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Update: The Meebo funding and the likely exit strategy has sparked off a great debate. Dare Obasanjo has penned, Flipping Your Start-Up 101. “If you are building a Web startup with the intention of flipping it to one of the majors, only three things matter; technology/IP, users and
the quality of your technical team,” he writes. Don Dodge extends the argument. “If the company has market leadership in a new product space or market segment than the valuation goes up significantly,” he writes. Will Hsu takes a different take and says I lack imagination, and writes, “Meebo has essentially created a persistent connection/relationship with their users.” Greg Yardley, another one of new favs says, “why go with a zero-revenue model that’s going to be sold for $50 million tops when you could pick a business model with the potential to generate some really, really serious cash?” Example, Price Grabber. Paul Kedrosky splashes ice-cold water on the whole conversation and adds, “If you are building a startup solely with the intent of flipping it to one of the majors then you are playing Russian roulette using a gun with five full cylinders, and one cylinder containing a bullet that flits in and out with 50% probability.”
(The original Meebo report in the extended entry!)
For a while, the word on the street has been that Meebo, barely 13 weeks old has been out raising some cash. But did they? Apparently yes! The amount of money they have raised is $3.5 million, at about $9 million pre-money valuation from Sequoia Capital, and Roelof Botha has joined the company’s board. The company has been growing pretty rapidly, about 250,000 logins and 7 million messages as of yesterday, and the Meebo Musketeers have built a good platform.
Now for the tough part…There are a lot of questions about the business model here, and well, it remains to be seen how it pans out. Paul Kedrosky, who is a little cranky today because of a cold does post a good question:
You’re not going to charge, so it has to be ads, does it not? Among other issues, how is running ads alongside someone else’s IM service any more acceptable that Google running ads alongside someone else’s news content? Or is Sequoia just funding them — assuming they’re funding Meebo at all, which I still find doubtful — as a pure flip to acquisition exit?
Here is the rub: Since the company basically aggregates all four major IM networks in a browser, all the four major IM owners – AMYG are out of the acquisition game. One of them buys the company, the others shut down access to their respective networks. The very quality that makes Meebo attractive to end-users will make it difficult for them to be acquired. But there is one option: eBay. When all fails, you know who to call. Skype did. Interactive Corp is another long shot, but they are bargain hunters not premium payers.