Archive for the ‘Social’ tag
YouTube turns eight years old today, reminding each of us in some odd way how young or old we really are. Remember, the company launched back in 2005, the same year that Michael Jackson was found not guilty of child molestation, and Lance Armstrong was winning his seventh Tours De France, and Arrested Development was still on the air.
A lot has changed since then, but YouTube’s growth remains strong as ever. YouTube announced that its community now uploads more than 100 hours of video to the platform every minute. Minute. That’s the equivalent of four days worth of video every sixty seconds.
But of course, the supply makes sense when you consider the demand. YouTube claims that more than one billion people across the world come to YouTube for content each month, which comes out to nearly one in every two people who have access to the internet.
Here’s a little perspective on growth: Two years ago, YouTube revealed that users were uploading 48 hours of video each minute, and last year it had grown to 72 hours. Eight years in, YouTube is still a growing platform, while Facebook may be slipping amongst younger and fresher social niche applications.
Meanwhile, YouTube opens up new possibilities for startups who want to leverage its massive, active user base and content library. Telecast, in particular, comes to mind, as the betaworks company helps makes all those billions of videos discoverable and curated on mobile devices.
Here’s what YouTube had to say about it, in the official blog post:
And so, on our eighth birthday, we’d like to thank you for making YouTube the special place that it is. For showing us how video can create connections, transcend borders and make a difference. For clicking these links even if you aren’t sure what they’ll be, but you trust us. In short, thanks for making us better in big ways and small ones, too. We can’t wait to see what you come up with next.
We’ve all by now heard about how Yahoo is trying to get some “cool” with a supposed $1 billion purchase of hip blogging platform Tumblr, but it may be a moot point if Tumblr’s users fail to stick around post-sale.
Microsoft and Facebook may be trying to make a move ahead of Yahoo, Tumblr may be inching ever closer to running out of cash, and (despite that) may not be afraid to play a little hardball. But here’s something you’re not hearing much about: Tumblr’s users are almost universally unhappy with the news that the site might get sold to Yahoo. And they may let their fingers do the talking, and the walking.
Do a search on Tumblr for “yahoo” and you get a stream of distress, interspersed with the occasional bit of helpless resignation, and some calls for activism. The voices of reluctant acceptance (usually because of the aforementioned cash situation) or anything like positivity are few and far between. No outright enthusiasm.
(Daddy!) See for yourself.
It’s a problem that extends to some of Tumblr’s oldest users.
“If Tumblr goes to Yahoo, I will seriously consider moving my personal blog to Medium, if that’s possible,” Alexia, co-editor over here at TC, told me. She’s had a blog on Tumblr since June 2009, and, while not part of that coveted 18-24 age bracket, is a significant representative of that other cadre of important users: digital influencers. “I don’t know exactly why, but my Tumblr is a part of my identity. And for whatever reason, I don’t want to identify with Yahoo.”
User attrition is not something to be dismissed, especially when it appears to be underpinned by wider usage trends on the site.
When I wrote a post in January about what might come next for Tumblr as a business (it focused on how it could make money; not how it might need to get sold because it doesn’t), I noted that in the prior month, December 2012, it had 167 million visitors and nearly 18 billion pageviews worldwide (Quantcast figures). The trend over the last six months are down, however: in the U.S. page views are down 21% to 5.3 billion, and uniques down 5% to 76 million. Worldwide the picture is better but still not growing: pageviews are down by 4%; uniques are down by 3%.
Not a sinking ship, but not a zippy little speedboat, either. Yahoo’s MySpace, indeed.
Image via Tumblr
How Hike, India’s Fast Growing Mobile Messaging App, Is Banking On SMS & Local Diversity To Beat The Big Boys
It’s still practically a newborn but Indian mobile messaging app Hike is already channelling almost a billion messages a month between its five million registered users. Those numbers sound insignificant when you stack them up against the big beasts of the messaging space – WhatsApp claims 200 million+ monthly active users, and some 600 billion in and outbound messages – but Hike’s growth is impressive when you consider it’s only just over four months old. WhatsApp, of course, has been around for almost four years.
Mobile messaging is hot property right now, with tech giants like Facebook and most recently Google bent on owning the messaging space. The reason for all this interest in cross-platform chit-chat is that mobile messaging looks poised to steal social networking’s crown jewels: aka the cool factor, and thus the user engagement (Hike incorporates social status updates and emoji-based moods into its messaging app, to hang on the social chain). But the idea that there can be one ultimate mobile messaging winner — or one player as dominant as Facebook in the full-fat social networking space — seems unlikely. And that’s what Hike is banking on to disrupt WhatsApp and keep Facebook Messenger and its ilk from crashing its just-getting-started party.
There’s no doubt that local market realities intercede much more on mobile than on the traditional social networking playground of the desktop, especially in emerging markets where device, network and carrier variations influence how people communicate based on how they can afford to communicate. Those complexities provide an opportunity for local app makers to triumph over goliath outsiders if they build fixes for the local market, argues Hike.
“Given how competitive this market is we do feel that in about 3 or 5 years from now you will have somewhere between three to five players globally that own parts of the messaging space in the world. You’re already seeing it right now, you have Line in Japan, you have Kakao in Korea, you have WeChat in China, you have WhatsApp in South America and Europe, you have of course Facebook message or iMessage dominating in U.S. and WhatsApp growing there too. In India of course WhatsApp is the dominant player but we’ve come on to be a very strong number two in just four months,” says Hike creator Kavin Mittal.
“We can see that with communication if you solve local problems in the market there is room for a local player to win the market completely.”
Hike is one of the latest contenders to jump into the mobile messaging space, albeit with a few neat tricks up its sleeve that it’s confident will allow it to grab significant share in its chosen markets — namely India, and other similar emerging markets in place like Indonesia, the Middle East and Africa. Some 60% of Hike’s registered users are in India, 40% globally led by the Middle East and Germany (despite its emerging markets focus, Germany was actually the first market to spike an interest in Hike — which its creator puts down to it having 128bit encryption over Wi-Fi and Germans looking for a “much more secure solution to WhatsApp”).
On the neat tricks front, Hike has baked a patent-pending SMS conversion tool into its app to take advantage of fragmentation in the Indian market caused by low distribution of data-capable smartphones. So this is not just about incorporating SMS messages into a unified app — as Google plans to with its Hangouts app – but about making sure a data message can still reach someone who doesn’t have data, via the SMS channel.
Mittal explains that in India, even where people own smartphones they may not have data enabled, or may sporadically turn data off to save money. SMS is therefore still a key comms channel that needed to be brought into the loop. This fragmentation was the problem the app’s creators were setting out to solve with Hike. They have also done this in as low cost a way as possible by building a system that ensures it does not send cross-network SMSes (which incur a termination fee in India) but routes same network to same network.
“The idea behind Hike… is it works free globally. Hike is available on iPhone, Windows, Android S40, S60, very soon BlackBerry now as well. But in case you don’t have a phone than can install Hike, or let’s say you have a phone but you don’t have data, I can still message you from Hike for free. We convert the IP message into an SMS and it’s free for me as a Hike user, to which you can reply back to – and the reply comes back straight to my inbox making messaging very seamless. So I have one app for all my friends,” Mittal tells TechCrunch.
Another future trick — due to launch on June 10 — is something that will allow users who have turned off their data to still be notified that they have a message waiting for them, presumably so they know to turn data back on. “At this point in the market there’s no way to notify you when you have a message waiting on one of these applications. So we’re launching something on June 10th that’s going to solve this problem, so no matter where you are – no matter if you’re online or offline – you’ll be able to communicate via Hike with your friend all the time,” he adds.
Hike is funding the conversion cost of sending the SMSes itself — in the Indian market, with a view to extending it to other emerging markets with similar dynamics — so that is one of its largest sunk costs at the moment, according to Mittal. But its monetisation strategy is based on building off that base in another way. The shift Hike’s creators are ultimately calculating on is the movement of consumer spending in its target emerging markets away from carrier ‘value add services’ — paid for infotainment SMSes and so on — to data-based content and entertainment.
That’s where Hike sees its future profits, by fleshing out its messaging offering to supplement the bread and butter of social comms with “content that’s very relevant to the local market” – much as the Line messaging app is already doing with entertainment content such as stickers and games.
“India is a country of 20 countries. There’s so much diversity, cultural differences, dialects, languages that one has to cater to and given that this is a big entertainment market there is no doubt we’re going to go down the route of enriching messaging around content,” he says. “If you look at why you message it’s around a piece of content, topic, video, something new you’ve found, something funny. And India it’s much more prevalent than other markets so we’re definitely going down that route, there’s no doubt about it.”
Hike is also looking to work with carriers to share some of the SMS conversion cost, with the benefit for carriers being that Hike is acting as an IP pusher, turning mobile owners into data drivers — and data is ultimately where carriers in these emerging will be making their future revenues from too.
“Given the traction we’ve had in the Indian market we’ve seen a lot of interest from the operators who want to work closely with Hike and figure out how to expand and grow the traction with Hike because what we’re doing for the operators is we’re introducing a lot of people to data,” says Mittal. “What one can also do over SMS is send photos, videos and so forth, so if I’m on Hike and do SMS I can send you a picture and you get a link on SMS so you can open it on a browser, so we’re striking deals in the Indian market and the emerging markets like Middle East and Africa where the cost is not only bourn by us but by the operator too.”
Hike is starting out with more resources than most startups, being created by BSB, a 50:50 Bharti Softbank joint venture, that acts as a “quasi-strategic incubator”, as Mittal puts it. Bharti Softbank invested $7 million into Hike about a month ago — a measure of how much traction the app had managed to achieve in a few short months. BSB projects get their first round funded by the parent companies if they achieve enough traction.
Going forward, Hike will likely look outside for funding, says Mittal — assuming it can keep on growing, and reach its goal of at least 10 million registered users (“our internal critical number”), which it views as the baseline required before starting to think seriously about monetisation.
“By the end of the year we’ll be in a positon to raise money from the external market. The reason we’re doing that is the VC market in India has less of an appetite for taking massive risk. Because one of the first questions to ask is ‘hey guys why are you building another messaging app?’ And we were pretty certain that if we did what we did we’d get the traction and so far we’ve proved it,” says Mittal. “We’re in a point where we have the $7 million but we will look outside, even possibly the West Coast for funding.”
Mittal won’t put a figure on Hike’s active user base but says it’s “amongst the highest we’ve seen in the industry and definitely way above 50%”. ”We feel there is a room for a local player to dominate markets like India, Africa and China and so forth, and take care of the local needs, and that is something we’re working on. That’s the big philosophy we have at BSB,” he adds.
India’s technology-adoption stratification poses a huge challenge when you’re trying to build an app that lets people talk to whoever they want. A challenge that, ultimately, gives the local kid a toehold over global mobile messaging players, argues Hike.
“The market kind of splits India into three sort of broad demographics, the top part really mimics the U.S. population — 30, 40 million people – they’re really switched on, they know about the Internet, they have smartphones and so on and so forth; there are about 150 million people that are experimenting with the Internet, but they have a lot of churn there because the Internet is still not a utility for these guys; and then you have a billion people at the bottom of the pyramid that have no clue whatsoever the Internet even is,” says Mittal.
“As you go further down in India, how do you tackle the one billion people? No one knows but we’re in India here, so we’re the guys to figure it out.”
The popular and fast-growing blog service is mulling a $1.1 billion acquisition offer from Yahoo. But while the massive blogging powerhouse only pulled in $13 million in revenue in 2012, and raised $125 million at a lower $800 million valuation, Tumblr CEO David Karp feels $1.1 billion is too little.
I guess it depends what yardstick you use.
If you look at an Instagram-style deal, which was originally around a billion dollars but eventually, due to Facebook’s stock market woes, came in a little lower, he might be right. But that deal had one thing going for it that Tumblr does not.
Instagram chief executive and co-founder Kevin Systrom had multiple suitors, while Tumblr only has one.
That’s because, as Forbes reveals, Yahoo is currently negotiating under a lockup. So even though Facebook, Microsoft, and potentially other acquirers are interested, Yahoo has at least a period of time in which it is the only one on the dance card.
In addition Tumblr, which famously hates advertising and only started trying to make money after five years in existence, is in a bit of a pickle, as its $125 million in funding is running out, giving the service only a few-month window in which to raise a new round or find a sugar daddy.
That’s likely a strategic error on Karp’s part, who has said that advertising “really turns our stomachs.”
Tumblr only started to get serious about ad revenue in mid-2012, and is only planning to roll out its third major ad product — pay per view, in which you pay to get others to view — sometime later this year. Being more aggressive on monetization would have given Tumblr more runway to make a leisurely decision about an acquisition, or made the company more attractive to investors if it tried to raise another funding round.
There’s no question, however, that Tumblr is a traffic powerhouse. It ranks ninth on the list of most-popular U.S sites, and with 217 million global monthly unique visitors and 74 million million posts each and every day, the site is both huge and fast-growing. Few companies could monetize its 108 million blogs, 51 billion posts, and 16 billion monthly pageviews as well as Yahoo.
So while Yahoo is likely to come up a little, Karp could pick worse partners. And he might do well to finalize a deal sooner rather than later.
Today, thanks to the maturation of the web, digital tech, and smartphones now in seemingly every pocket, startups are finding it easier than ever before to build scalable solutions to finally address the many inefficiencies in our food manufacturing, production and distribution systems.
As interest in food tech balloons, one area in particular appears to already be at the tipping point: Online and mobile food delivery. Over the last few days, we’ve hearing about a merger between two of the largest companies in the space. Rumor has it that “arch rivals” GrubHub and Seamless are in talks which could see them join forces as part of a merger. While our sources tell us that the talks are serious, the terms of the merger are not yet clear and, of course, any potential deal could fall through.
Furthermore, it’s not yet clear what kind of synergies would take place, how management of the new entity would be structured or even what the new business will be called. The two companies would not confirm on the record on any of the above. But as far as the name goes, we’re hoping for Grubless. Or Hubless GrubSeam. But they have a nice ring to them, don’t they?
If these rumors are true, the merger comes at a good time for the arch rivals, who have been seeing mounting competition of late from a laundry list of new startups entering the space, including increasingly popular alternatives like Delivery.com, ChowNow, Munchery (meals from local chefs), Campus Special, eat24 or the bigs of Europe, like Food Hero and Just-Eat.
If the online food-ordering and delivery market is roughly where daily deals were three-plus years ago, then the deal essentially creates the Groupon of food delivery. Like the daily deals market, food ordering has traditionally had a fairly low barrier to entry, which helps explain why we seem to see a new startup pop up every week.
Plus, the business model isn’t particularly complicated, making it replicable. That being said, innovation and tech adoption have been slow to come to the food industry, and, at scale, this model (taking a slice of transactions) has the potential to be able to generate a lot of cash.
This is just one part of why the “food tech” business has been so hot lately. Just ask venture capitalists who collectively poured $350 million into food startups over the last year. (Compare that to 2008, when it was less than $50 million.) Plus, when you get right down to it: People need to eat. And, as it turns out, people are pretty busy. Uh, and lazy.
Of course, for those who remember the spectacular failure of online food companies like Webvan, Kozmo and HomeRuns, this whole “tech in your kitchen” and online ordering jibber-jabber probably sounds familiar — and not in a good way. But this time it’s different. Research from Cornell University recently found, for example, that over 40 percent of adults in the U.S. have ordered food online, and 10 percent of restaurant orders now originate online — and these numbers continue to head north. GrubHub and Seamless have built successful businesses on this very idea.
Both GrubHub and Seamless have been around for some time: The New York City-based Seamless was founded in 1999, while the Chicago-based GrubHub got its start in 2004. And for the most part, the two companies have catered to two different markets geographically. While both now have fairly expansive coverage, GrubHub has naturally developed a firm foothold in the Midwest, while Seamless focused its early attention on NYC, before moving into cities like Los Angeles and San Francisco. From that perspective, a merger would make sense, allowing the new, consolidated entity to gain penetration into markets where they lacked a major presence.
Writ large, the companies, while having some fundamental differences, do seem to have a lot of synergies on paper — at least “nominally,” depending on who you ask — likely why they’ve increasingly become rivals over the years. Bboth are of fairly comparable size, as GrubHub has more than 18,000 restaurant partners across more than 500 cities, while Seamless has over 12,000 restaurants and serves nearly 5,000 businesses and more than 2 million users. As of February, Reuters reported that Seamless was on track to generate more than $100 million in revenue this year as it expands into new cities and focuses more aggressively on mobile.
The company reportedly generated $85 million in revenue last year, growing its consumer business by 60 percent year-over-year and “will soon be processing $1 billion worth of food orders a year,” Seamless CEO Jonathan Zabusky told Reuters at the time. For the majority of its history, the company focused primarily on New York, but launched a major expansion effort last year, bringing its service to 10 new cities. According to the report, Seamless saw its transaction volume quadruple in Los Angeles during 2012, with transactions tripling in San Francisco.
Another interesting point to note: GrubHub was reported to be considering an IPO last fall. The company denied the rumors at the time, and if this merger is true, then they’ve been given the proper perspective. Certainly, it would seem that this wouldn’t take a potential IPO off the table, instead, likely making an opening price that much higher.
The IPO rumors for GrubHub came at a time when the company was reportedly doing about $60 million in revenue (this was in 2012) — a little less than half that of Seamless. Furthermore, Crain’s reported in December that GrubHub’s revenue has been doubling every year and, as the company reported $30 million in revenue in 2011, that revenue estimate would make sense and put the company on the path to crossing $100 million well before the end of this year.
That is all to say that, although the terms of the potential deal are unclear, these are two sizable businesses that are growing relatively fast, so any potential valuation has got to be fairly high. After all: The two companies were fairly comparably capitalized and staffed, with GrubHub growing to over 250 employees and Seamless over 300, while GrubHub raised about $84 million from a mix of venture and growth equity firms (including Benchmark) and Seamless raised $51 million, $50 million of which came from private equity firm Spectrum Equity.
While both companies have made a couple of acquisitions, this would be the second big M&A deal for Seamless, as the company was acquired by food services giant, ARAMARK, in 2006. Five years later, Spectrum bought a minority stake in Seamless from ARAMARK, and about a year later, the food services company spun-off its remaining interest in Seamless to its shareholders. Free from its corporate ownership, Seamless proceeded to go out and buy MenuPages for $15 million, showing up GrubHub, which MenuPages had initially targeted as its acquirer. When GrubHub and MenuPages couldn’t agree to a deal, and it seems that GrubHub was instead in the process of buying Dotmenu/Allmenus, Seamless swooped in — according to BetaBeat.
So, as you can see, the companies have a long history of jostling. While GrubHub had been out acquiring restaurant partners fast and furiously, Seamless stagnated a bit under ARAMARK, but since becoming an independent company (again) and with a new board/investors, the company seems to have been compounding its growth. Together, that growth could be exponentially higher.
Finally, if this deal is in fact a go, it’s worth looking at this quote from GrubHub co-founder and CEO Matt Maloney from back in 2011. In it, he shares his opinion on GrubHub’s top competitor, a little company called Seamless. He told BetaBeat:
I typically don’t talk this much about Seamless because we don’t view them as incredibly strong competition for what we’re doing … Seamless fundamentally is a corporate catering business. They were founded years and years and years ago to do just that. And they’re still best in the business for corporate. They recently got into the consumer and residential pick-up and delivery. And they do it well in New York, but they really have zero business anywhere else. We don’t even consider them competition anywhere other than Manhattan specifically.
So, there you go. A match potentially made in heaven, and one that’s sure to shake up online and mobile food ordering if it happens.
Zynga has apparently told the makers of the dating website CupidWithFriends that they need to change the site’s name, because it allegedly infringes on Zynga’s trademarks.
CupidWithFriends was built by the startup Apartment 7 (which also released the dating apps Flock and Wednesday Night). The site launched a couple of months ago, allowing users to build and edit dating profiles for their friends.
Apartment 7 co-founder Jared Tame just forwarded me a copy of the letter from Zynga’s lawyers. I’ve pasted the full letter at the end of this post, but the gist is that users are likely to think that CupidWithFriends is associated in some way with Zynga (which acquired the developer of the With Friends mobile gaming franchise, a franchise that recently expanded with the launch of Running With Friends). So the social gaming company is demanding that CupidWithFriends change its name by May 24.
Tame said he has “no plans to change the name of the product,” adding,”At the end of the day, we’re busy trying to innovate in the dating space and dealing with Zynga would be a major distraction to us. I think they should be more focused on innovating rather than targeting month-old startups like us.”
I emailed Zynga for confirmation and details, but a spokesperson declined to comment. When I ran a search on the US Patent and Trademark Office’s website (direct links to specific filings don’t seem to be working for me), I did find a trademark filing for “With Friends” in relation to computer game software and entertainment services.
Tame isn’t the only one building an app named using a “with friends” name. There’s also Bang With Friends (which has other problems, as it was recently booted from the Apple App Store) — I asked the company whether it has received a similar letter from Zynga, but it declined to comment.
Here’s the full letter to CupidWithFriends:
Dear Sir or Madam:
We serve as intellectual property counsel to Zynga Inc. (“Zynga”). Among other things, Zynga publishes and owns intellectual property rights in the ‘WITH FRIENDS™ family of social games, which includes Words With Friends®, Chess With Friends®, Scramble With Friends®, Hanging With Friends™, Matching With Friends™, Gems With Friends™ and Games With Friends®, as well as other ‘WITH FRIENDS games in various stages of development (collectively the ‘WITH FRIENDS Family of Trademarks). Each of Zynga’s games using the ‘WITH FRIENDS Family of Trademarks is published and played by millions of users on various social networking portals, including Facebook, Android and iPhone.
Zynga has consistently used and promoted the ‘WITH FRIENDS Family of Trademarks together as a family and, as a result of Zynga’s extensive marketing efforts and commercial success, the ‘WITH FRIENDS Family of Trademarks is strongly identified by consumers with Zynga’s reputation for quality.
It has come to our attention that CupidWithFriends has developed and launched an application called “Cupid With Friends”. CupidWithFriends’ use of the name “Cupid With Friends” for an online application is confusingly similar to the ‘WITH FRIENDS Family of Trademarks owned by Zynga, and users are likely to believe, erroneously, that CupidWithFriends’ application is published, sponsored, endorsed by or associated with Zynga. CupidWithFriends’ use of “Cupid With Friends” also dilutes the distinctiveness of Zynga’s famous ‘WITH FRIENDS Family of Trademarks.
Zynga has invested substantial time and resources in developing and promoting the ‘WITH FRIENDS Family of Trademarks, and it vigorously protects its rights in its marks, both collectively and individually. Zynga hereby demands that CupidWithFriends immediately cease use of the name “Cupid With Friends” in connection with its online application, and refrain from further exploitation of the goodwill that Zynga has developed in its ‘WITH FRIENDS Family of Trademarks.
We anticipate that you will accede to this demand, and ask that CupidWithFriends confirm by Friday, May 24, 2013 that it has ceased use of the name “Cupid With Friends” in connection with its online application. Nothing contained in this letter constitutes an express or implied waiver of any rights, remedies, or defenses of Zynga, all of which are expressly reserved.
Very truly yours,
Dennis L. Wilson
Kilpatrick Townsend & Stockton LLP
Customer service requests are only useful if someone hears (and responds) to them. Nevahold is a startup from Ghana trying to help customers get their voices heard.
Nevahold is a platform where people rally together to get the attention of large companies. Users compose a “shout” and share it with the community to rally support for their cause. Other members of the community can join in the action by sharing on their social media accounts. The ultimate goal is that enough people participate to elicit a response.
“In today’s culture of huge, faceless companies, chances are high that you’ve hit the hair-pulling, mind-numbing, high-pitched-screeching frustration of overpaying for services, buying cheap quality products, being hit with hidden fees, dealing with the worst of customer service skills, or not even getting through to customer service and staying on an endless elevator-music hold cycle,” said cofounder Kena Amoah to VentureBeat. “Nevahold allows consumers to crowd source their social media accounts to harness their power and increase their influence when reaching out to a company.”
Consumers are increasingly turning to social media as a means to express their gripes, grievances, and appreciation for products and services. On the other end, businesses across the board are using social media to connect with consumers and for customer service support. Nevahold’s goal is to give consumers as much efficacy as possible when reaching out to these companies and is based on the principle of “strength in numbers.”
On Nevahold, people send their shout to a company’s social media contact and wait 30 minutes for a response. A shout can include photos, videos, or be a simple comment. If the company is radio silent, then advocates start to retweet an share the shout until the company responds. If the company still doesn’t respond, the question is shared one all of Nevahold’s 12 social media channels.
Nevahold gives each company a customer service score based on their response rates and time. The compare tool helps consumer see how different companies fare side-by-side. There is also a campaign feature that consumers can use to petition for a change in the company’s policy or service.
Amoah said that during beta testing, Nevahold has helped resolve 23,990 questions and complaints in the airline, wireless, and consumer electronics industry and had a 91.5 percent response rate. It recently helped students traveling to a conference stand up against American Airlines and against Barclays U.K.
The three founders met at the Meltwater School of Technology in Ghana. Meltwater Foundation has invested $90,000. Competitors include Gripevine, Gri.pe and Publikdemand.
$FB is still stuck at $26.25, way down from its $38 IPO price, but it’s made important progress since going public a year ago. Daily users up 26%, mobile monthly users up 56%, and revenue up 38% are some highlights. It’s running out of people to sign up in the developed world, but with this growth and no serious competitor in sight, it’s survived its hardest year yet.
- Likes – 4.5 Billion – Up 67% – Average number of likes generated as of May 2013, up from 2.7 billion likes generated daily in August 2012
- Content Items Shared – 4.75 Billion – Up 94% – Average number of content items shared daily as of May 2013, up from 2.45 content items shared daily in August 2012
[Stats and images provided by Facebook]
Likes and sharing are growing faster than Facebook’s user count, indicating strong engagement. This contradicts rumors that people are tuning out of Facebook. Zuckerberg’s Law, the CEO’s Moore’s Law-style theory, states that people will share twice as much every year. Facebook almost made good on Mark’s claim. It’s important that Facebook keeps that number growing as it’s shared content that keeps people visiting Facebook and seeing its ads.
To do that, Facebook is working on the more immersive mobile experience Home which has increased time spent on Facebook by 25% for its small number of active users. More time spent could lead to more sharing. This year it doubled the speed of its massively popular iOS and Android by switching them from HTML5 to native architecture, which lead to longer session times. It added content-specific news feed to boost browsing, and launched Graph Search to pull additional value out its data and get people to contribute more.
It’s also been beefing up its mobile SDKs for iOS and Android to make it easier for apps to share content to Facebook. That’s a big reason Facebook cares about helping its developers grow — they’re scratching each other’s backs.
- Monthly Active Users – 1.11 Billion – up 23% – As of March 2013, up from 901 million MAUs in March 2012
- Daily Active Users – 665 Million – up 26% – On average as of March 2013, up from 526 million DAUs on average in March 2012
- Mobile Monthly Active Users – 751 Million – up 54% – As of March 2013, up from 488 million mobile MAUs in March 2012
- Instagram – 100 Million Monthly Active Users – As of February 2013
Facebook is still signing up people pretty quickly, but all users are not created equal. While it earned $3.50 per user in the U.S. and Canada in Q1 2013, it only made $0.50 per user in much of the developing world including India and Brazil. Those emerging markets are where Facebook is getting most of its growth, meaning each subsequent 100 million users added is worth less than the last.
Growth in mobile has a similar issue. Facebook can show as many as seven ads per page on desktop whereas it has to be more careful not to overwhelm the small screen on mobile. So as Facebook’s users shift their access medium to mobile, it may earn less on each of them. Facebook is hoping that getting developers to pay for mobile news feed ads to get their apps discovered could counteract this, and that market is poised to grow as more businesses launch apps and the developing world switches to smartphones.
Overall, though, Facebook is still growing strong nine years after launch. The network effect of its ubiquity should not be underestimated. Dislodging Facebook as the premier general purpose social network will require something that’s not just better, but much, much better. Competitors might pick away at certain use cases, but are unlikely to replace it as the core identity provider for the web. Considering Facebook’s willingness to buy out threats like Instagram (which is still growing quickly in the first world), could stave off disruption and let it reign for years to come.
- Local Businesses – 16 Million – up 100% – Number of local business pages as of May 2013, up from 8 million in June 2012
- Promoted Posts – 7.5 Million – Number of promoted posts made from June 2012 to May 2013
- Revenue – $1.46 Billion – up 38% – In the first quarter of 2013, up from $1.06 billion in the first quarter of 2012
- Ad Revenue – $1.25 Billion – up 43% – In the first quarter of 2013, up from $872 million in the first quarter of 2012
- Employees – 4,900 – up 38% – As of March 2013, up from 3,539 in March 2012
- Game Payers – 24% more – Increase from March 2012 to March 2013
There’s no doubt about it. Going public made Facebook focus more on making money. It went from nearly zero revenue on mobile to $375 million a quarter, or about 30% of its total ad revenue. That in large part came thanks to the mobile app install ads it launched late last year. These let developers promote their apps in the Facebook news feed with ads that link straight to download pages in the Apple App Store and Google Play. These stores are getting more and more clogged with apps, inspiring developers to pay Facebook to get found.
Facebook also made big headway with Facebook Exchange, its retargeted ads that use people’s browser histories to show them highly relevant ads. FBX is absorbing advertiser budgets set aside for retargeting. Less successful has been Facebook Gifts, its entrance into direct e-commerce. Gifts has failed to produce meaningful revenue and may need to be overhauled to get more users purchasing real-life presents for their friends. Growth in payments revenue has been relatively slow too, as more game developers move from Facebook’s web canvas where it earns 30% to mobile, where Apple and Google get that cut.
One opportunity that should excite investors is that Facebook started showing ads in Graph Search. While they use the standard Facebook targeting now, they’re expected to incorporate keyword targeting, which could make them a more direct competitor to Google’s wildly lucrative AdWords business. The increasing technological savvy of local businesses could be a boon to Facebook in the future. Right now few of them actively buy social ads, but expect revenue to shift towards Facebook and away from less targeted print and telephone book ads in the future.
Still, Facebook isn’t trying to make as much money as it could. Another year went by without TV commercial-style auto-play video ads (though they’re rumored to be getting closer to this), and it even paused its experiment with a mobile ad network. If Facebook built out these streams it might piss some people off or make them feel like they data is being exploited, but it could definitely produce a huge boost in revenue. Off-site and off-app ad networks could let Facebook leverage its enormous wealth of personal data to power ads elsewhere so it can earn money without showing more ads on its own properties. That potential more than any is an argument for why Facebook is undervalued.
Most importantly of all, Facebook’s efforts to earn more money have not significantly impeded its mission of connecting the world. There are definitely more ads on Facebook, especially on mobile, but the data shows that they’re not annoying users enough to reduce their engagement.
Facebook has grown up. It’s no longer the red-hot startup that could double its user count every year. And it’s not the mature corporation churning out amazing profits by squeezing every last dime out of its data and usage. But Facebook has weathered the storm of going public without letting it destroy its regard for the user experience. It’s now a fundamental utility for most of the world. If it can keep from getting too greedy and stay focused on the long-term health of its community, it will have plenty of time to figure out how to turn the world’s life story into serious business.
Google just wrapped up their developer conference and I’m about to wrap up my coverage . . . for now. Google introduced so many new ideas this week, it’s hard to say which will still be important a month from now or a year from now. But for the moment, there are a few more significant upgrades that I wanted to discuss.
First, let’s talk about Google’s move into the world of streaming music. It’s called Google Play Music All Access – which doesn’t exactly roll trippingly over the tongue. Perhaps we should call it GPMAA? Before GPMAA, you could only use Google Play to stream music you purchased through the system. Now, you can listen to just about anything for the low, low price of only $9.99 a month.
To get you hooked, you can try it for 30-days for free and if you sign up before June 30, they’ll only charge you $7.99.
GPMAA combines internet radio with music storage. When you’re online, you can listen to 20 million songs, just randomly or you can create radio stations based on songs or artists. If you interact with the site, it will learn what you like and don’t like and begin to customize the playlist.
If you need music for your daily 1-mile bike ride in the wilderness, you can download songs at no additional cost (I think.) You can also add 20,000 of your own songs which I think is excessive but who am I to judge. You can also buy new songs so I’m not sure how those songs differ from the free downloads.
The big news, unlimited skips and no commercials. Sounds worth it for that alone.
It looks pretty, but early reviewers haven’t been very kind. There are already complaints about random bugs and the removal of a delete button and other features. Oh well, can’t please all of the people . . . ever.
If GPMAA isn’t enough to keep you permanently logged on to Google, their new Google Play game service upgrade should do the trick. The new service let’s you play the same game across all of your devices. Never lose your place, your points, your achievements or leaderboard status. Neat, but it’s really more of an initiative than a new feature since game developers have to add it to their games in order to make it work.
Engadget.com says that Super Stickman Golf 2 and World of Goo already have the service – so what more could you ask for? You’re good to Goo.
Have you tried the new Google Music service? Tell us what you think of it or any of Google’s new features.
A year ago today, CEO Mark Zuckerberg “rang the bell” to open trading in one of the most hotly-anticipated initial public offerings in history as Facebook hit the stock market. And promptly went splat.
Today, not that much has changed.
After debuting close to $40 and cratering to just under $18 in August 2012, the stock has somewhat stabilized in the $25 region, down 30 percent from its open-day high. And along the way, the story emerged of how Facebook tried to hide some of the mobile risk inherent in its business, and how the company panicked and botched its IPO by using vague positive language in its public prospectus and, apparently, specific negative information about slowing revenue growth to institutional investors privately.
Not to mention the $100 million paid to banks to stabilize the stock — on top of $176 million in IPO fees — for efforts that ultimately failed. And technical glitches that cost the NASDAQ $62 million in compensatory fees.
All of which negatively affected the overall IPO market.
That all said, however, Facebook has seemingly nicely recovered from the disaster — at least from a business fundamentals perspective. Revenue growth was strong in its latest quarterly earnings release, with the company booking $1.46 billion in revenue for Q1 2013, compared to about $1 billion a year ago. More importantly, mobile was significantly up, accounting for 30 percent of ad revenues, and Facebook singlehandedly accounted for 6.5 percent of all online ad dollars spent in the U.S.
Not exactly Google numbers, but pretty good nevertheless.
And the company has massively beefed up its advertising options. It’s now posting retargeted ads right in the news feed, once sacrosanct territory. And, in a move aimed directly at advertising giant Google, Facebook has launched a self-serve tool that allows advertisers to target its users based on what they actually buy and want to buy offline … which is a significant move to targeting the intent graph that Google hits so well by virtue of being a search engine, but Facebook has often missed since its visitors are on the site to meet and greet people. In addition, as soon as July, Facebook will be rolling out 15-second video ads in the news feed, a product that it will be charging major brands millions of dollars for.
All of which is having an effect.
The consensus recommendation for Facebook is currently a buy, with a price target of $34. Most analysts are in the Strong Buy category, with few or none in the dreaded Underperform or Sell slots. And in the past four weeks, analysts have revised their earnings estimates upward by a factor of 6:1.
So there’s a lot of positive in Facebook’s future, and there’s a ton of potential. But it’s still challenging when analysts compare Facebook stock with other internet high-fliers like LinkedIn or Yelp, which rose 148 percent and 48 percent in their first years, respectively.
But at least it’s better than Groupon and Zynga, both down around 75-80 percent.
And, I would argue, while there are a ton of challenges and many very significant competitors — primarily Google — the future for Facebook is bright.
Even if the public start was a stubbed toe.