Advertisers including Kimberly-Clark, Levis, MTV, Sprint and Toyota are increasingly using "widgets," clever little online applets, to market their brands, says Eyal Magen (pictured), cofounder and CEO of Gigya Inc. The company, which makes tools for creating, distributing and monetizing widgets has closed a $9.5 million Series B round led by Mayfield Fund. The round included Benchmark Capital and First Round Capital, investors in the company's $3 million Series A round, which closed last April.

Gigya's Wildfire suite of tools, which works with widgets, such as RockYou's popular Slideshows, helps developers distribute, analyze and monetize widgets. For example, lets say you just got home from the Langerado music festival in the South Florida Everglades and you've got a bunch of killer photos from Saturday night's R.E.M. concert you want to share with your friends. With RockYou's Slideshows, you can make a cool widget to show off your pix. With Gigya's Wildfire, you can embed your Langerado photo-op widget in your MySpace page.

Here's where the advertising -- and the monetization comes in. While you're embedding the new widget in your social networking page, you might be asked if you want a free widget from an advertiser. If it's clever enough, you just might say yes. According to Magen, tens of thousands of people said yes to Sprint's Valentine's Day promotion, a "seductive serenade" sung by Isaac Hayes: "You write the lyrics; Isaac will sing them real sexy-like," is the come-on.

"Widgets provide a new opportunity for marketers to get into a conversation with their consumers in a way that was never before available," Magen tells Tech Confidential. "Instead of interruptive types of advertising, such as banner ads and pre-rolls in videos -- stuff the user didn't ask for -- widgets on social networks are an opportunity for users to embrace a brand or content from a brand."

"As the widget economy grows, players like Gigya that are publisher-friendly and with demonstrated momentum will become the infrastructure leaders of the social Web," Navin Chaddha, Mayfield managing director says, explaining the decision to back the firm. "Gigya is the number one widget distribution network, and we are excited about their team and their unique ability to monetize that network, using the pay per install model." Chaddha has taken a spot on Gigya's board of directors, joining Benchmark general partner Michael Eisenberg. (First Round's Josh Kopelman does not serve on the board.)

Gigya's Magen and co-founders Eran Kutner and Rooly Eliezerov learned about contextual advertising when they served together as vice presidents at Hotbar.com, sold to Zango, reportedly for $50 million, in 2006.

The trio has chosen investors carefully, picking ones with portfolio companies that could be important strategic partners: First Round backs RockYou; Benchmark backs social network Bebo; and Mayfield backs widget maker Slide Inc. Currently, Slide uses its own distribution tool. But perhaps in the future, Slide will use Gigya's Wildfire. -- Mary Kathleen Flynn
See Oct. 2007 post on RockYou from Tech Confidential
See Jan. 18 post on Slide from Tech Confidential
See Mar. 5 post on Benchmark from Tech Confidential