Why Tim Draper's latest virus isn't catching [Glam.com]

Published: February 5, 2008, 4:42 pm

Tags: glam media, glam com, tim draper, venture capital

Glam Media is the "fastest growing company on the face of the earth," according to its backer, the always hyperbolic Tim Draper. In an interview with AlwaysOn's Tony Perkins, Draper compares Glam, an online ad network, to past investments like Hotmail and Skype. But aside from enjoying his backing, there's little resemblance. A better comparison? Enron, another company with metastasizing revenues.What does an online-ad company have to do with an energy concern? Like Enron, Glam's true business isn't selling; it's arbitrage. Glam grows its revenues, rivals say, by acquiring ad inventory from websites and then attempting to sell it to media buyers at higher prices. Buy low, sell high is a time-honored business model. But it's not a recipe for exponential growth spurred by viral marketing, as Hotmail and Skype were. Nothing in Glam's business encourages a Glam advertiser to sign up other advertisers; nor does it spread from publisher to publisher unbidden. All Glam has going for it

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