Associated Content Struggles With Image; New CEO On Board

It might look like Associated Content is in good shape for a start-up with a $5.4 million first round (a second round is underway) — and prominent board members including Tim Armstrong and Eric Hippeau. It also has some name recognition. Unfortunately, that last item stems from controversy over a model based on paying for content that can be search optimized and used to generate revenue through Google AdWords — and from the involvement of top Google ad exec Armstrong, which some argue is a conflict of interest. (Hippeau is on the Yahoo board; his SoftBank Capital led AC’s first round.)

New CEO Geoff Reiss was startled by the intense reaction AC draws. Reiss worked with Armstrong in the ’90s at internet pioneer Starwave. Reiss stayed with ESPN.com as ownership changed and spent a number of years as an ESPN new media exec. Most recently, he was on the ESPN Original Entertainment side when old friend Armstrong suggested the switch. He moved to AC a few weeks ago and is based in New York, where the company is expanding; technology and content acquisition are still based in Denver, where it was founded.

AC — tagline: “the people’s media company” — wants to be thought of as an online publishing “showcase” for all kinds of content, not as a matchmaker between content and search terms. Reiss: “The company isn’t going to realize its potential unless it’s producing really good content. We’re not going to create a successful company with just mediocre content.” But AC is based on the idea that anyone can contribute and be paid, and that enough of that material can be syndicated and read to make it worthwhile for all involved.

It’s not the only content company with a focus on search optimization; the New York Times Company, for instance, embraced the SEO technology and techniques that came with About.com. But NYTCO’s an existing company learning how to use new technology to increase revenue while AC exists for that purpose.

As for the idea that Armstrong has a conflict of interest, Reiss says: “The only people whose opinion I really subscribe to as to whether a conflict exists here is folks on senior management side of Google. They

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