AN ADVERTISING-BASED MODEL FOR PRODUCTIVITY SOFTWARE.

"Advertising pays for TV and radio content," says Adam Green, "so why not software?" This isn't just a rhetorical question for Green: His company, Andover.net, has just launched a Web-based image-editing tool called GifWorks that's quickly ramping up to more than a thousand dollars a day in banner ad revenue. "Eventually, I think most people will move to this model," Green predicts.

To be sure, Andover.net has a running start in generating ad revenue. The company runs a group of high-traffic Web sites that generate 16 million pageviews a month from free software downloads and other digital content. As a result, Andover.net already has relationships with Web advertisers--and an audience that regularly visits the site for graphics tools. "GifWorks has been up for two weeks and so far the only marketing has been on our site," says Green. "We're already getting something like 2,500 people a day who are using the product."

And the fact that thousands of people are using GifWorks is more important than Andover.net's marketing muscle, Green argues. "People have come to accept ads on a Web page, but we weren't absolutely sure they'd accept ads in software they're using for real work," he says. In fact, GifWorks looks very much like a traditional Windows productivity application rather than a Web page; it's essentially a remote server-based program with a "thin" client interface.

Since Andover.net can track virtually every mouse-click GifWorks generates, Green adds, he knows that users typically spend a good deal of time with the program--upwards of 30 pageviews per visitor. In turn, that deeper involvement ("stickiness" in Web-talk) lets advertisers deliver a more sustained message, says Green. "Most people come to a site, see two or three pages, and leave. With a product like GifWorks, people come every day and they hang around. The click- through percentage isn't as strong as we get elsewhere on the site, but we deliver a deeper branding opportunity."

Green also notes that delivering ad-supported software on the Web eliminates much of the overhead of conventional software publishing. "We have no distribution costs, we get maybe two or three e-mails a day for support, and the whole concept of piracy goes away." It's also easy to monitor which parts of the program get the most use and to add new features incrementally. Green says it's even possible that a network of third-party plug-in developers might emerge who could share in the ad dollars their plug-ins produce. "We don't want to be a publisher in the classic sense, but we could still be a channel for other peoples' products," Green says.

Adam Green, chief technical officer, Andover.net, 532 Great Rd., Acton, Mass. 01720; 978/635-5300. E-mail: [e-mail].