Sramana Mitra: It sounds as though you would prefer to exit into strategic than to deal with all this financial mumbo-jumbo.
Asher Delug: Absolutely. Preferably a strategic that is public, so we can participate in the further upside of the company. I think a cash stock deal with a public company would be an option because it gives us the ability to make a difference at the new company and drive more equity value for ourselves.
SM: You said there are 100 ad networks in the space you are competing in, and there are about 10 that are on the target lists of Facebook, Yahoo, or any other of these major companies that have the kind of equity and market capital to be able to acquire a $120 million company with all your market capital expectations. Which 10 are on that shortlist?
AD: Millennial Media, even though it is public, is a phenomenal company. I own stock in Millennial Media – not insider stock, I just bought it in my broker’s account, because I thought they are undervalued. Another one is Jumptap. There are rumors that they may be doing a transaction soon. Another is InMobi. They have a very messy balance sheet scenario. They raised a lot of money and lost a lot of money. That is more complex, but definitely has assets. Chartboost is a new player that has exploded onto the scene, and I am very impressed by what they have done. I thought we were the fastest-growing company in the industry, and then I saw them. They are really on fire. The other interesting thing are RTB exchanges. The one that has emerged as a leader there is MoPub.
SM: What you are saying is that in the next 18 months we are going to see acquisitions in this space, and the five companies you mentioned are going to be the first ones to get off the table.
AD: Big time. You are going to see acquisitions and IPOs. Today there is only Millennial Media and Velti, which are the only public mobile advertising companies. It is a multibillion dollar industry, and it is growing extremely fast. You will see in 10 years from now there will be a few dozen of them.
SM: I also think the larger players will need to take their positions. I can imagine that there will be some acquisitions happening by big companies such as Facebook.
AD: I am not so sure about Facebook because they have tremendous traction on their own.
SM: Facebook has by far the best data in the industry on actual human beings. So they are in a unique position.
AD: Also because of their success they have been able to attract such a massive engineering team. Yahoo should have bought Millennial Media or other mobile ad networks.
SM: Frankly, I almost feel like instead of buying Tumblr, this kind of acquisition would have been a better strategy for Yahoo.
AD: One hundred percent.
SM: They spent more than $1 billion on Tumblr without a clear monetization path, whereas this one is a real business.
AD: I still think Yahoo is going to make a large mobile ad network. I think it could be happening this year, actually.
SM: Good luck to you. I think you are doing something phenomenal, and you obviously are a fabulous entrepreneur. Congratulations on navigating your ship so far, and good luck with what happens in the acquisition world. We will keep an eye on what is happening.
AD: Thank you. We really appreciate the opportunity. It sounds like a very interesting organization, and if there is any way we can support it further in the future, let us know. We are definitely on the same page with you as far as wanting to foster other types of startups that are not your typical Silicon Valley VC-backed companies.
SM: I am sure you will be an inspiration for our audience.
AD: I appreciate that.