Social networking advertiser SocialMedia raised $6 million from IDG Ventures. Existing investor Charles River Ventures also participated. The company was shopping around for a larger investment of around $20 million with the investment bank Savian, but decided to take a smaller amount. At least, that is the story the company is going with.
The company claims that it had $16 million in revenues last year and says it was profitable for three consecutive months thanks to the launch of a new advertising product called Word of Mouth. These are opt-in display ads that asks people on social networks to answer a question or take a poll. The point of these ads are to find people who have an affinity for a brands and then rebroadcasting that affinity to their friends.
“months thanks to teh launch of a new advertising product called Word of Mouth.”
Your l33t speak just subliminally came out. Gotta jet 2 w3rk.
with the rise of social media sites like twitter and Facebook, I think we’ll be seeing more of this type of thing. Big companies buying out or investing in smaller social networking sites. It’s an exciting time in technology, advertising and marketing.
Their branding strategy suddenly becomes apparent when they (the company “Social Media”) launch a product called “Word of Mouth”. Presto! Buzzword-compliant business plan! And 5 Gazillion hits on Google already!
Geez. Another $6m investors won’t see again.
(was that being too cynical?)
I think social media has a lot of potential in the world of publicity 2.0.
The term social media is a term that refers to “sharing and discussing information among human beings using the internet tools and web technology like facebook, Twitter, RSS, etc”.
The term “social media” most often refers to activities that integrate technology, telecommunications and social interaction.
Social media can take many different forms, including Internet forums, weblogs, wikis, podcasts, Technologies include: blogs, picture-sharing, vlogs, wall-postings, email, instant messaging, music-sharing, crowdsourcing, and voice over IP, to name a few.
Examples of social media applications are Google Groups (reference, social networking), Wikipedia (reference), MySpace (social networking), Facebook (social networking), YouTube (social networking and video sharing), Avatars United (social networking), Twitter (social networking and microblogging). .
Once Social Media can get its hand around effective ad optimization, investing will go through the roof.
No company purposely settles for $6 mil when they’re advertising looking for $20 mil. Sorry Charlie.
We all know social media is a great way to help grow a business and everyone is suing but all these sites still come down to the age old dilemma on how to turn a profit.
Why take $20M if $6M gets you all the way there…$20M with typical vc preferances (i.e. they get their money back first and more) is a lot of money you gotta pay the man before you collect. Some of you Techcrunch readers dont understand venture capital. This is a big win for Socialmedia.
Well I hope that money gets paid back because I’ve had nothing but horror stories trying to get social traffic to convert near as well as Adwords. I’m aware that my offers are most likely the main cause for low CTR’s but I’d love to hear other peoples experience.
Their days are numbered. I fell for it once – clicking on a survey – but after I realized it was just another marketing ploy, I’ve never clicked again. They had to close this round before everyone realizes their gimmic is only good for first-timers.
Dear Entrepreneurs!
We developed a breakthrough technology.
Then I develped a proposal.
To submit this confidential proposal ,I emaild to many companies(marketing,engineering,customer relation department)and I coould not get any reply.
I need to ask you “How you make some company to read and analyse your proposal “.
Please guide me.
thanks
asim… if the companies you are sending it to speak English, maybe you should try to do the same.
Please advice me propoerly and let me know what is the right procedure to make some company read your proposal?
Thanks
yeah, let’s see how this one will go
http://comunalec.com
yeah trying to run this one, let’s see …
If you call going from a $100M valuation to a $20M valuation a good thing for Socialmedia (VCs take similar percentages for their investment), then yes it was a really good outcome.
nice post