July 17, 2008
Web-Based IM Service Meebo Unveils Partnerships
SAN JOSE, Calif. _ Meebo, the 3-year-old Mountain View, Calif., start-up recognized as a trailblazer in Web-based communications, unveiled eight new partnerships on Wednesday that could potentially add 55 million users to its growing instant-messaging service.
The "Meebo Community IM" initiative is designed to bolster the company's bold self-proclaimed title as "the Web's live communication platform." It also revs up its efforts to tap into the multibillion-dollar online advertising market.
Meebo executives say the small company, which now has about 40 employees, has the technology and strategy to enable it to compete with Web giants such as Google, Yahoo, Microsoft, Facebook and MySpace for the attention of Internet users. Much as Google built its empire by dominating Web search, Meebo aims to grow through live Web communication, competing with such popular sites as Facebook, which have introduced their own "chat" functions.
Under the business arrangement, advertising revenues will be shared among Meebo and its "community" partners. The partners include such sites as Flixster, for cinema fans; AddictingGames, for game players; MyYearbook, a social network tailored for teenagers; and DanceJam, a dance site founded by hip-hop star MC Hammer.
Meebo and its partners are counting on the new IM feature to enhance the experience and deepen the engagement of the audience.
"As we introduce social networking features throughout the AddictingGames site, the chat functionality will play a big part in building our gaming community," Kate Connally, vice president of AddictingGames, said in a press release.
The IM exchanges will feature a small, targeted text ad that links to a large, media-rich ad. Meebo's ads have received much stronger "click-through" rates than typical ads on social networks like Facebook, said Danny Bernstein, Meebo's director of business development.
The new initiative integrates both one-to-one and group chat into online communities. It comes one month after another Meebo initiative that integrated chat with social networking applications, and three months after Meebo raised $25 million in its third round of venture capital, a hefty sum for such a small company.
That round, which brought total capital investment to $37.5 million, "was basically to signal the world that we're going big," Sandy Jen, one of Meebo's three founders, said in a recent interview.
The round placed an estimated $200 million value on the company. It included existing investors Sequoia Capital and Draper Fisher Jurvetson, as well as new investors Time Warner Investments and KTB Ventures. Meebo's early investors also include browser pioneer Marc Andreessen.
Meebo was launched in September 2005 by Jen and partners Seth Sternberg and Elaine Wherry as a self-funded Web site that enabled Web-based instant messaging. Meebo's technology was quickly recognized as a "Web 2.0" advance over earlier forms of instant messaging. IM emerged in the late 1990s as a synchronous and typically less formal style of e-mail that became especially popular with young Internet users. (Meebo says the median age of its users today is 21.)
Instant-messaging services operated by AOL, Yahoo and others already served millions of users, but did so within the so-called "walled gardens" of their user base. By delivering IM as a Web-based service, Meebo offers technology that doesn't require downloads and reaches a dramatically larger potential audience.
Meebo has since attracted 35 million users at Meebo.com and its partner sites that feature "Meebo Rooms." On average, users spend two hours per day using Meebo, the company says.
Early on, skeptics questioned whether Meebo's ad model could support the free service. But its growing reach and the inherently social nature of chat positions it to compete with social networks, analysts say.
"There's a lot of movement and excitement in the live communication field," said Sarah Radicati, analyst and chief executive of the Palo Alto, Calif.-based Radicati Group. "It's a very lively space, changing very quickly."
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