Ads Come to P2P Networks

Skyrider, a Mountain View, California based peer to peer networking company has figured out a way to embed advertising into P2P search results and wants to become a P2P marketing platform.

The company, which was profiled earlier on GigaOM has also raised an additional $12 million in Series C funding led by Com Ventures, along with existing investors Sequoia Capital and Charles River Partners. The company has raised a total of $20 million so far.

Skyrider started out as Cright and focused on anti-piracy solutions, but later changed its strategy. Even in our post earlier, the company remained quite ambiguous about its go-to-market strategy, and its plans. The company is still very coy about revealing its technology and how it works. From whatever little they revealed, here is how the system works.

Skyrider connects to P2P networks such as Gnutella by acting as an ultra peer on the network, and thus tapping into a P2P ecosystem. I suspect the more nodes they add (and hence building their own network), more queries will be sent their way. These queries are enough to sell ads. For instance, a Justin Timberlake search could embed ads for JT posters, concert tickets or even legal music downloads.

CEO Ed Kozel tells us that the company is in talks with media companies and working out ways to promote ad-supported rich media content in these P2P networks. “Content owners who are looking for new ways to reach out to their audience,” he says. Why not? After all they want to be YouTubed… again!

The growing traffic on the P2P networks is what is making them go googly eyed. P2P networks continue to grow in popularity, accounting for nearly 60% of traffic on the Internet (as per Comscore) but no one has been able to capitalize on its in an effective manner. (Please don’t bring up Kazaa. We all suffered from spyware, thanks to them.)

Of course, Skyrider ads could result in people moving onto another network or off the P2P nets all together. David Baxtin, in response to our previous post on Skyrider had expressed some concerns, that are pretty legit.