Nine years after starting the what he hoped would be the biggest way to upload mobile social media, CEO Chris Wade, who has just sold ShoZu to white-label telecoms services business Critical Path, conceded: “It is unclear to me that there is a standalone business model in social aggregation.”
Social media consumption has been a runaway success on mobile, but not necessarily so for some of the middle men that make those services possible. ShoZu received $36 million from VCs including SEB Venture Capital and Atlas Venture. But Wade, still ShoZu’s largest individual investor, admitted to the challenge in an interview with paidContent:UK…
—ShoZu’s foray into paid apps has been a “medium” success: Last June, the company hopped on the apps bandwagon and launched an app for the premium price of $4.95. “The great news is that every day on seven or eight app stores, people are paying for our app,” says Wade. “But are they in the tens of thousands? Absolutely not.” He says the company plans to reevaluate the offering. He mentions more services storage and content replication, and a possible change in pricing, too.
—ShoZu brand to live on: “We’re going to continue to service the ShoZu customers that exist today in the different venues they’re accustomed to,” Critical Path CEO Mark Palomba told me. Critical Path also plans to integrate some of Shozu’s functionality into its current white-label offering, which it sells via mobile operators. Current customers include O2, Orange, Vodafone (NYSE: VOD) and Deutsche Telekom (NYSE: DT).
Wade said he has been talking with ShoZu for the good part of a year already, but the opportunity to buy the company only presented itself more recently. No word from either man on the financial terms of this deal, or who/what provided the impetus for the acquisition. In some ways, the move seems an obvious fit for the two companies…
—Critical Path focuses on network-based, white-label solutions for messaging, email and content management, which it sells to mobile and fixed operators to offer as their own retail services.
—In mobile, its primary aim is services for what Palomba calls the “value phone” market. And it is increasingly moving into offering social media-focussed services, such as universal contact management. So it makes sense to have more social media expertise, and to have those services focused on the smartphone devices, both of which are strengths for ShoZu.
Other synergies are less clear. ShoZu once wanted to co-opt rock stars to use its service to post live updates for fans. Critical Path is less sexy, selling its solutions into the enterprise and government sectors. Palomba maintains that there is a fit with Shozu here – around the idea of businesses using social media services to collaborate – but Wade seems less sure of how the company’s offerings will evolve post-acqusition. “It will be fascinating to have this call in 12 months’ time to see what will be a ShoZu service,” says Wade.
One hint might come in Wade’s predictions for social media: “I think you will find commerce starting to come in more [in the form of] advertising and the ability to buy things through social networks. It will become a more enterprise centric environment.”
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