Blog Post

Jingle Goes Big

Free directory assistance provider Jingle Networks said today it had raised $30 million in Series C financing, bringing its total funding to over $60 million and its post-money valuation to more than $150 million. Jingle has been able to attract so much money because it’s bringing the ad-supported business model that we talk about all the time to an area that’s relatively unpolluted with ads.

The company operates 1-800-FREE411, which dispenses free directory assistance in exchange for targeted advertising – ideally for a direct competitor to the business you’re seeking. Though we use the service a fair amount, we have yet to hear an ad that is an appropriate alternative to the business we are looking up.

At the same time, our non-techie friends instantly understand the Jingle concept, and this obviousness seems responsible for its 13 million inquiries each month, or three percent of the directory assistance market. We hope the company doesn’t have to raise any more money before it can finally have an inventory of relevant ads!

Jingle’s funders now include Goldman Sachs, Hearst Corporation, Comcast Interactive Capital, First Round Capital, IDG Ventures Boston and Liberty Associated Partners.

8 Responses to “Jingle Goes Big”

  1. D Fisher

    About Metro One and Jingle, the question now is what will Jingle do when Metro One goes out of business? Looking at their financial statements, they are bleeding cash as their revenues are way, way below their fixed costs. Gary Henry, the CEO with no previous CEO experience or previous management experience at a telecom, is a clone of Tim Timmins, the former CEO who rode atop the market and then didn’t have the business sense to keep it afloat.

    I was in on the meetings when Metro One came up with Infone and could see the company really lacked the ability to plan and execute. And their too proud to sell the business for cents on the dollar.

    So again when Metro One goes out of business this year, what will Jingle do?

    Thanks

  2. Kevin Martin

    Last I checked free-411 doesn’t allow call completion except to the advertiser? Am I missing something? Maybe they changed this given the cost if not also for regulatory reasons.

  3. How long before the major mobile carriers start using an ad supported model themselves?

    Also, I believe that there were several digg.com posts about using free-411 to make free long distance calls via free-411’s call completion feature. This alone could have resulted in most of Jingle’s claimed increase in call traffic.

  4. Kevin Martin

    Brian

    Intersting you mention Metro One since Jingle actually leverages Metro One (INFO) to provide DA. How about someone taking out INFO and just doing this themselves. For 14 -16 million the platform is yours!

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    re., Aug. 7 /PRNewswire-FirstCall/ — Metro One Telecommunications, Inc. (Nasdaq: INFO – News), a developer and provider of Enhanced Directory Assistance® (“EDA”) and other enhanced telecom services, today announced that it has been selected as a preferred directory assistance provider for Jingle Networks’ 1-800-FREE411 service.

    ADVERTISEMENT
    Jingle Networks selected Metro One based on the Company’s long history and expertise in providing high quality, accurate, and efficient directory assistance services. As the nation’s leading advertiser-supported directory assistance service, Jingle Networks’ 1-800-FREE411 offers an interactive, one-to-one communication with targeted prospects at crucial moments in the sales cycle, delivering lower-cost, no-risk customer acquisition compared to traditional media.

    It is anticipated that Jingle will deliver significant revenue to Metro One over the term of the agreement. In addition, the agreement includes financial commitments from Jingle based on call volume expansion and other financial incentives. Further, the agreement calls for Jingle to receive warrants to purchase Metro One common stock contingent on meeting specific revenue targets over the next 24 months.

    “Given Jingle’s aptitude for integrating advertising and technology and translating that know-how into a rapidly growing business, we are delighted to enter into such a significant relationship with this company,” said Gary E. Henry, president and chief executive officer of Metro One. “Jingle is emerging as a leader of a very promising new industry that offers marketers a powerful media channel to reach consumers. Jingle needed a directory assistance provider who not only could scale with their exponential call growth, but also had the technology experience to do it right. Metro One is uniquely positioned to deliver under these aspects and much more. We believe this contract is the initial phase of a long-term relationship that will deliver many benefits to Metro One, not the least of which is aligning ourselves with strong growth.”

    Jingle founder and chief technologist, Scott Kliger added, “The live operator directory assistance function is a vital aspect of our business and we are looking forward to working with a leader like Metro One to ensure the highest quality service is provided to our callers.”

  5. Directory assistance is a graveyard. Look no further than Metro One (NASDAQ: INFO) for a cautionary tale about this space.

    Call center costs, and a failure to restructure to deal with price competition sunk Metro One. The company is still around, but a tiny fraction of its value five years ago.

    As their carrier 411 business dried up, Metro One launched an expensive bid to create a cheaper alternative to 411 called INFONE. It was a colossal flop.

    Other companies have tried the free 411 model. The problem for Jingle is that the operators have trained people to dial 411. Everyone knows what 411 is.

    The real issue though is that the average person dials 411 perhaps two or three times per year. This means two things. One, so what if a call costs $0.75 to $1.25, chances are the user won’t notice. Two, if someone only calls directory assistance a couple of times per year will the spend the mental effort to remember Jingle, or just dial 411 as they always have?

    Maybe things are different this time around, but I don’t see a good high margin business here.