A few hours ago we signed an agreement to sell Dapper, my four year old baby, to Yahoo! for an undisclosed sum that someone will probably leak to Kara Swisher in a day or two. I thought this an opportune occasion to summarize an amazing four years and to describe the reasoning behind our decision to sell Dapper.

Dapper emerged about four years ago with, I'd like to think, a bold mission statement: "To put the right content, at the right time, in front of the right user". We envisioned a world where content would flow to the place where it brings the most value, both to the end user and the owner of the content, without the friction that existed and to a large extent still exists on the web. We were inspired by TBL's work on the semantic web, but thought we understood how to make that vision practical, in a way that will actually impact every web user's life.

From early on, we set our eyes on the display advertising platform, and identified it as the largest, and most important, content distribution platform on the web. Alas, one that is primarily used to distribute annoying images that bring little value.

We believe that ads can and should become a valuable part of a user's web experience. Heck, we believe they could be the most valuable part, smartly understanding user's intent and delivering relevant content, products, and offers. We Imagine a web that understands your intent, even before you announced it in a Google search box, and then delivers you content that matches that intent as you browse the web. That web is not passive, waiting for you to do all the heavy lifting, rather, it helps you get where you want to go, using display ads as a smart search and navigation system.

This is the type of experience we set out to enable, and is the type of experience we have managed to build for our customers and for their users. Our approach has been to unify the stack, and as such, we have built a best of breed dynamic ad solution, ad server, algorithmic media buying and RTB engine and data analytics platform. For many of our customers, we provide a one-stop shop that handles both smart creative and targeted media. If you're on our self-service smart campaign platform (now in beta), you can easily create dynamic ads, define audiences, traffic and track the campaign through the various RTB exchanges, all within the length of a single episode of Mad Men.

With substantial and growing revenues, as well as the trust of major brands like Expedia and eBay it's legitimate to ask why we decided to not continue on an independent route, and instead decided to sell Dapper to Yahoo. Below I will try to give an honest answer to this question.

Money?

First, let's get the money question out of the way - yes, the exit was very nice for everyone involved, both the founders, the employees and the investors come out from the deal handsomely compensated. That said, none of us starved before, and knowing both Jon and myself, the money was not a main reason to sell. As for our great investors: Accel, Exeed and Mitch Kapor - they have supported us extensively through thick and thin and have pledged to continue supporting us if we decide to continue our independent route. While we did generate a very nice multiple on investment, they do not really need the Dapper exit to improve their IRR :)

Leverage!

So if money wasn't the main reason, what was? One important reason has to do with a word I like: Leverage. If you take a look at the online advertising ecosystem: you see it is an extremely fragmented one, with hundreds of companies working on different aspects of the advertiser to publisher to user pipeline and more than $2.5B in VC money poured into the space in a short amount of time.

It is quite apparent to anyone looking at this ecosystem that the chances of building a huge business in this market today are extremely small. Aggregating a double digit percentage of the demand or the supply in such a fragmented market is virtually impossible. What this tells me is that while we were on a path to build a very nice, successful business, fulfilling our goal to actually dramatically change display advertising on the web, and transform the majority of ads to be dynamic, informative and relevant would be very hard feat to do independently.

Yahoo, on the other hand, is the perfect partner for such a task. In display advertising, there's no player with bigger leverage than Yahoo. Being part of Yahoo, we can actually make a dent in what people consider an ad should be. What they expect it to be. We have a chance to lead a revolution centered around the ad unit, the experience it takes a user through, the conversation it generates between a brand and a person. We have seen a thirst for it in the last year as we embarked on our Fixing Advertising crusade and we believe it can be done.

And Yahoo itself, today, is the big player that is most focused on the quality of ads. As creative agencies know, ads that run on Yahoo pass the strictest scrutiny. Yahoo pioneered the SmartAds program that gave a big push to this small yet pivotal market segment which deals with bringing science to the ad unit itself. As such, it has its mind and heart in the right place, and the synergy between our tech and Yahoo's scale can really make an impact on the web's ads.

Technology :)

At Dapper, we are first and foremost technologists. I can easily say that our team built some of the most impressive web tech out there, from a Javascript based machine learning engine, to a semantic search engine, to a full blown RTB engine - we always find a way. We are lean, we move fast, we never branch and continuously deploy. We have built an amazing product & engineering team that I am totally in love with.

In Yahoo, I found like minded people. People who are deeply interested in technology, and its manifestation as products. I met people that in a short amount of time I learned to respect their technology chops. I'm looking forward to meeting many more of them and actually learning from them. This is true not only for advertising but also for Yahoo's developer's initiatives. YQL, Pipes and open.dapper.net are really close in their goals and objectives. The option of these technologies integrating really makes my mouth water. While it still is early days, I'm hopeful and excited about the opportunities of joining forces around the needs of web developers. I think we can deliver something really potent.

Israel

Finally, for me, Yahoo's commitment to sustain and grow Dapper's Israel team put the last brick in place. I think Israel & Yahoo is a great match, and there is no reason Yahoo should not have a significant development center in Israel in the future. Today, Yahoo research has a great lab in Israel, under the leadership of Ronny Lempel. This small research group that has managed to generate amazing work, like winning the Netflix challenge, or this innovative travel itineraries paper (Constructing Travel Itineraries from Tagged Geo-Temporal Breadcrumbs). Now, Yahoo, for the first time, is taking the plunge with a product development lab which we hope and believe will grow to become a successful center, tapping into the raw Israeli talent, just as companies like Intel, IBM, Microsoft and Google have successfully done.

What am I afraid of?

Obviously, taking such a plunge comes with fears and doubts. While I don't care much for the bi-weekly Arrington Yahoo bashing, I do care about delivery and execution. As our lord said, many years ago, real artists ship, and at Dapper, we ship daily. Inside Yahoo, this may change somewhat, but our hope is that it will not change too much. The burden will be on us to establish the level of confidence and trust that will allow us to move forward rapidly, and hopefully, we'll be able to find the golden path.

Thanks

To the amazing Dapper team. None of this was possible without you all. I'm so lucky to have been working with you these past years, and am excited about continuing our work together in this new home!

Special thanks to my co-founder, partner and dear friend, Jon Aizen, and to my dear family which travelled half the world following my passion.

Now, back to work.