use of its search engine and other technology: traffic to its own ad network, revenue sharing or a flat fee. Rafer and AOL shied away from this part but I came away thinking a licensing deal was really the only option with AOL.com given AOL’s ownership of Advertising.com and its prior ad relationships. Adding yet another ad network or ad share wasn’t in the cards.
Typically, rev share deals have lower guarantees but potential for higher returns.