Itech startup of the month.

• Author: PETERSON, ERIC
• Position: XYZing - Brief Article

INITIAL LIGHTBULB: A native of Japan Kiyoshf Murata, president and founder of XYZing took around about route to becoming an internet entrepreneur. After spending the first 30 years of his professional life as an architect he moved into speculative real estate and venture capital a decade age. About the same time, the internet caught his eye. "The on-ramp for the superhighway was there, but the highway wasn't paved jet," he jokes. Murata launched QSD Inc. in late 1999 to bridge the gap between one of his primary leisure pursuits -- online gaming -- and near-kaput business model -- that of banner advertising on the Web. Murata sought to create a model for online advertising that was not defined by interrupting the audience's attention. His concept integrating sponsors brand images into free online games.

IN A NUTSHELL: After initially envisioning a B2C hub site loaded with corporate-sponsored games, Murata retooled the concept at the onset of the dot-com shakeout Now a B2B, XYZing seeks to distribute games with embadded advertising messages to a coalition of host sites, splitting ad revenues with these partners. Murata notes that most online games are licensed from developers for a fee. "Now (Web sites)are taking them off... because they don't want to pay," he says. "The better alternative is not only free but to make revenue from it."

XYZing is now in the pre-revenue process of inking hosts sites to its program to order to build an audience that can market to advertisers.

THE MARKET: Despite the dot-com shakeout, industry observers expect online advertising to groin a dynamic pace eclipsing the ad growth curve of television in the 1950s and cable in the 1980s. The $11 billion spent on online advertising in '00 will balloon $63 billion in '05, according to Forrester Research.

And, while ad rates have dropped markedly...