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TechCrunch »
Get Satisfaction was built around the importance of community to businesses. Now, with the launch of a new product called Get Satisfaction Engage, it wants to make those communities embeddable anywhere.
Basically, Engage is a new architecture for Get Satisfaction widgets, turning them into customizable versions of a company’s Get Satisfaction community. People can browse the new widgets without leaving whatever web page they’re on. That means all the discussion among a company’s customers, users, and fans will become more useful to people who aren’t a part of that community — including in a several contexts outside beyond the customer support arena where Get Satisfaction first made its name.
“You can infuse conversation into all of your web assets,” says CEO Wendy Lea.
Lea walked me through a couple of use cases last week. For one, community can become marketing tool, so that when people visit your website, they can browse through all the discussions about your brand and you products. Or it can become useful in e-commerce — where, at the moment someone is thinking about buying a product, they can actually ask the community any lingering questions, and browse the questions that have been asked and answered already.
The Get Satisfaction team also showed me the new widget creation process. One of the goals, they said, was to make it possible to create the widget without going to your IT department for help. You choose from six different widget templates, select which community components to include, and customize the look to match your company’s branding. You can also hide certain types of content, so that, for example, visitors to your website don’t see complaints. The whole process should only take a few minutes, resulting in a few lines of code that you add to your site.
Engage is part of a larger strategy called Get Satisfaction Anywhere, which aims to bring customer engagement to, yes, anywhere on the Web. One of the next steps, Lea says, is build more integration with CRM products.
Get Satisfaction says there are now more than 4 million people participating in 65,000 communities. For existing customers, Get Satisfaction plans to support the existing widget architecture for another six months while companies migrate to the new system.
TechCrunch »
Etsy has become the go-to site for people looking for home-made crafts and vintage items from independent artisans — and for artisans wanting to sell them, and it now counts some 39 million monthly unique visitors, 13 million items and 800,000 storefronts within its virtual walls.
Now it looks like Etsy wants to expand into serving a new class of buyers and sellers: the company has bought Trunkt, which specializes in selling artisanal goods wholesale.
The announcement came in a very indirect way: Adam Brown, Etsy’s head of PR, noted it in a comment at the bottom of a post about Etsy on the Pando Daily blog.
He notes that Trunkt is effectively a one-person operation, and that the acquisition is “an investment in a really talented person who has a deep understanding of an area of business that impacts a number of our sellers.” Financial terms of the deal were not disclosed.
This is not Etsy’s first acquisition but it is one of very few. In 2009, the company bought a digital advertising company Adtuitive, also for an undisclosed sum, and it also bought Etsy Lovers in 2011 but never seemed to have made that public. “Both were talent acquisitions at heart,” a spokesperson told me.
To date Etsy has raised some $51.7 million in funding, and most recently reported $62.8 million in sales for the month of March.
No official word yet on how Etsy will be leveraging Trunkt (“we have more details coming up about that soon,” Brown notes), but if you go to Trunkt, you’ll see that Etsy is already using it as a platform for its members who do offer wholesale products to sell them there. (Update below details more plans…)
The idea of offering wholesale, which presupposes the idea of mass production, hits a current bone of contention among Etsy sellers. Some of them have been getting increasingly upset over how the site is letting in more “artisanal” creators, who are in reality larger manufacturers rather than independents who make hand-made crafts. As Pando Daily points out, as the site continues to grow, it’s not surprising that the lines between homemade/independent and manufactured/made by machine are getting blurred and possibly harder to police.
So it comes as no surprise that one thing Etsy seems to want to make clear already is that buying Trunkt is not about Etsy selling out or becoming a platform for the kinds of big manufacturers that upset the business model for the independents who have become the lifeblood of Etsy’s existing marketplace.
“If and when we do pursue wholesale tools on Etsy, it will be in service of bringing new channels to existing Etsy sellers to meet their needs, not working with large manufacturers,” Brown says. Indeed, for some long-time Etsy sellers who do have the bandwidth to create items in quantity — even if it’s not Costco or Walmart quantities — the Trunkt move could be a great opening.
While Etsy has yet to comment officially — and we have reached out ourselves now, too, in case this is an elaborate hoax — some Etsy users have picked up on the Pando story and have started their own discussion thread on the Etsy site — with many a colorful response in the growing list of comments.
Update: Etsy’s official response, confirming the move into more wholesale services for its members, and that the Trunkt founder has started at Etsy as of today. Still no details about financial terms of the deal.
“Our acquisition of Trunkt is about exploring how we can better support the thousands of Etsy sellers (and buyers) already doing wholesale business on Etsy — and enabling many more who aspire to it. We’re really excited to start to deliver on a long-time request from our community. Wholesale does not presuppose mass production. Take a look at our Quit Your Day Job series or the sellers currently on the Trunkt platform, and you’ll see it that these are independent, creative artisans. It’s our mission to support those businesses and empower them to change the economy. Trunkt is built off our API and 95% of its sellers are on Etsy already, so it’s a logical fit. Dev Tandon [founder] has a really deep knowledge base and can start to lay out a roadmap for us. We’re really happy that he’s here for his first day at Etsy today, and we’ll be communicating more about it to our sellers soon.”
TechCrunch »
EcoATM, a company that creates kiosks that automate the buy-back of used mobile phones and other used portable electronics directly from consumers, has raised $17 million in funding from Claremont Creek Ventures, Coinstar, TAO Ventures, PI Holdings, Moore Venture Partners, AKS Capital and Koh Boon Hwee. As you may know, Coinstar operates the change conversion kiosks and owns DVD kiosk service Redbox. The company previously raised $14.4 million from Coinstar, Claremont Creek Ventures, and others
Here’s how ecoATM works. The seller places their phone into the kiosk (the company says it will not damage the phone nor read/copy any personal data from the device). The kiosk then visually identifies the phone as best it can from a database of around 4,000 devices and uses visual recognition technology to determine if the device has been damaged, and also offers up a device-compatible cable connection which allows it to analyze whether or not the device boots.
Based on the type of phone and the shape it’s in, ecoATM makes an offer. Users can then cash out (or cancel the transaction and get their phone back at any time), with the option to donate any percentage of the sale to any one of many charities. The kiosk also accepts MP3 players and others gadgets.
Every week, the company picks up the phones sold and sells these to middle market electronics refurbishers, who fix the devices up and resell them or sell the parts to other electronics companies.
Tom Tullie, Chairman and CEO of ecoATM, tells us that currently there are around 50 ecoATM kiosks operating in the U.S., mostly in California, for now. They are located primarily in malls, grocery stores and big-box retailers. And there is one on the Microsoft Corporate Campus, he adds.
In addition, ecoATM announced it has been awarded a Phase II grant for up to $1 million from the National Science Foundation. The NSF received 171 Phase II proposals in July 2011, and ecoATM’s grant was one of only about 60 Phase II Awards NSF granted in fiscal year 2012. And ecoATM won the 2011 Crunchie Award for Best Clean-Tech Startup.
Tullie says the new funding will be used toward mass commercialization and a national roll-out. You can checkout a demo of the kiosk below.
TechCrunch »
Today is BlackBerry Jam, RIM’s developer conference or WWDC equivalent. It’s RIM’s moment to redefine, rejuvenate, and re-establish itself in the world. Whether or not the company can pull it off, however, is an entirely different matter.
BlackBerry 10, RIM’s brand new platform, has been delayed, run into naming issues, and seen the transfer of power go from the company’s co-founders, Jim Balsillie and Mike Lazaridis, to long-time employee Thorsten Heins. The conference will prove whether or not RIM is now adaptable — something for which the company has been publicly flogged for the past year.
We took a trip up to Waterloo to speak with some of the employees ahead of the event, namely Vivek Bhardwaj, Head of Software Portfolio EMEA for RIM, and as I walked away I felt less sure of who RIM is and what the company is about than I ever have before.
See, one of the first things we heard walking in the door was that RIM has changed with Heins at the top. When I mentioned the past year and described the company as “lacking flexibility,” Victoria Berry, senior manager of PR and social media went ahead and threw out the word “arrogant.”
“Yes,” I said. “Exactly.”
They recalled Thorsten’s first earnings call, during which he admitted he would consider licensing the new BB10 platform and/or selling off the company if the options proved viable. They said partners were optimistic, and that the company was generally undergoing a major change in the way they looked at both themselves and the landscape.
But then we started talking about where RIM is headed.
Bhardwaj admitted that RIM, up until this point, has lacked a clear vision and identity. “We’ve never had a clear vision as to who we are, what we’re for, or the purpose of our strategy,” said Bhardwaj. “The conference is all about setting the stage for that.”
I was pleased at his conviction on behalf of the company, and he hit the nail right on the head. In today’s competitive landscape, the BlackBerry is no longer a hot, new device. It’s a BlackBerry. It’s almost a joke.
But then he went on:
We’ve identified in this world that there is an audience that not only appreciates what we build today but has this desire to really connect to the certain things in their life that they place value on, the things they value in their smartphones, and the things they value on their tablets. We’ve found that it’s different to what an iOS or Android user would put value on.
We’re going to set the stage for how important relationships are to BlackBerry users, as well as how important communities, networking, and messaging are to them. We have this legacy of email and we’ll continue to expand, but we haven’t taken the time to explain to people why messaging is important to our audience.
That sounded diplomatic enough, albeit vague with a touch of Lazaridis-style ego. (Remember this: “We’ve been singled out because we’re so successful around the world. It’s an iconic product. It’s used by business, leaders, celebrities, teenagers. We’ve just been singled out… because of our success.”)
I asked him to continue:
We want to make sure people understand who we are as a company. It’s important to know that BlackBerry isn’t for everyone. I don’t mean that in an egotistical or selfish manner, but there’s an audience that appreciates and desires what we deliver as an experience.
We need to make sure we’re messaging to them first and foremost.
That was the moment he lost me.
See, RBC released a report just yesterday saying that RIM may drop below the 5 percent mark in terms of market share, while Samsung and Apple gobble it up. Of course, this is an issue greater than numbers. Developers are far less likely to put money, time, and energy into a platform that comprises so little of the market, and thus consumers are less likely to buy hardware that stands so far behind its competition in terms of app selection.
Yet, from what Mr. Bhardwaj was telling me, it sounded like RIM is reverting back to its core competency: messaging. It was impossible for me to be sure of that of course — he had been speaking very generally. So I asked for specifics.
I pushed him about what that strategy and vision is really all about, specifically, who exactly the RIM audience is, and why they value BlackBerry messaging in particular?
We’ve done a lot of research on BlackBerry people, and we’ve seen some patterns. The research shows us that these people are hyper-connected, social networking is important to them, organizing their time is a priority, and relationships are really valuable to them. We also see that they want to be able to act and message in the moment, spread things instantly, and share things instantly. It’s very important to these people.
You see now why I’m frustrated by the whole “BlackBerry isn’t for everyone” thing now, right?
Essentially, RIM wants to be the king of messaging again. iMessage does basically the same exact thing as BBM now, but on an iPhone, and there are dozens of SMS-substitute apps (like WhatsApp) on both the App Store and Google Play. Granted, RIM still dominates in terms of secure corporate email and enterprise familiarity/reliability, but that consumer market has wandered elsewhere, searching for a little magic instead of a trackpad.
Messaging isn’t really a focus at all in today’s competitive landscape. Just because people are hyper-connected, socially active online, cognizant of their schedule, and constantly in communication, it doesn’t mean that they’re “BlackBerry people”. Hell, we buy phones to communicate, and text messaging has outweighed voice calls for a while now.
Duh! Messaging (and better yet, seamless quick messaging) is important. But what about everything else?
Well, apparently everything else isn’t really important to “BlackBerry people.”
There’s this market full of people who care first and foremost about messaging and social networking. Yes, apps are important, browsing is important, and games are important, but those aren’t what they value when they first use a smartphone.
They desire living technology — things they connect to and live and breathe by. BlackBerry is something people are always connected to. It’s an extension of their arm. That’s the type of audience we’re going for. What we’re trying to do is take the user interface and the design, and map it to the things they value like conversations and community, while making sure there’s no lag.
I shouldn’t have to say this, but clearly both iOS and Android were built around the idea that apps, browsing and games are highly important. You don’t need me to tell you how those stories have progressed.
“To my point earlier,” Bhardwaj continued, “it’s not for everyone. It’s not meant to be a platform that encompasses the world.”
Part of me, a very small part, understands what RIM is trying to do. They want to reshape the argument to say: maybe an Android or iPhone can do anything and everything, but a BlackBerry does the most important things really really well. He mentioned that RIM will move into the automotive space, leveraging the fact that QNX is baked into 300 million+ cars. “We want to be the platform that connects and simplifies the relationships, services and content, and intelligent things,” he explained.
In fact, he used a somewhat weird example to further describe what he was getting at, which involved the forthcoming, and much talked-about, intelligent fridge. He explained that the BlackBerry owner would walk by the grocery store, and immediately be notified that they’re out of milk. Meanwhile, an iPhone user would be sent directly to iTunes to buy a song about milk, whereas an Android owner would be sent to a Wikipedia page to learn the history of milk.
While Apple wants to sell you content and Google wants your browsing history, BlackBerry simply wants to connect you in a practical way. It sounds glorious, but that’s the vision, not the reality.
The reality is a brand new virtual keyboard, a desire to connect to developers with simplified SDK tools and device seeding programs, and an entirely new operating system (not a refresh — they’re really serious about that).
Yet, RIM isn’t ready to stray from their physical keyboards. Ms. Berry in PR mentioned that “of the 80 million users, I’m not sure how many but it’s a high percentage that say they like the keyboard.”
Oh. OK.
Well, the keyboard is quite nice. It’s intuitive, quick, and takes the soft keyboard to a new level. And the notion that RIM will make life a little easier on developers is a really pleasant thought. I can see it now — devs coding away and porting over Android apps to their brand new PlayBook, handed to them free of charge by a BlackBerry evangelist living out in the field.
But will developers really want to invest time, energy and most importantly, cash into this platform? Will a new keyboard be enough to save RIM?
Hells no.
A magic moment, one that changes the entire ecosystem (much like the iPad, iPod, and iPhone) will save RIM. A moment that takes the company out of the past, and even out of the present, and proves that they are the future. Seamless and easy car integration a la QNX, or something like the fridge example Mr. Bhardwaj offered, would do that. But again, those are just a vision, not the reality.
The reality is that “BlackBerry isn’t for everyone.”
TheNextWeb »
There are all kinds of smartphone apps. There are games, social network apps, news apps, less useful apps and then, once in a while, there are apps that come along and have a significant affect on our lives. Noom, a New York based startup, aims to make these very kind of apps.
Its website states its mission is “to make a healthy living a seamless part everyday of life”, and the company has a range of lifestyle and fitness apps for Android, each designed to encourage healthly living.
The company’s flagship app — Noom Weight Loss Coach — is more than just an app, and it coaches users 24 hours a day, helping them to keep track of their efforts to lose pounds. It provides tasks, exercises, quizzes and even suggestions for meals – but sadly it doesn’t cook too.
As the video shows, features that set it apart from competing fitness and weight loss apps include its varied reactions to the users behavior. If a user slacks off, the app encourages them by providing easy tasks to build confidence and links to the Noom forum where they can seek encouragement from other members.
One of the reasons many users end up getting tired of lifestyle apps is often the effort of logging progress and other data, such as calculating the number of calories consumers. Noom tries to make such processes as painless as possible by giving users easier way to input, or in some cases, have the app recognise activities.
Calorific is a calorie logging app which, instead of using a numbered counting system, works calories out using a ratio system. Foods are divided into green, yellow and red categories and if the user is unsure what category a food belongs in, a more detailed menu outlining specific types of food is available.
The app aims to help you change your eating habits rather than just trying to make sure you don’t go over a certain number of calories each day.
Perhaps the most important element that Noom tries to add is fun. Its Racing for Cardio Trainer app tracks a user’s running path and measures the time and distance. Users can race against your previous times, with a voice keeping you up to date with how far behind or ahead you are while you run.
The heart of the apps is more than just providing features to track progress, its founders say, the firm is about promoting lifestyle:
We know users do not go for an exercise everyday, so we are trying to make our features simple and easy to follow everyday. So, we are talking about wellness, not fitness.
Noom is also creating innovations that can be used in gyms. The company says it is currently refining its technology to make cardio workouts more fun, hinting on its website that future products could link users across the world:
Just imagine pedaling down the real streets of Paris, racing against your friends from all the world! Stay tuned.”
Noom was originally founded as WorkSmart Labs in 2007 by Saeju Jeong and Artem Petakov. Jeong had come to the US from South Korea in 2005 after some hard times. Back in 1999 at the age of 20, he founded an online shopping mall site but closed it down after his father fell ill and passed away from cancer.
He decided he had to do something and despite those around him trying to convince him otherwise, and he made his way to the US with only a plane ticket and no understanding of English. Jeong attempted to produce musicals in Broadway to take back to Korea, but things didn’t go as planned and he ended up in a tough spot once again.
After talking to others about his situation, Jeong says that a surprising thing happened.
After failing once and meeting people to try and get back up I realized one thing — if you talk about it you will always find a way. Maybe it was possible because I was in a country like the US.
In 2005 Jeong met Artem Petakov, who was then working for Google, and the duo set out on a mission to combine their skills to create technology which would help improve lifestyles. In December of last year the company’s name was changed from WorkSmart Labs to Noom Inc.
Noom apps are currently only available for Android but Jeong says that the company does intend to expand its services to iOS in the future.
We decided to improve the quality first then port it to iOS. Android is a better platform to iterate the product quality.
What do you think of Noom’s apps, can they get you motivated to reach your goals? Find out by giving them a try and downloading them from the Noom website.
TechCrunch »
Seven years in, Revision3 and its stable of web stars have more than survived the tough early days of building a video content business on the web. The San Francisco company is now bringing in a respectable 100 million video views per month, following a big 2011 — and it may be about to cash in.
It’s been working on a sale for the past several weeks, we’re hearing from multiple sources, with the acquirer being a television-based media company, The Discovery Channel. The price is between $30 million to $40 million, according to one person (in the range of what another video content company, Next New Networks, sold to YouTube for last year). The deal could close as soon as this week.
The company reported ad-based revenue growth of 53% in 2011 — albeit with no hard numbers disclosed — and a video view increase of 359%, to 800 million views. It also grew its YouTube subscriber base to more than 4.5 million people over the same period, a four-fold increase.
The company has also been well-supported by top tech investors, having raised $10 million in two rounds from Greylock Partners, with additional funding from Marc Andreessen and Mark Cuban.
Meanwhile, The Discovery Channel, which describes itself as the #1 nonfiction media company in the world, hasn’t had an especially strong web presence. So the match seems to make sense.
TechCrunch »
SalesVu, the maker of a mobile payments service designed for business customers, is launching a major update with SalesVu 2.0, live now in the iTunes App Store. The company is somewhat similar to Square, in that it also includes a dongle that plugs into an iPhone or iPad and works alongside an accompanying mobile application. However, the company is focused on providing tools that address more complex business needs than simply taking credit cards via a mobile device. For example, SalesVu currently offers real-time analytics reporting and the ability for businesses to post offers directly to Facebook through social sharing mechanisms.
With the release of SalesVu 2.0, a number of improvements have been added for business users, including things like receipt printing, barcode scanning, employee timekeeping, and online order processing, to name a just few.
While competing in the same general space as Square, Austin-based SalesVu is different in that it has never gone after the market of individuals users who had always relied on cash-based transactions. Instead, its focus has been the business customer processing at least $1,500/month who was looking for a mobile payments solution with a specific emphasis on integration with other backend systems like order management, deals and discount management, and social marketing.
With the release of SalesVu 2.0, the goal is to better improve on the feature set these customers need. For retailers, the company has now added receipt printing and barcode scanning functionality, which customers demanded. They also asked for the newly added employee clock-in/clock-out function, which is now tied to SalesVu’s online timekeeping solution. Plus, SalesVu 2.0 has improved the close-out process with new cash drawer functionality also new in this release.
For restaurants, the company has added features like the ability to split checks, print orders to the kitchen, adjust tips at the end of shifts, and receive orders from the web. The online orders are also displayed in the SalesVu POS app for immediate processing, as opposed to being sent out as emails, as is typical with some online ordering integrations targeted towards the SMB market. This feature now also makes SalesVu a competitor to traditional POS systems, says SalesVu CEO Pascal Nicolas
“The online ordering feature is probably the most important one we’re adding in this release,” explains Nicolas, “because we’re going from a convenience app to a revenue-generating app. These are orders that they may not have received, if they had not received them online,” he says. The feature was heavily requested by restaurants, for obvious reasons, but the functionality is available to anyone, including retailers, Nicholas adds.
Finally, for service businesses (think salons, spas, plumbers, etc.), SalesVu 2.0 has added the ability to route appointments from a business website to the app on the iPhone or iPad, and now supports the ability for the business to take a deposit at the time of reservation. Invoicing and recurring billing have been added, too.
Despite these business-friendly features, SalesVu’s biggest challenge for now is brand recognition and awareness – even Square itself isn’t a household name yet. However, one of Square’s bigger draws is that free dongle it hands out to any who ask. SalesVu, meanwhile, only gives out the first dongle per location for free and then requires businesses to pay $99 for each additional one. However, it has now dropped the monthly subscription fee ($9.95/month) for use of its cloud system to be more competitive.
SalesVu is also competing heavily on pricing, in terms of processing fees. To combat Square’s low 2.75%, SalesVu negotiated with its partner Mercury Payment Systems to take the risk and go even lower to a flat 2.7% in the U.S. In Canada, rates vary from 1.73% to 3.26% depending on card type, which means it’s (sometimes) lower than Intuit’s GoPayment. The company has a profit-sharing arrangement with Mercury which allows it to generate revenue from those fees.
Currently, SalesVu’s mobile apps have been downloaded 15,000 times, and now nearly 6,000 businesses have signed up and are actively using the system. The company is iOS-only for now, but plans to release an Android version this summer.
TechCrunch »
With the rise of startups building on top of the collaborative consumption model – that is, where users are buying from and selling directly to other users – there’s a growing need for some sort of system to help verify user identities. Although there are others quietly working in this space, today the U.K.-based startup Miicard, which is building an identity verification service, has moved a step ahead. The company has just completed its second seed funding round, raising $2.5 million from New Wave Ventures, IQ Capital and Par Equity. MiiCard had previously raised $.75 million back in September, also from IQ and Par Equity.
The company says it aims to use the additional funding to move into the U.S. market.
Currently, users register their identities with MiiCard’s service by providing access to a bank account – a requirement which still makes some nervous. Are banking details safe in the hands of an early-stage startup, you may ask? MiiCard says that it uses banking info to verify, but focuses on validating a user as a unique individual, verifying through a link to their online account. That proves they actually have access to that online account, and aren’t just providing banking account details which could be stolen.
To be clear, MiiCard doesn’t ask for your bank account number, and oddly enough, that’s something that seems to worry some folks, even though it’s info that many people and companies would know. (Hint: it’s on your checks…Besides, aren’t those are the same people who are scared to shop online, but have no problem handing their credit card over to a starving college student working three shifts at their local diner to pay their bills?) Oh, and MiiCard’s service is also VeriSign Trusted and TRUSTe certified, if that makes you feel better about the security precautions in place. And it runs its tech on top of Yodlee, which powers solutions for seven of the top ten banks. (OK, that helps).
Once registered, you can begin attaching other accounts to your profile, like your social networking accounts, for example. You can then use your MiiCard where you see fit – on your eBay shop, perhaps, or your Craigslist posting.
To date, no banks have yet signed up in partnership with the system, but the company says it’s in negotiations with several entities. The system currently works in North America, the U.K., South Africa, India, Australia, and New Zealand.
Last week, MiiCard launched the first third-party Twitter validation system, which allows anyone – not just celebs and public figures who get special attention from Twitter – to verify their account. After verification, the idea is that you could place the link to your MiiCard in Twitter’s profile section. Of course, the problem the startup now has to overcome are all the people going WTF is a MiiCard? Maybe the additional funding will help.
MiiCard was founded in September 2011 by Canadian entrepreneur James Varga, who previously worked with Centrica Business Services, Thomas Cook and Sky Sports.
TechCrunch »
Barnes & Noble has found a new, major partner in its fight to get an edge over Amazon and Apple in the market for e-books and the devices being used to consume them: it is teaming up with Microsoft in what the two are calling a strategic partnership, name yet to be determined.
It will come in the form of a new subsidiary of B&N that will include all of its Nook business as well as its educational College business. Microsoft is making a $300 million investment in the subsidiary, valuing the company at $1.7 billion in exchange for around 17.6 percent equity in the subsidiary.
The news leaves the door open for B&N to eventually spin these off into a separate business altogether — or even sell them to Microsoft. And it leaves a load of questions about what B&N will do next with the Nook, which is currently built on a forked version of Google’s Android platform.
The new company, referred to for the moment as Newco, will contain B&N’s digital business, as well as its College division. While Microsoft will take 17.6 percent, B&N will own 82.4 percent of the venture.
This is a key way of getting more content on to the Microsoft platform — specifically e-books content to ensure that its Windows 8 tablets will be able to compete not only against the best-selling iPad but also the Kindle Fire from Amazon, along with the rest of the company’s e-readers. The Kindle Fire has stolen a march among Android tablet makers and part of the compelling offer is not only the low price ($199) but also the fact that it contains so much content, including seamless access to all of Amazon’s e-book offerings.
This is also a progression — a very big one — of the funding etudes that Microsoft has been making to developers to make sure they are making apps for Windows Phone. It’s a way of getting more content on its two mobile platforms — which, it can be argued, may have come too late to the market. The first product to come out of the door of Newco? A Nook application for Windows 8, the companies say.
And given that education has been one of Apple’s bigger pushes this year, and the obvious and close links between education and e-reading, it’s not too surprising to see that B&N has also put its College division into this subsidiary.
Microsoft, too, has been courting the education market — inking its biggest-ever cloud-services deal in the education sector earlier this month. Nevertheless the pair have a long road ahead of them. In January, Apple noted that there were already 20,000 educational apps for iOS and that there were already 1.5 million devices deployed in schools, numbers that will inevitably have grown in the last 4-5 months with the launch of the new iPad and numerous initiatives to spread the tablet in the educational sector.
And there is a legal twist to the deal, too: the two companies say they have definitely sorted out their patent litigation now: “Moving forward, Barnes & Noble and Newco will have a royalty-bearing license under Microsoft’s patents for its NOOK eReader and Tablet products,” the two write in the release below. If Microsoft doesn’t use this as an opportunity of possibly persuading B&N to swap over to Windows 8 for a version of the Nook, it will also give it a very interesting inroad into developing more for Android.
As for B&N and the future of these products… this deal looks like it could potentially pave the way for B&N to spin off this business into its own standalone operation, if not into the waiting arms of Microsoft itself — long speculated to be looking at ways of gaining a stronger foothold in the area of mobile devices to better implement its bigger strategy. The idea of a subsidiary was something that B&N had first floated back in January, when it noted that it was weighing up how best to separate its digital business to “maximize shareholder value.”
There are many more questions — such as what this could mean for the company’s broader strategy for growing the market for the Nook (international being a key push that the company has yet to make, apart from some baby steps); and how well, exactly, those products are doing for the company: IDC puts the Nook’s share of the tablet market at just 3.5 percent.
The company is holding a conference call on the deal later today and we’ll update as we learn more. Update: A follow up post with details from the 8-K filed by B&N (including details on payouts from Microsoft), as well as highlights from the conference call is here.
Full press release below.
New York, NY and Redmond, WA (April 30, 2012) – Barnes & Noble Inc. (NYSE: BKS) and Microsoft (NASDAQ: MSFT) today announced the formation of a strategic partnership in a new Barnes & Noble subsidiary, which will build upon the history of strong innovation in digital reading technologies from both companies. The partnership will accelerate the transition to e-reading, which is revolutionizing the way people consume, create, share and enjoy digital content.
The new subsidiary, referred to in this release as Newco, will bring together the digital and College businesses of Barnes & Noble. Microsoft will make a $300 million investment in Newco at a post-money valuation of $1.7 billion in exchange for an approximately 17.6% equity stake. Barnes & Noble will own approximately 82.4% of the new subsidiary, which will have an ongoing relationship with the company’s retail stores. Barnes & Noble has not yet decided on the name of Newco.
One of the first benefits for customers will be a NOOK application for Windows 8, which will extend the reach of Barnes & Noble’s digital bookstore by providing one of the world’s largest digital catalogues of e-Books, magazines and newspapers to hundreds of millions of Windows customers in the U.S. and internationally.
The inclusion of Barnes & Noble’s College business is an important component of Newco’s strategic vision. Through the newly formed Newco, Barnes & Noble’s industry leading NOOK Study software will provide students and educators the preeminent technology platform for the distribution and management of digital education materials in the market.
“The formation of Newco and our relationship with Microsoft are important parts of our strategy to capitalize on the rapid growth of the NOOK business, and to solidify our position as a leader in the exploding market for digital content in the consumer and education segments,” said William Lynch, CEO of Barnes & Noble. “Microsoft’s investment in Newco, and our exciting collaboration to bring world-class digital reading technologies and content to the Windows platform and its hundreds of millions of users, will allow us to significantly expand the business.”
“The shift to digital is putting the world’s libraries and newsstands in the palm of every person’s hand, and is the beginning of a journey that will impact how people read, interact with, and enjoy new forms of content,” said Andy Lees, President at Microsoft. “Our complementary assets will accelerate e-reading innovation across a broad range of Windows devices, enabling people to not just read stories, but to be part of them. We’re at the cusp of a revolution in reading.”
Barnes & Noble and Microsoft have settled their patent litigation, and moving forward, Barnes & Noble and Newco will have a royalty-bearing license under Microsoft’s patents for its NOOK eReader and Tablet products. This paves the way for both companies to collaborate and reach a broader set of customers.
Newco,
On January 5, Barnes & Noble announced that it was exploring the strategic separation of its digital business in order to maximize shareholder value. Barnes & Noble is actively engaged in the formation of Newco, which will include Barnes & Noble’s digital and College businesses. The company intends to explore all alternatives for how a strategic separation of Newco may occur. There can be no assurance that the review will result in a strategic separation or the creation of a stand-alone public company, and there is no set timetable for this review. Barnes & Noble does not intend to comment further regarding the review unless and until a decision is made.
Additional information will be contained in a Current Report on Form 8-K to be filed by Barnes & Noble.
Barnes & Noble and Microsoft will host an investor call and webcast beginning at 8:30 A.M. ET on Monday, April 30, 2012. To join the webcast, please visit: www.barnesandnobleinc.com/webcasts.
TechCrunch »
The UK may have just entered a double-dip recession but that doesn’t seem to have trickled down to how consumers are spending money on take-out food — and the companies that are building businesses around that. The UK-based online food ordering site Just-Eat has picked up a third round of funding totaling $64 million, its biggest yet, to further build out its online food ordering service.
The round was led by private equity firm Vitruvian Partners, with participation from existing investors Index Ventures, Greylock Partners and Redpoint Ventures. The investment comes only a year after the company raised a venture round of $48 million, and a Series A of $17.4 million in 2009, and brings the total funding in the company up to a whopping $129.4 million in the last three years.
Just-Eat will be using the money to expand into more markets outside of its current footprint of 13 countries in Europe — a footprint that Vitruvian’s managing partner Mike Risman says makes it the “world’s biggest takeaway e-commerce provider.” The FT cites figures from Experian Hitwise that say Just-Eat gets more hits than Domino’s and Pizza Hut.
That expansion will likely be the in form of entirely new operations but also acquisitions, something the company has already been active in doing, in February the company buying up Alloresto in France.
“This new investment will help our continued expansion. Takeaway e-commerce has massive growth potential,” said Klaus Nyengaard, the Copenhagen-based CEO who has been with the company since 2008 (it was originally founded in Denmark in 2000).
If a lot of e-commerce is about sorting out the logistics that makes it happen (for examples look at companies like Amazon, Ebay and KupiVIP — and more recently Uber, which may, longer term, try to use its network for more than just a car service), then Just-Eat is in a strong position for growth. The company says that it already covers 25,000 take-out restaurants in that 13-country footprint, and it sends out 100,000 meals per day.
The company says that it generates more than $750 million in revenue annually at the moment, but its own margins on that are pretty thin and shows why the company needs scale to survive. Last year when it reported $500 million in sales generation its own revenue bookings were only $10 million. Extrapolating from that, revenues for the $750-million year will be only $15 million unless there are better economies at scale or other efficiencies.
Vitruvian’s venture and private-equity activities focus on middle-market buyouts, growth buyouts and growth capital investments in Europe. The investment it’s making in Just-Eat is coming out of its inaugural fund of €925 million ($1.23 billion), which has also included investments in a variety of businesses in the tech/media/telecoms sectors as well as others. They include Tinopolis, Callcredit, Inspired Gaming, Openbet, Unicom, IMD, College Group, Flexpay and Healthcare at Home.

