Google passes on Riya, and more about meebo
OK, lot’s of rumors lately about Google buying up the face recognition technology start-up (that hasn’t even launched) Riya. The deal is dead now it seems.
You know what? I feel relieved, and will tell you why in a minute.
I have no clue why there was no deal, but here are some possible explanations:
- $30m was too high a price tag: hardly. if their technology is revolutionary, then any % change in Google’s stock price would have paid for it.
- maybe their tehnology (after due diligence) is not that revolutionary, or is not stable, robust, whatever.
- maybe their technology can easily be copied, or is not patentable, so no barrier to entry here, and it’s just buying air.
- maybe a people conflict
- maybe a PR problem: Google buying up 10–people companies with no revenues, no yet launcehd product, etc. creates bad image.
And that’s exacly why I’m relieved. All this stuff about creating a company, raising money or selling it in 3 months is non-sense. Look at Meebo, a GREAT little tool to have all of your IM chats on one single AJAX page. The guys (3 of them) have just closed a round with Sequoia Capital for $9–10m pre, and we guess for a 25–30% stake. What?
My questions on the Meebo deal:
– I know fir instance that AOL has been fighting forever with all “rogue” clients of AIM. If you want to interconnect to their service, if you ever become big, you need to pay. At any case they can block you. Hardly a sustainable business without serious written deals (OZ got them though).
– if the team built the whole service in 3 months with 3 guys, than probably the next team can too. Is this just speed to market and a winner-takes-all strategy ? Sure the service is a very nice to have, but where’s the business model? Advertising on the page? licensing the technology to someone else ? Creating the web 2.0 interface for the IM giants out there ?
Hitchhiker’s guide to 650 has an interesting insight: “ I suspect the key metric that got the partners over there excited wasnt their incredible week over week user growth but the average duration of the visits. Because IM is the stickiest of all apps, Meebo has essentially created a persistent connection/relationship with their users . . . the first requirement for becoming the third “desktop” . . . (windows and the browser were the 1st and 2nd). ”
Anyways, Techcrunch remains an interesting read.
