Coming Soon to Your Desktop at Work: Ads

There has long been a divide between business and consumer software: Companies mostly buy licenses to use applications, while consumers often pay nothing and advertisers shell out money to reach them. Several startups have begun tearing down that divide by offering ad-supported business software. Rather than charging thousands of dollars for multiyear licenses and maintenance fees, these companies give away programs that manage medical records, monitor information technology networks, track revenue, and more. Such sites become “communities for practitioners, and that’s very valuable for anybody selling to them,” says Jeremiah Owyang, an analyst at Altimeter Group in San Mateo, Calif.

To reach such specialized audiences, companies are willing to pay far more than they do for ads on consumer sites. Practice Fusion, a seven-year-old San Francisco company that offers a free electronic medical records system used by 150,000 physicians and clinics, charges drug companies as much as $200 per thousand impressions—effectively page views—to reach medical pros. Sites such as Yahoo! and Facebook charge less than $10. It’s “about influencing the behavior of really important, valuable decision-makers,” says Zach Gursky, a former Yahoo executive and 20-year veteran of the advertising industry who oversees ad sales at Practice Fusion.