ChoiceStream brings new technology to struggling business.
It may seem like the height of the Internet boom all over again this week when ChoiceStream Inc. officially launches and debuts its flagship Web personalization software, MyBestBets.
The startup promises that its technology, based on a statistical analysis model called Bayesian choice modeling, works better than that of foundering Web personalization pioneer Net Perceptions Inc. ChoiceStreams technology is based on an understanding of the content underlying recommendations.
ChoiceStream has been testing MyBestBets at America Online Inc. since earlier this year. The software makes movie recommendations on the AOL online service by taking into account matching keywords found in reviews of movies in the Internet Movie Database.
The software takes into account direct customer feedback, often asking customers simple questions to get a better idea of their preferences, rather than just building customer profiles on clickstream data.
"Theres a huge amount of noise in raw clickstream data," said Michael Strickman, chief technology officer of ChoiceStream, in Cambridge, Mass. "Just analyzing random clickstream data isnt good enough. You can get lots of useful information on customers from asking them questions. And since its opt-in, theres no privacy issue."
The company, founded by a former AOL executive, Steve Johnson, hopes to use its close relationship with AOL as a springboard to sparking renewed corporate interest in Web personalization. Its software powers personalized entertainment listings in AOL 9.0, as well as the personalized QuickView tab on the AOL 9.0 welcome page.
AOL is expected to add personalized gift, shopping and games offers built on ChoiceStreams technology by early next year.
ChoiceStreams launch comes less than two weeks after Net Perceptions, of Edina, Minn., announced that it was buying back its stock from shareholders as a prelude to winding down its operations.
Though at least a half-dozen personalization software vendors have disappeared, enterprises continue to make use of the technology.
The Boston Symphony Orchestra introduced personalization to its Web site using Art Technology Group Inc.s Dynamo 6.0 application in February 2002. The personalization is based on profiles customers fill out at the site. When customers log in to the MyBSO portion of the orchestras site, theyre shown ticket offers pertaining to their interests as well as a personalized calendar of upcoming events they would likely be interested in.
"Were only at the tip of the iceberg now of what Dynamo can do," said Rich Bradway, manager of Internet marketing for the BSO, in Boston. "Were bringing in more money through the Web and saving money in the process because we can cut down a lot of our overhead costs."