Clearspring CEO McGrory On The Acquisition of Xgraph

Clearspring buys XgraphOn Tuesday, sharing data company Clearspring announced the acquisition of Xgraph, a “data science company focused on modeling and monetizing the web-wide social graph.” Read the release.

Clearspring CEO Ramsey McGrory discussed the acquisition and its implications. Why was this be the right time to buy XGraph? What was going on at Clearspring that made it the right time?

RM: There’s a lot happening in the industry and at Clearspring.  We are in a triple growth market: Digital is a growth market within advertising. And then within digital, we have social and data‑driven audience markets exploding, both for advertising and for content management.  Clearspring is at the nexus of these growth markets and growing ourselves.  We acquired Xgraph for its data science technology and deep executive team.

If you look at the ad serving space in 2007, in the span of a year, all of the ad serving companies were acquired. And since that point, those different players – Google, and the combination of Yahoo, Microsoft, and AOL, even more recently MediaOcean – are competing to build the tech stack and to consolidate media into their marketplaces.  If you play that forward and they’re successful, we will have three very large media marketplaces that need a massive amount of data to enable smart buying and selling.  There are very few ‘big data’ players who can help them do this.

There are three fundamental data driven questions: a) what data do you have, b) how do you activate it, and c) with whom do you partner?  Clearspring now has the largest multi-graph platform, a sciences team, and our partners are inviting us to help them activate it – for research, planning, targeting, measurement on the advertising side and content sharing and custom content management on the publisher side.

What exactly is the multi-graph?

‘Multi-graph’ means that we have several axes of data – from search, brand affinity, intent and several forms of social data that we leverage to build a multi-dimensional understanding of how an audience is connected.  The social graph has proven to be a powerful platform, but this single graph only represents one dimension of how we are connected to one another.   There are multiple dimensions of a user that can be important. XGraph not only models social connections, but also multiple other types of connections.  This is a very powerful idea.

What happens to the Xgraph team?

Everyone’s coming over, it’s 15 people. They’re a New York‑based company. Of the four founders, two are in New York, two are in Silicon Valley. The two out west are former Yahoos and both are Stanford PhDs with strong data science backgrounds. One’s got a PhD in Mathematics, the other has a PhD in Organizational Behavior. They were also the two data scientists that ran Yahoo’s first-ever social targeting tests in 2006 – well before social was a hot topic.  The two east coast founders are also long time execs in the industry. They previously built Solbright (now part of Operative) and have been working together since founding that company 1997.

Collectively, the XGraph team has spent the last three years building out this data science technology and understanding.  Their unique insight three years ago was that “graph data” is about more than just social graphs, hence the XGraph name.  What do you think this means for other ad networks and demand‑side platforms in the industry? What’s in it for them here, with this combination?

I can’t speak to what ad nets or DSPs will do, but we’re focused on continuing to build great publisher functionality – such as more innovative ways to improve social sharing and analytics and beyond in our AddThis product. On the advertising side, we’re looking to apply our multi-graph platform for publishers, marketers and agencies. Our focus is on figuring out how the integration happens in order for buyers and sellers to take advantage of the assets that we’ve developed, assets in terms of the underlying data set and then our understanding of applying the multi‑graph to marketing.

By John Ebbert

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