White label social networking provider Mzinga, which officially launched at TechCrunch Boston this past November, has announced its acquisition of Prospero Technologies, another social networking company that we covered in a roundup awhile back.
Mzinga has also raised an impressive $32.5M in funding, part of which has gone towards acquiring Prospero, and part of which will be used to expand the business, which post-acquisition brings in over $30M annually from 125 enterprise customers.
This acquisition news comes on the heels of another acquisition in the space – that of ONEsite acquiring Social Platform two weeks ago. The combined activity suggests that the very fragmented and crowded white label social networking space has begun to consolidate.
I had a chance to get Forrester analyst Jeremiah Owyang’s thoughts on where this market is heading. He keeps a close eye on all of the white label social networking players and currently counts over 60 of them, with more joining the fray each week.
Given that the software technology provided by these companies is mostly a commodity – and that ordinary customers can’t distinguish between the many variants – Owyang predicts that many companies will combine and/or partner to form larger entities that deliver not just software but a slew of other value-add services.
These are services that can include hosting, metrics, and widgets, which make for more complete software solutions. But they can also include ongoing consultation that helps clients plan and execute more effective online community-building strategies. As Owyang puts it, successful companies “will be strategic marketing or enterprise partners who can share the goals of their clients’ business objectives.” They will also provide communities that not only integrate seamlessly into existing corporate websites but also pervade consumer social networks like Facebook and MySpace through the deployment of widgets.
In addition to intra-market acquisitions like those of Prospero and Social Platform, Owyang sees major ERP, media, and web companies getting involved through acquisitions and partnerships. The movement should be reminiscent of the consolidation that took place in the CMS industry during the late nineties.
He also predicts that the character of these services will change in time, with a movement away from generic white label solutions and towards packages that address well-defined verticals such as sports or video. The companies will also fall into camps that serve either enterprises who want to develop communities internally or clients who want to leverage communities for marketing purposes.
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He also predicts that the character of these services will change in time, with a movement away from generic white label solutions and towards packages that address well-defined verticals such as sports or video.
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I think he gets this right…the same way as social networks evolved from the general ones (Myspace, Facebook, Bebo, Hi5, Friendster, Orkut, etc) to niche ones (Youtube, Linkedin, Eons.com, Sermo.com, etc) the same way the social networking software packages will evolve…
forgive me for this dumb question, but can you tell me what is “White label” social networking?
Wait for My Social Network to come out !
Over 1 yr in the making
@kuldeep, Software rebrand and meshed with an existing domain.
Kulpeep
That’s not a dumb question at all. “White label” means you can rebrand the software.
In this case, any company can create their version of Facebook or MySpace
the Big List of White label social networking sites is here:
http://www.web-...king-platforms/
I cross linked at the bottom back to this post
White label/generic flavours of social network sites – this really begins to speak to the lack of original thinking and bland flavour of most of the social networking sites.
It may be inevitable of course – as all of the platforms are working toward the same elusive goal of making some money by … well they haven’t figured that much out yet have they?
Of course for the purposes of reselling these platforms to corporations for their own commercial uses it is a brilliant business to be in. Certainly one where money will be made as the size of investments and growth of the company hint to.
so many social networking sites coming out. sooner or later there will be too much and it’ll be passe.
http://CelebritySurgery.net
Congrats Prospero!
Couldn’t agree more with Jeremiah’s position on the value-added services, consultation, widgets, etc., especially at the current stage of maturity of this market.
It’s a commodity because the technology is more accessible than ever, but it doesn’t mean that all are created equal. For example, one of the questions people ask is about innovation and where/how that is happening. If you’re evaluating any SaaS vendor you ask if they’re going to keep coming up with cool new sh*t, because you’re handing over the keys to them (in a sense), i.e. you’ve realized that it doesn’t make sense to build it yourself.
If Delphiforums.com is a prime example of the worth and value of Prospero, then I don’t want to even think about how the hell Mzinga is going to leverage it. I swear those message boards have not changed since 1999. Any website that tells me to abort a flash script or suffer a site slowdown needs to be put out of its misery.
Perhaps Mzinga will be able to improve Prospero.
My one argument with Jeremiah would be over the commoditization of the technology. I think when you look at the complexity involved in truly integrated community components with existing web presences to create a seamless experience for the user the blends the technology with the content – that technology is a long way out from truly being an in-a-box commodity. And though it may eventually become one, the expertise in creating and building a unique community destination will never become a commodity. Creating a successful, and sustainable community that fits strategically with a companies overall objectives – that kind of expertise is never going to be something you can get from a box.
I agree with Benjamin. Delphi Forums’ technology is so outdated it’s not even funny. Unless they plan on dramatically overhauling Delphi Forums’ technology to add new features and fix up many existing problems, I don’t see how this is a successful acquisition, other than it being made on the cheap (less than $30 million). They’ll likely have to spend much more than that to create a decent product.
Interestingly though, Delphi Forums and TalkCity are both high-flying products of the dot-com boom that Prospero snapped up in 2001 (presumably from a bankruptcy court auction) and relaunched, with some success since both sites still had good-sized communities.
Cheers,
Doug
Jeremiah, your list is missing another white label social networking company, HiveLive
Congrats to Prospero. I’m sure it’s a good move for the founders.
Interesting to get other people’s thoughts on where the industry is going, although I didn’t see anyone who’s actually developing social network software post so I’ll go ahead and say how CrowdVine is experiencing it.
@michael chin: You’re right about innovation. There’s a ton, driven by two things. One, people are still figuring out how to niche networks are different than MySpace/FB. There’s still a ton of room for exploration in that area. Two, there’s a ton of emerging standards that are going to change how social networks look and behave (open social, data portability). The standards are just emerging, so it’s probably two years before we start to see the effects.
Re: moving to verticals. We launched a product for the conference vertical as an aid to attendee networking. It’s been hugely successful and also opened our eyes to the way social networks can be reapplied to specific problems (in this case as an aid to attendee networking).
Re: consolidation. There’s a set of these companies that wants to make products that are similar to FB/MySpace in order to attack the consumer market, i.e. places to hang out. Gina says something about Ning that’s essentially, “like a party where you never run out of activities.” That’s a tough road to take: high feature requirements, long time to profitability (ad supported), high infrastructure costs because of the need for high volume, losing potential acquirers (Yahoo), and most of the existing competitors are very well funded. I could see how people here would want to consolidate.
Re: services. If you aren’t doing the above and want to attack professional use cases there seems to be plenty of opportunity. If you’re small, profitability doesn’t seem that far off either. We broke even last year after an August launch and have already booked 50% of our revenue for this year. It’s probably easier for us to get to profitability because our costs are low (we’re just two people), but I’m sure we’re not the only company capable of running lean.
http://www.crowdvine.com
i am sorry, but can anyone tell me what is “white label social networking”? and I assume there are dark/black ones?
Wow. Prospero has been around as long as we have, back even to our netbabbler days. Fascinating…
Another list of white label social networking software is on Techcrunch: http://www.tech...ison_chart.html
On my journeys through the internet I have seen over and over people trying to compete with the likes of the dating site’s like plentyoffish.com and the community’s like facebook.com but I have never seen a someone put the two ideas together. That is, a comprehensive community with the aspect of dating. There is this new site boompya.com that has actually accomplished just that. With the ability of IM, talking to friends of friends and to have both public and private friends it is the first and hottest dating/community on the web. Check it out.
http://boompya.com
Hi,
I just came across your discussion. Do you know already the solutions from http://www.siteforum.com ? Since a few years we offer social networking software, also as a White Label Solution.
Yours
Karsten from Germany