CleverSet knows its online shoppers

What: CleverSet Smart Products Recommendations, based in Seattle

Who: Todd Humphrey, CEO

Employees: 17 full time

Power of suggestion: CleverSet predicts what online shoppers are looking for and recommends products they might want to check out. While many Web sites can draw in traffic, "we really close the loop by converting those visitors into paying customers," Humphrey said.

What's so clever? Using algorithms to factor in every mouse click, time spent viewing a page and previous pages or products viewed, CleverSet figures out what a customer is most likely to buy. The Web-based service can be applied to retail Web sites, taking between a half hour to a few days to take effect.

Virtual salesperson: CleverSet differs from services like Amazon.com in that recommendations are not based on shopping history alone but on various pieces of the consumer's behavior. Humphrey said the service is like "an experienced, knowledgeable in-store salesperson."

Satellites to shoppers: Founded by statistics expert Bruce D'Ambrosio, professor emeritus at Oregon State University, the technology was developed under a grant from the National Science Foundation to track the behavior of satellites. D'Ambrosio approached Humphrey, who came onboard in 2005 to help turn the technology into a commercial service.

Results: CleverSet is used by 65 online retailers. During the holiday season, its service helped increase per-user revenue by 10 to 20 percent among its clients, CleverSet said. As a company, it saw its first revenue in the third quarter of 2006.

Funding: CleverSet announced last week it raised $2 million from Seattle angel investors and Silicon-Valley venture-capital firm Ridgewood. That brings the total raised so far to $3.8 million.

Going further: Humphrey said the technology could be applied to online advertising, mobile searches and lead generation.

Feeling tempted: The last time Humphrey went online to buy a $15 bottle of Merlot, he admitted he also picked up a $25 of chardonnay -- a CleverSet recommendation.

-- Christina Siderius