Tuesday, June 24, 2008

Jaxtr, We are not dead yet!

Jaxtr raised another 10 million dollars in a second round of venture capital led by Lehman Brothers Venture Partners. It brings the company’s total raised to $20 million. I was little surprised by the funding, but digging more revealed jaxtr new business model. Finally, there is a revenue generating business model. They are venturing into the international voice calling business. With the Voice widgets for social networking proving to be a failing business model , jaxtr is doing the right thing by moving towards supporting international voice calling. Apparently, cheap international calling card company IDT IDT generates around $2 Billion in revenue. This move puts them in direct competition with jajah, mig33, mobivox to name a few.

Some of the folks like Pat, Om and Luca are not really impressed with this whole deal. I partially agree with these folks on what they have to say about the product and funding in general. I have always criticized jaxtr for their lack of solid revenue generating model. So far, they have amassed a huge user based with their free beer model. I’m not sure how much money it’s generating through jaxtr café.

So enough of bitching; For a change I wanted to highlight some of the positive things about jaxtr, and why they will comeout a winner:
• Jaxtr currently has more than 10 million users in 220 countries after about a year in business. Facebook has 70 million user and they are yet to figure out a business model. Same goes with tones of other Web 2.0 startups( twitter,ning,friendfeed etc)
• Cheap International voice Calling is a proven business model. The potential is huge and has enough dough for multiple players
• Ad based voice and SMS will be successful in future
• As the founder of Linked In, Konstantine Guericke, chief executive of Jaxtr, knows and understands the dynamics of social networking.
• The new round of funding is led by Lehman Brothers, one of the top VC, which validates their product and vision
Jaxtr café has potential to generate revenue through ads

Ok, I’m not gone talk about the downside in this article. Will save that for future. For now, I wish Konstantine and team a big success.

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Monday, June 23, 2008

Location,Location,Location,Nokia grabs Plazes

It’s been a while since I talked about location based applications. Well, i'm happy to see LBS based startups gaining momentum and actually being acquired. Today, Nokia grabbed plazes. Plazes is a location based social networking startup that provides a context aware social activity service.

Plazes is a 13 people company located in Berlin. Plazes supports updating your location using FireEagle,Desktop software using WIFI or SMS. For sharing location, plazes support iCal, map widgets and KML. Congratulations to the plazes team for pulling through the rough times. This is a crowded market with no clear winners so far. Financial terms of the deal, which is expected to close in the third quarter of 2008, were not disclosed. Considering there was no revenue so far and the investment not that big, nokia wouldn’t have spent big bucks.

Here is what Nokia has to say about the acquisition:

"This acquisition helps Nokia to accelerate its vision of bringing people and places closer together, in line with our broader services strategy," said Niklas Savander, Head of Nokia Services & Software. "In addition to the key assets, through this acquisition Nokia will bring on a visionary team with an advanced understanding of social-activity services, as well as the technical ability to further develop this area."

By acquiring Plazes, Nokia will be able to extend its context-based service offering with social presence and time-based activity planning features. Plazes adds the elements of "place" and "time" to social networking through features that allow people to alert friends of their activity and location; review their own and others' past activities; share their experiences and make plans with friends, who are then able to respond with comments and suggestions as well as their own location information.

Some of the other startups that are trying their luck in location based applications are Loopt, Whrrl and BrightKite . Loopt is making great strides in North America. They have partnership with some of the biggest operators in North America. This is definitely a big deal compared to other startups.

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Tuesday, June 17, 2008

Where is the Money? Web 2.0 or Enterprise 2.0

How do we monetize Web 2.0 startups is a million dollar question that is hounding every entrepreneur and Venture capitalist. Even the mighty facebook and youtubes are struggling to monetize their huge user base. According to forrester, it looks like making money from Web 2.0 startups aimed at consumers is incredibly hard. What is more disappointing is the odds of success are one in thousand startups. Ok, maybe a little exaggerated.

Other than Google we have not seen a startup in recent years that found the gold mine. Facebook hasn’t found the gold mine; most of the other startups are still dependent on the Google Adsense ads (ning etc). We have seen tones of articles written about how to monetize twitter service, which for the most part is hugely popular with bloggers and early adopter. Still they are struggling to find that revenue generating business model. Some folks feel we are in the Web 2.0 bubble world waiting for the bubble to burst. Don’t count me as part of this crowd. I still feel there is plenty of potential in Web 2.0 startups. Google did have the same problem until they figured out the ad model. Same goes with other good startups. Some startups fizzle out in the journey, some stay put till they find the gold mine. So don’t write these startups off.

So where is the money? Enterprise 2.0 startups that are building social apps for corporate are raking in the mullah. These are the startups that are not very popular with the bloggers, but are popular among the corporate.

Here are some of startups that are making revenue (Forrester has categorized them based on the objectives)
• Listening (Communicate, BuzzMetrics,Cymfony, Umbria. MotiveQuest)
• Talking( Brains on Fire, Edelman, Avenue A/Razorfish)
• Energizing(Bazaar voice’s , Power Reviews, ExpoTV)
• Supporting(Mzinga/Prospero, Jive Software, Awareness, Lithium )
• Embracing(Salesforce Ideas, Innocentive )

Off late enterprise 2.0 startups are gaining momentum and there is a huge potential in this arena. I had earlier written about enterprise 2.0 business opportunity . The only caveat in enterprise startups are- it’s hard to get traction for big corporations.

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Sunday, June 15, 2008

Windows live VoIP service in trouble

Microsoft has decided to terminate its Windows Live VoIP service that was being provided so far with partnership with verizon. Not sure if VoIM is generating enough revenue for some of these IM vendors. Yahoo outsourced their yahoo messenger Voice connectivity to Jajah. Google has no interest in supporting Voice calls to landline or mobile from Gtalk. AOL VoIP is not doing anything good to prove things wrong.

The service shall be terminated on the following dates
• EMEA (Europe, Middle East and Africa) - July 15th 2008,
• USA - August 31st 2008.

Well, it looks Microsoft has not yet decided on a successor to Version Web calling in Windows Live messenger. Iam not sure how much money these IM vendors are generating through VoIM service. We all know skype has been making good revenue from its VoIM feature. In fact this is the biggest revenue generation feature for skype. With their skypeout and skypein, skype has been successful in cashing its huge user base.

So where does this leave Microsoft in this whole voice and messaging game. Well, another interesting product that Microsoft is working currently is called echoes. According to Mary Jo Foley from zdnet , come this summer, Microsoft plans to announce echoes service platform for Telco providers. I would still bet on other platform providers like ribbit, jajah, broadsoft, alcatel/lucent than Microsoft. We love/hate Microsoft has an OS platform and desktop apps provider. Service platform doesn’t glue well here. Om has some insight on this

Here are some highlights of echoes platform:
• Echoes will assign a local mobile number to each Windows Live contact.
• Via its Address Book sync capabilities, Echoes will push these new contacts into any mobile phone (no client required)
• The user will be able to compose an SMS or place a voice call to these contacts
• Echoes will ensure text messages are delivered to Windows Live contacts as chat conversations, and replies will be sent back from Messenger as SMS
• Voice calls can be connected through Echoes directly from the mobile to the Windows Live Messenger user’s PC
• As the mobile user will appear always “online” to friends (using Echoes client emulation server), conversations also will be able to start from the Windows Live cloud, pushed to the mobile as SMS

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Thursday, June 12, 2008

IPhone, iPod Apps worth more then Facebook apps

According to Investment bank Piper Jaffray, Apple’s AppStore could emerge as $1.2 billion. Wow, this sounds like there is a huge potential in this arena. Now that iPhone is going to be launched in more than 70 countries. The number of user owning an iPhone shall be humongous. I always believed in the potential of iPhone apps. Despite the fact that even I don’t believe the billion dollar shit, Nevertheless, there is still a huge revenue generation potential in these iPhone apps. Well, at least its better than building apps for facebook, which has been a big failure so far .

Analyst Gene Munster predicts a billion dollar based on better of the three possible case scenarios he came up with. In total, the three scenarios have the App Store adding 1% to 3% more operating income to Apple by the end of 2009.

Here is how Munster’s arrived at the numbers; His assumption is that 77.7 million active App Store users will download two applications from the service each year at an average app revenue per sue of $10 -- one free and one costing $10 -- generating sales of about $777 million and a profit of $163 million. This is a very conservative numbers. So if you top this with higher adoption rates around 95 percent (or 80.8 million active users) -- which would bump revenues to $1.21B and profits to $254 million.

Apparently, there are conflicting iPhones sales predictions for 2009. Off course piper is way too aggressive with his numbers. Check out the picture below (courtesy techcrunch)

So folks if you are busy building apps for social networking platforms, which has not been a smooth ride; building something for iPhone should be a game changer. (I need to buy a MAC and start playing around with iPhone SDK)

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Monday, June 9, 2008

The wait is over! 3G iPhone coming this July

Today was indeed 3G iPhone’s big day. Every technology news sites that I can think off, were busy the whole day covering nitty-gritty details of 3G iPhone. I was excited myself about the 3G iPhone. Apple finally announced that 3G iPhone shall be available in the market by this July.

What's interesting is- In the US the new iPhone 3G shall be priced at a stunning $199 for the 8GB model, and just $299 for the 16GB model. Some of the countries that will see 3G iPhone are —Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Mexico, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, UK and the US—on July 11

Highlights of the 3G iPhone:
• Thinner edges, full plastic back, flush headphone jack, and the iPhone 2.0 firmware
• Its 3G speeds shall trounce the competition, with pageloads 36% faster than the N95 and Treo 750
• 300 hours of standby, 8-10 hours of 2G talk, 5 hours of 3G talk, 7 hours of video and 24 hours of audio.
• Uses A-GPS, which supplements regular satellite GPS data with info from cellular towers
• Enables PUSH support. This means that a person can receive an email, get an alert, receive an update from eBay without having to be in the application, or without having to run it in the background.
• Will have an App Store from where consumers can download games,video,music and other applications
• Lots of enterprise features, RIM blackberry beware. Is this the new blackberry killer

Lot of folks have written exclusively about 3G iPhone. So Instead of writing the same stuff again, I have collected some good article below. Enjoy!
List of new apps from TechCrunch
Pricing Information from Gizmodo
First Impression From Walt Mossberg
Om Talks about stress testing ATT 3G network with 3G iPhone

Check out this video

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Sunday, June 8, 2008

Mobile Social Apps is the future trend

Mobile social networking is gaining momentum. According to report from instat, mobile social applications shall see a lot of demand from millenials generation. This is good news for folks that are building apps for social networking and messaging. Though there are concerns about the revenue model in this space, the key to startups in this space is to believe in the vision and move forward. This is definitely not a bubble space for sure. Sarah Perez from readwriteweb has penned down some good points about mobile social web.

Some user statistics from instat ,

• In-Stat predicts a steady growth rate culminating in the number of US millennials subscribing to mobile social networking reaching nearly 30 million by the year 2012
• Social network advertising continues to be experimental to marketers, but 2008 revenues are predicted to be over $1.5 billon.
• Last year’s introduction of the iPhone enabled the least techno-savvy user to surf the Internet, download and play music, take pictures, send messages, and record videos, all on a thin, touch-screen-operated unit. This has changed mobile phone users’ expectations.

So here are some of the applications that will have great impact in this space:
• Blogging
• Photo sharing
• Video Sharing
• Location Based Socialization Service- This is my favorite app and i'm a big fan of these apps. Wanted to build one of my own :-)
• IM

Talking about these apps, the question really is- How do we monetize the service. Advertisement supported applications is one of the ways to monetize the service. According to instat, this is one of potential revenue generation model. Google has successfully proved this model on the web interface. Extending the same concept to the mobile is no-brainer. There is lot of interest in this upcoming mobile advertisement space. Be it Google, Yahoo or Microsoft, everybody is eyeing for this huge market. Yahoo has a big lead when it comes to mobile search. Having said that, you can never underestimate Google’s might power. With android on its way out soon, Google will be working out their strategy to retain the number one slot in mobile space too.

Here is what instat has to say about mobile advertisement model :

In the glorious but unlamented dotcom boom, the key goal for many online applications seemed to be "attracting eyeballs" (users) who would then attract enough advertising revenue to become ad supported. The term "ad-supported" is being heard more frequently in the mobile market as well, with applications, content, and even cellular service being considered. Emboldened by the success of Google and the millions of web sites earning money with Google advertising, dozens of new companies have set their sights on the cellphone as the next advertising opportunity.

The potential market for mobile advertising ranges from the relatively unsophisticated small advertising buyers attracted to Google and large scale national and international "brand" advertisers (automakers, soft drinks, fast food), who demand rigorous measurement methods before they'll part with their 9-figure ad budgets.

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Wednesday, June 4, 2008

Some interesting news you can’t miss

I had something in mind to write today. Kind of realized that there are lot of very interesting news that I didn’t want miss talking about. Honestly, I come across so many interesting news that I love to discuss, but working full time for startup doesn’t give me the luxury to do so. The reason for me to start writing this blog was to share all my thoughts about the most important things happening in the industry. So in order to address this issue, I have decided to publish top news and links with my short comments.

Here are some of the top links for today:
Yahoo opened up API for address book
This is indeed big news. For those folks that are building address book 2.0 type applications this is short in the arm. This new API provides access to one of the largest collections of address books on the Internet--the contact system behind Yahoo! Mail, Yahoo! Messenger, and Yahoo! Go. The Address Book API supports a wide range of third-party apps, such as sending invitations to seed social networks or social apps, looking up postal addresses for shipping services for online retail, and providing address "auto-complete" for messaging app

Ok, this is something I was dreaming about
Watch internet videos on your big screen TV’s . Isn’t it cool! I was wondering if this is something I should work in my future. Yeh! I’m not kidding, I did think about this stuff. Happy to see Verismo supporting it. Apparently, Verismo CEO Prakash Bhalerao said his company has partnered with YouTube and BitTorrent to get access to their content, and vTap to search for anything else. In addition, YouTube will also be marketing the PoD to its users, which would definitely help a new company get exposure! The box can also handle anything with Windows DRM, so you can watch Amazon Unbox and CinemaNow downloads right on your TV.

Verizon in talks to buy Alltel
Twitter wants to prove their High Availability said CEO Jack Dorsey

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Monday, June 2, 2008

Facebook, we are more Open than Google

As everybody expected, facebook today open sourced a significant part of their platform. I guess this is in direct competition to OpenSocial. Off course, facebook was feeling the heat by not being part of OpenSocial. This is definetly a big move for the company that was keeping everything so closed all this time. It’s a big leap. Nevertheless, what is missing here is the partnership, OpenSocial had some of the big players like yahoo, MySpace,bebo alongside. Apparently, facebook has not been successful in getting some big players on board to support the open source platform.

Some snippets from the announcement today

As Facebook Platform continues to mature, we’ve been hearing from a lot of you that you’d like more tools and better information on how Facebook Platform actually works. As a starting point, we’re open-sourcing a significant part of Facebook Platform, including most of the code that runs Facebook Platform plus implementations of many of the most-used methods and tags.

The goal of this release is to help you as developers better understand Facebook Platform as a whole and more easily build applications, whether it’s by running your own test servers, building tools, or optimizing your applications on this technology. We’ve built in extensibility points, so you can add functionality to Facebook Open Platform like your own tags and API methods. We’re also hoping you use Facebook Open Platform in ways we’ve never thought of – just as you showed off your creativity with Facebook Platform, we hope this lets you be creative with the foundation of the platform itself.

Developers or any third party developers can download the source code. Today, I downloaded the software just to play around with. Lot of C++ and C stuff has been used to write CSS,HTML and JavaScript.

Some questions that is not yet clear to me:
• What’s the rationale in opening up the facebook platform source code. Counter OpenSocial or something more than OpenSocial?
• Who benefits from this platform.
• The code looks more of FBML, what else can we build using this code. In other words, using OpenSocial, developers can build app that can be run on multiple platforms supporting OpenSocial interface

I think the social networking arena is becoming more and more interesting. It’s a cat and mouse game between Google and facebook. This is good for users and developers. Fun times ahead. More innovative apps for users and more platforms for developers.

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