Online-ad network Adify sold for $300 million

The news of Adify's $300 million sale was likely the first time most had heard of the online-advertising company. The San Bruno startup was so obscure that Silicon Alley Insider, which first aired the rumor of a sale did not include Adify in its list of the 25 most valuable startups. The price cable-and-newspapers conglomerate Cox paid for the startup would otherwise qualify it for that list. Ad networks, which allow advertisers to buy and publishers to sell ads across multiple websites, have become faddish; and Adify, which allowed anyone to launch a network of their own, caters expertly to that fad.

NBC, Martha Stewart, and Forbes use Adify to run their own networks; with capable sales forces but undersized websites, ad networks allow them to expand their Web reach. Cox was interested in signing up with Adify as a customer, then decided to buy them outright.

One hopes Cox executives don't think an Adify buy turns them into Google overnight. It gives them technology. But the value of a network isn't primarily in the technology; it's in the data, which allows the operator of the network to refine targeting, improve pricing, and increase its take. A number of small, atomic ad networks may keep salespeople better employed. But they won't overturn the industry's status quo.