Smart entrepreneurs continue to find creative new ways to use the internet to create catalysts – to facilitate value-creating interactions among distinct customer groups and to profit by appropriating some of the value they create. (Social-creature has some interesting recent thoughts on this.) The latest interesting new model I’ve seen is the Gay Ad Network. The Network is a new B-to-B operation serving national advertisers, on the one hand, and media that serve the gay community, on the other. At least some national advertisers would like to tailor ads to the gay community, but that audience has become fragmented among a large number of information, news, community, and social networking sites, and the transactions costs of placing a single ad in many small publications are formidable. On the other hand, the media serving the gay community, like all media, would love to have revenue from national advertising, but they are generally too small to go after those advertisers. The Gay Ad Network’s plan is to sell ads for many publishers at once to national advertisers, thus reducing transactions costs and adding value by bringing those two groups together.

Sounds like an interesting idea, but it also raises some interesting questions. Some national advertisers probably want some but not all of the media in the Network, particularly if their audiences overlap. Is it hard or or easy for the Network to offer choice? If it doesn’t offer choice, will advertisers accept an all-or-nothing deal? If it does offer choice, how will publishers react not being chosen? What about competition? If the Gay Ad Network is successful, are there any barriers to competitive entry? Will the Network require publications to sign exclusive contracts? Should it? If you were a publisher hungry for national advertising, would you sign? Suppose you thought competition was likely? If the Network is successful, can anything but exclusive contracts prevent competitive entry? It would seem that publications would want to join as many networks like this as they can, particularly if there is no up-front fee, while advertisers would like to shop among several networks.

Will this new catalyst venture succeed? Will it be imitated? Are there other marketplaces in which this sort of aggregator catalyst could profitably add value? I’d be interested in your thoughts.