Building a Cool Technology Company from Chicago: Narrative Science CEO Stuart Frankel (Part 3)

Sramana Mitra: Were you acting as an agency?

Stuart Frankel: We were. By 2005 or 2006, we were managing close to a billion dollars in media.

Sramana Mitra: Is this a regular agency business model with 10% fees?

Stuart Frankel: It was also based on performance. We took a piece of every transaction. Ultimately, that arbitrage went away. That’s a much lower margin business than it is today. During that time period, it was a terrific business. Because of our growth in the search business, we started to get noticed by other companies. We were contacted by DoubleClick in late 2003. They expressed an interest in buying the company. We sold the business in June 2014. DoubleClick acquired the business for our search technology. The plan was to integrate our search platform with the DoubleClick ad serving platform. It was a good deal. We sold the company for about $65 million, which seemed like $6 billion at that time given the dark period that had we survived from. It was a terrific deal for our investors and our employees.

I was actually going to leave the company. This was in June 2004. I enjoyed the run. It was another great experience for me, but I didn’t necessarily wanted to be the number two person in the subsidiary of this larger company based in New York. Through a series of serendipitous events, I ended up becoming the CEO of Performics right around the same time that the DoubleClick board decided to put the company up for sale. DoubleClick had been in business for several years at that time. It went public very well capitalized, but had just made some missteps strategically.

The DoubleClick board put the company for sale. I had joined the senior management team at DoubleClick and participated in the sales process. At that time, the people who were involved in the transaction felt like the company would be split up into several pieces. I would go off with the buyer of Performics. Other people would go off with various DoubleClick assets. That wasn’t actually how it turned out. A private equity firm Hellman and Friedman purchased the company. I ended up staying with DoubleClick and kept a senior role. The company went private in July 2005. I joined the senior executive team at DoubleClick and took on some additional responsibility including some of our technology business in Europe. Essentially, I was working for a private equity firm at that point.

Sramana Mitra: This brings us in 2005?

Stuart Frankel: Yes.

Sramana Mitra: How long did the DoubleClick assignment last?

Stuart Frankel: We took the company private in July 2005. As often is the case in situations where the company was once public, there was an opportunity to make changes to the business. We got out of a number of businesses that DoubleClick was in. We were able to acquire several smaller companies to expand our market from a geographic standpoint to help the core technology business of DoubleClick. The business then was ultimately acquired by Google in 2008. It was a terrific deal. Our investors were really pleased. It was great for the employees. It was a terrific experience for me. If you think about where I started at Performics with 15 people and relatively little revenue to ultimately be a part of this great turnaround success story that was sold to Google eight years later, it’s just an amazing run.

Sramana Mitra: Did you stay at Google?

Stuart Frankel: I stayed at Google for six months. One of my last tasks that I had to do was that Google didn’t want that search engine marketing business. The Performics business split up. A piece of that business was sold. I was involved in that transaction. The really interesting thing about that last transaction was that it represented the fourth sale of various parts of Performics over four years. We actually had four separate transactions that involved a change of ownership of that asset and I was part of each one of those. We managed to continue to grow the company during that entire period. When I ultimately left, the Performics business was doing about $75 million a year in revenue.

This segment is part 3 in the series : Building a Cool Technology Company from Chicago: Narrative Science CEO Stuart Frankel
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