Can Browser Plug-Ins Be a Business?

Startup Cooliris could show some promise with software that offers 3D-like Web browsing and a new spin on e-commerce shopping carts
For as long as I can remember, I have been highly skeptical of the concept of browser plug-ins as a business. Whenever I'd learn of a browser plug-in startup fetching millions of dollars in venture funding, I'd just shake my head. And while my skepticism hasn't really gone away, I am beginning to view a select few of these players with fresh eyes.

What brought on this change of heart? A chance meeting with a senior executive at two-and-a-half-year-old Menlo Park (Calif.)-based startup Cooliris, which has developed software that can be added on to any popular browser on either Mac or Windows and essentially allows you to browse the web in 3D. I have been using this plug-in for a few weeks now, and have become a reluctant admirer, as it allows me to sift through copious amount of information—images and videos in particular—very quickly.

For as long as I can remember, I have been highly skeptical of the concept of browser plug-ins as a business. Whenever I'd learn of a browser plug-in startup fetching millions of dollars in venture funding, I'd just shake my head. And while my skepticism hasn't really gone away, I am beginning to view a select few of these players with fresh eyes.

What brought on this change of heart? A chance meeting with a senior executive at two-and-a-half-year-old Menlo Park (Calif.)-based startup Cooliris, which has developed software that can be added on to any popular browser on either Mac or Windows and essentially allows you to browse the web in 3D. I have been using this plug-in for a few weeks now, and have become a reluctant admirer, as it allows me to sift through copious amount of information—images and videos in particular—very quickly.

Cooliris (formerly known as PicLens) recently hired Shashi Seth, formerly chief of monetization at YouTube, as its chief revenue officer. Last week, he shared some interesting facts about the company. Among them:

• Since launching the software back in January—and without spending a dime—Cooliris now has 2.4 million monthly active users, and continues to add between 30,000 and 50,000 new users every day.

• An average active user spends at least 30 minutes using Cooliris to sift through information.

• There are 9 billion pieces of content that have been shared by their users, and nearly 270 million pieces have been "interacted" with.
Advertisers Wade In

Outstanding numbers aside, can Cooliris make money? Seth thinks it can. Indeed, the company recently ran a test advertising campaign that resulted in a clickthrough rate of more than 5%, a very high number considering that most online ad campaigns get clickthrough rates of less than 1%.

The early results have attracted a few advertisers, each of whom is willing to wage a few thousand dollars on the plug-in. And Seth was even more enthusiastic about a new kind of shopping cart Cooliris has developed for Amazon (AMZN), which in a test led to a total bill of around $32 per cart. As this could be a way for the company to generate commissions, Cooliris is now planning to launch an extended version of that shopping system that would include several other online retailers, including Apple's (AAPL) iTunes Store and Wal-Mart (WMT).

Admittedly, these are early days for Cooliris. But its test stats were intriguing enough that I was inspired to more closely examine the other browser plug-ins installed on my Firefox browser that I use most often, just to see if there were some with similar utility, usage, and potential as Cooliris.
Others to Note

Apart from Cooliris, my short list includes Digg, AdaptiveBlue's Blue Organizer and FoxMarks. While Digg is hardly a browser-based company, those four browser plug-ins all do the following:

• They offer me something valuable as they try to make money off my surfing habits.

• With the exception of Digg, the other three mask complex technology behind what seem like simple browser add-ons. Take for instance Foxmarks, which is essentially a simple tool that allows you to sync your browser bookmarks across multiple computers. All this information when harnessed and processed can be used to build a "better recommendation service" for Web-based information.

• Most important, they allow me to either save or organize information I gather on the Web on a daily basis. And by doing so, they help me sift through tons of information very easily.

If browser plug-ins have these essential qualities, then maybe there's a standalone business there after all. We'll see.