And by that, I mean, one at a time.
You’d think that by now hundreds of popular Facebook and iPhone applications would have caught the interest of older established companies that weren’t able to move quickly enough to capitalize on these two most exciting development platforms.
You’d think that established brands with profitable business models would realize that perhaps one of the best ways to reach an audience of millions of potential new customers is through social networks and mobile platforms.
Today brought the news that The Knot, Inc., a 12-year old publicly traded media company that started out as TheKnot.com has acquired the #1 wedding application on Facebook — the Weddingbook. The Knot has roughly $100 million in revenue and a 10% profit margin. It’s market cap is $229 million but it doesn’t have a very exciting 5-year stock chart.
I think this was a very smart move by The Knot. Weddingbook was developed by WedSnap founder Kevin Lister in June 2007, a month after Facebook Platform launched. (I’m three degrees away from him on LinkedIn, but have never met him.)
I saw a several news reports and tweets today about the acquisition, but no one has speculated yet on the acquisition price. I hope it was a lot. Cleary Weddingbook represented a possible disruption to TheKnot.com, so I hope the founding team and investors were appropriately rewarded for how quickly they capitalized on the Facebook opportunity.
Also today, TechCrunch reported that the MindMaker iPhone app was acquired by German mind mapping application builder MeisterLabs. Again, no price was discussed. TechCrunch is aware of only three iPhone-app related acquisitions so far.
Maybe some highly publicized Facebook and iPhone app acquisitions will lead to even more acquisitions. Maybe the hotcakes will start selling faster now as large established companies shift their budgets from traditional advertising to more cost-effective customer acquisition strategies.
I think one of the problems is that so many of the early Facebook and iPhone apps have been rather silly and fluffy, and not easily connected to traditional business models. I mean, what major company would buy Vampires (although maybe the Twilight author could leverage that one) or Werewolves, Pass a Drink, Who Has the Biggest Brain, or Bumper Sticker? And what company would buy one of the plethora of iPhone fart applications?
Actually, maybe there is a potential acquirer for each one of these, now that I think about it. Any major gaming company would be happy to own Vampires or Werewolves or any of the hundreds of other popular Facebook gaming apps. Pass A Drink, with its 7.6 million Monthly Active Users could be acquired by six alcoholic beverages companies with billion dollar plus market caps. Biggest Brain, of course, should be acquired by the maker of Trivial Pursuit or the popular Cranium game. And Bumper Sticker should be acquired by Cafe Press. And finally, the top fart application for the iPhone should be acquired by the maker of the Whoopee Cushion, which I just discovered through Wikipedia was invented in Canada in 1930, just in time to make the Great Depression seem a little less depressing (or more depressing in a way, if you were the target of the practical joke and were the one doing the depressing.)
I could see some of the large online dating sites SNAPping up (pun intended) leading social app developers who are going to be disruptive to their business models, but some apps won’t easily fit into a parent brand, the way Weddingbook does so nicely with The Knot.
I would not at all be surprised to see more and more marriages between traditional brands and online applications. It is increasingly difficult to launch a new successful social or mobile application, simply because there are so many thousands of apps already, so the space is become more and more crowded. So it makes a lot of sense for larger companies to be on the lookout for apps that already have initial traction, and could be rebranded or redesigned to fit into the parent company’s overall product or marketing strategy.
In other words, look for the hotcakes to really start selling this year.