Ex-Modestan finding success through Twitter promotions

Growing up in south Modesto, Derek Rey ran lemonade stands, washed cars and mowed lawns. He liked being his own boss, even as a kid.

"I always thought of myself as an entrepreneur," Rey said.

The 28-year-old's latest business venture, as co-founder and president of Adly Inc., has him working 80 hours per week to promote advertising opportunities via Twitter messages.

"I split my time between New York and Beverly Hills, where our office is, but I try to visit home about once a month," said Rey, whose parents now live in Turlock. "I'm very proud to be from the valley, and the lessons I learned growing up in the Modesto area help me tremendously in everyday decision making."

Rey's high-tech life is different from his days at Ceres High School (Class of '99) or California State University, Stanislaus (bachelor's degree in business marketing, 2004).

What his business does is difficult for many to grasp: Adly Inc. runs Ad.ly, which is monetizing Twitter by arranging for businesses to pay people to post tweets that promote their products.

Twitter is a free social networking site that enables people to send and read messages known as tweets. Tweets are limited to 140 characters, and they are sent to friends, fans and other "followers" through cell phones and computers.

Some Twitter "publishers" have millions of followers, such as reality TV star and socialite Kim Kardashian, whose 10 or so daily tweets are read by 2.7 million people.

Rey's company has a deal with Kardashian enabling businesses to pay her $10,000 per tweet to promote their products.

"A small handful of advertising campaigns are with Kim," Rey said. Many of his other clients (who cost less) are more popular with advertisers, he said.

Lauren Conrad, from MTV's "The Hills," gets paid "several thousand dollars ... maybe once a week" by Ad.ly for promotional tweets, Rey said.

Other Hollywood celebrities Rey has hooked up with advertisers include George Lopez, David Spade, Brooke Burke and Joe McHale. Rey said influential business and technology people who tweet, such as technology journalist Leo Laporte, are becoming popular with advertisers.

Ad.ly launched in September, backed by a little less than $1 million in funding from GRP Partners. That venture capitalist partnership previously backed Starbucks, Costco and Jamba Juice.

"We think this is a tremendous market, and there's demand for what we're doing," said Rey, who runs the sales and media end of the business. "We're growing really fast. We have over 50 advertisers, including Sony Pictures, Microsoft, NBC, Universal Pictures, Ralph Lauren and Nestlé."

Rey said about 19,000 Twitter publishers have registered to accept Ad.ly advertising, "and we've probably placed ads on 15 to 20 percent of them."

Most of those sponsored tweets, of course, earned their publishers far less than what big-name celebrities command.

"We strive to make the ads high quality ... and we limit each publisher to one sponsored tweet per day," Rey explained.

He is pleased that after just five months in business, Ad.ly has strong revenue and is "very close" to turning a profit.

That's more than Rey could say about some of the other businesses he founded.

"I started about five companies that failed," Rey admitted. "But in business, you only have to be right once to succeed."

Like most entrepreneurs, Rey is an optimist and not shy about self-promotion.

Before he graduated from CSU, Stanislaus, Rey entered a Bee competition that was a miniversion of Donald Trump's "The Apprentice." Modesto entrepreneur and multimillionaire Dan Costa took on Trump's role, and Rey and two others competed to be his apprentice.