Ukrainian Banner Network — ‘whats’ and ‘hows’ (Part 1)

This article was written in 2009. It is published with some minor corrections.

In 2009, I suddenly realized that it’s already 10 years passed since the establishment of the Ukrainian Banner Network. This period may seem considerably long to some of us, but for the Internet resource it can be even called as impressive. During this time, many new features had appeared: resources, people, technology. And lots of things had gone outdated. Sometimes I have to retell about how it all began. And I catch myself thinking that every year some details are gone missing from my memory. This story is my memory screenshot, which might be interesting, informative or even instructive for someone.

It all began quite trite – with a desire to do something big, interesting and needed. I met my partner Alexey Mas a long time ago: we’d been studying together at university, before working for a while in State Scientific-Research Institute for Automation Systems in Construction (NDIASB) in the same department. In 1998, I worked as an engineer for the Internet provider company  “Lucky Net”, and Alex – as an administrator in the National Bank of Ukraine. Six months before the beginning of the project Alex asked me to help him with posting on the site of the studio of fiction (http://fiction.kiev.ua), which he was overseeing. Probably, it’s all started from this moment. I was in charge of the system part: UNIX, web-server, DNS. Alex also figured out with HTML, CGI and other web-mastering things.

First of all, we began to discuss the project of a search engine. Why should it be exactly a search engine? It’s because there were no sensible search engines at that time, and one often begins working on the Internet with a search engine. During the month of discussion we came to the following conclusion: the search engine needs lots of hardware capacity, Internet traffic and disk space. Well, all of this, of course, is worth the money. Big money. The Alexey’s idea to make a banner system appeared during the discussions. Alex has already tried the banner networks on the site of the studio of fiction, so he knew what he was talking about. In comparison with the search engine, everything seemed much simpler. In Ukraine the biggest banner system was the Ping banner system. Also there was Russian RLE implemented in Ukrainian resources. But this niche of banner networks could be considered as almost free one. The “chip” of the system was meant that only “Ukrainian” sites were accepted for listing: websites from Ukraine or about Ukraine.

The first server of the banner system was launched from my personal computer, brought to the node of “Lucky Net”. It also was my workplace at the same time. I installed FreeBSD on it, registered domain “banner.kiev.ua”, and the work started. Within three months, the first version of the system was finished. Design consisted of a pile of tablets on an orange background, all the software was written on the heavyweight Perl, but at the time the launching did not bother anyone. We did something interesting and were ready to show it to everyone.

The start was successful. We should commend Alex – during the first week he sent dozens of personal letters to the owners of resources. The idea of ​​free exchange was picked up by a bang, and the system had spun. We had spun too, because the software was raw, the number of banner ads was increasing constantly, and also we wanted to add some new features.

For our successful start I also would like to thank Oleg Baranovsky and his uazone.net. At the beginning, the entering of a large resource into the banner system was threatened with a skew. Oleg’s entry into the system and the consent to suffer the accumulation of banner debt helped us to avoid this danger.

And, of course, thanks a bunch to “Lucky Net”. The fact is that at that time the Internet cost more than it presently does. To pay for a resource generating so much traffic as a banner system, we would not have enough money.

And, by the way, let’s mention about money. Initially, there wasn’t the commercial scheme in our priority, and the question of earnings was somewhere in the background. However, several months passed, and the first calls of those who were interested in buying advertising appeared. This fact was quite inspiring.

The system had been growing rapidly. On the one hand, it was a success, but on the other hand, there were some technical and organizational problems there. More sites, more banners, more time to spend on communicating with users, checking banners and websites. At the beginning, we ran it ourselves, then it became evident that we need a helping hand. In addition, we needed a room, a computer and the Internet – a workplace for system administrators. And again, friends helped us out. Working on “Lucky Net” I met Yuri Safronenko who has a nickname Travel. At that time he had an office on the Bohdan Khmelnytsky Street. We both agreed that we will put the workplace in his office. I brought a desk from my home, and invited Oleg Gerasimenko, my friend and neighbor, to work as an administrator. The second administrator and part-time programmer became our former colleague in NDIASB, Lavrenty Novitsky. Later, Larissa Mas – Alex’s wife – joined the administrator’s work. Since there was no income from the system at that time, I had to pay salaries out from my own pocket, or rather to give away part of my salary…

Almost a year had passed. The network was entering more and more resources. We were on the wave. Journalists started to write about the system and invite us to interview. And it led to some results. After the publication in a sensible article on the banner system in the KyivPost newspaper, I was invited to talk with the managers of the investment company SigmaBleyzer. Communication was quite amusing. Our conversation quickly turned into something like this:

“They: We have much money. We want to invest millions.

Me: And what’s the point in your millions? The number of the Internet users in Ukraine is quite small. So even having spent a lot of money, you are not getting a sustainable profit…”

At that time, I did not particularly understand all the investment scenarios, so I just said what I thought on the case…

During the next few years, I’d seen a few examples of investors’ thoughtless actions. They were following the next pattern. There was a small promising project or just an idea. An investor appeared with money and gave them to rent an office in the city center and hire a crowd of employees with a decent salary. And then a rough activity began. The cost part of the company was not calculated from real needs and prospects. For people it was necessary to spend the investor’s money. By itself, business did not allow to receive a return of the money spent because of the weak development of the Internet in Ukraine. The company swelled as a bubble, and then burst, when the investor began to demand financial indicators. We had to feel the results of such bursting on our own skin. Here you can read about several of the largest examples: http://korrespondent.net/tech/technews/572750.

At the end of 1999, we got other problems. The banner system was our personal project, but also it was tied to “LuckyNet”. The server was located in the “LuckyNet” area, and I was an employee of this company. The management of the company was more interested in channels, equipment and servers, but not in the Internet content. Although in 99th, the company “Lucky Net” with the direct participation of the Ukrainian Banner Network published the first issue of the Yellow Pages of the Internet. But it’s another story.

There were big changes in the management of the “Lucky Net”. A serious conflict arose between President Sergei Gulchuk and the owner of the company. As a result, Arthur Gabovich was reelected as a new president. The relationships in the company also changed. Most of the veteran employees supported the old leader, many of them even switched to other companies. I was offered the position of the web-department head, and suggested to relaunch the banner system as “LuckyNet” project. I refused the offer and, to formalize my copyrights, quickly received an author’s certificate for the system and filed an application for trademark registration.

The system had been growing. We changed the server of the system to the more powerful one, improved software. Eventually, Alexey and I separated the responsibilities. I went further into the technical and software part of the system, trying to squeeze out the maximum performance on the existing hardware. Alex was engaged in promoting the system, communicating with advertisers and resource owners. In early 2000, he was approached by Alexander Soroka (IPTelecom) with a proposal to create a joint web-project. In this project, Soroka and his companions participated financially, we, as an advertising system, provided banner shows for the promotion of the project. As a result, UaPortal appeared. Alexei took a new idea with a great interest, left the work in the National Bank and became the director and leader of UaPortal. Well, the banner system management came into my responsibilities.

In April 2000, we took part in our first exhibition, which took place in the Ukrainian house and was called “Telecom and Internet 2000”. A curious situation happened there. In order to participate in the exhibition, I took a vacation at my main job. However, workload of our system increased, and I also wanted to withdraw into my own business. In June 2000, I retired from “LuckyNet”.

At that time, we realized that in order to develop our project, it is necessary to harness adjacent business areas. At the same period, we negotiated the creation of an online advertising agency. Tatyana Popova turned out to be the most compliant and easygoing partner. She was a director of the advertising agency “Media Expert” at that time. We quickly stipulated the terms, found employees and rented a room. In August 2000, the advertising agency “Internet Expert” founded by Popova, Mas and me appeared. According to our agreements, the agency had exclusive rights to sell banner advertising. Our office was located on Gorky Street, 5. So it was the first office of the Ukrainian Banner Network.

Business was going well – new advertisers appeared both for banner advertising, and for other advertising services. It was a relatively quiet time. The problems were mostly connected to technical issues. By the way, it is worth writing about. The server from the “LuckyNet” moved to the site of the new Internet provider “ColoCall”. This resulted into the server maintenance expenses rise. Although the sum was smaller than we would have to pay according to the tariffs of that time. Since that moment, the struggle for traffic, which lasted several years, began. The banner system that gives out millions of banners a day generates many gigabytes of traffic. Even considering the fact that we paid only for foreign traffic, the amount turned out rather big (for those days, 1GB cost about $ 100). Eventually, it turned out that if we do not change the business system, the cost of the server hosting will be more than the money we receive for advertising.

Firstly, the simplest solution was to post banners’ pictures on foreign hosting. But in this case, it turned out to be very expensive. The matter is that the display of the banner counts as two requests to the server of the system. The first one is a request for a link to advertisement, and the second is the advertisement itself (the banner image). These small inquiries of the first step turned into a large amount…

At the last, we took another decision – to spread the banner system geographically. The server was installed abroad, and the domain name system was set up in such way that “banner.kiev.ua” had a Ukrainian IP address for Ukrainian users, but all other Internet users were on a foreign server. I even had to create my own domain name server, called SmartNs, which implemented the division over IP. After some time, we switched to the common software, which had similar capabilities.

Why am I telling all these things about? The fact is that lots of processes often remain behind the scenes. Moreover, the process that seems nothing but a simple mouse click and a moment before your search results pop up, takes many hours of search and implementation of the solution for developers.

In addition, we had been always looking for the best conditions for hosting the server. For a couple of years the server of the banner system was on the technical platforms of such providers as Colocall, Golden Telecom, DG, Wnet… The development of the system cannot be called easy, because most of the time we were spending to solve technical and financial problems.

In 2001, there was another important occasion in the system life: we got a new programmer, Ivan Savchenko aka bymer. Through my experience of working in the IT field, I seldom met such talented and competent developers. Gradually, Ivan had rewritten the system software details as the user interface, web-server system, data synchronization system.

And I began to move away from solving software issues of the system. Also I had new ideas that required time to think, implement and promote. Well, honestly, I got tired of working with the technical part of the banner system, and new ideas carried me away.

In 2003, another important occasion had happened. It allowed us to feel much more stable and confident – we bought our own office. The rent for an office was a rather much for us, and these money were actually wasted. Tanya Popova, our partner in Internet Expert, suggested a simple decision. We get a room on credit and pay the same money for it as for the rented office, but in this way we will own the room finally.

At that stage, it was all about finding the money for the first installment and repair, as well as negotiating with the bank on the room. For a couple of months we ran around our friends with asking them to lend us some money. We had a certain amount of cash, which still was not enough for the market offers. But we were lucky to find an apartment for sale in the area we needed, and for the money we had.

 

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