What’s a Little Meebo Money Among Friends?

If this is true, it’s nuts:

The rumors are flying that Meebo, all of 13 weeks old, has raised money [from Sequoia] at a $10 million pre-money valuation.

I’ll say straight up that the Meebo guys, in addition to seemingly being nice folks, have done a swell bit of coding with their web-based IM client. And there is nothing to sneeze at in a 17% daily compounded growth rate.

But at the risk of sounding old-fashioned, what’s the business here? You’re not going to charge, so it has to be ads, does it not? Among other issues, how is running ads alongside someone else’s IM service any more acceptable that Google running ads alongside someone else’s news content? Or is Sequoia just funding them — assuming they’re funding Meebo at all, which I still find doubtful — as a pure flip to acquisition exit?

obDisclosure: I have a nasty cold and a sore throat, so I’m less lucid than usual. It’s entirely possible I’m imagining all of this in a Sudafed-fuelled stupor.

Related posts:

  1. Musing About Meebo
  2. Om Tips Technorati’s VC Money
  3. Mo’ Money for Social Software
  4. What are a Few Sand Hill Roads Among Friends?
  5. It’s Full of AJAX Office!

Comments

  1. Ian Wilson says:

    I tried Meebo, on your recommendation, and I think I saw the future of the desktop. If they put in $10 million then they are probably already talking to GYM.

  2. Niraj says:

    Meebo is one of those companies were funded to be flipped. $1 million investment -> $20 million pay-off. A 20x return.

  3. Hashim says:

    Imagine Meebo being built into MySpace.
    Imagine Meebo being built into Ebay.
    Imagine Meebo being built into MSN Spaces, Yahoo 360 or Blogger.
    Meebo works very well and is easy to flip into GYM or any of the other big companies.

  4. Scott White says:

    It’s hard to imagine another business model that has a lower barrier to entry and lower switching costs than this one. And to think Sequoia is willing to pay 10 mil for it? It’s a cool service don’t get me wrong but 10 mil, that’s just absurd.
    Makes me think I’ll have to start a company called Emo which allows you to receive in in one place emails from your gmail, yahoo, and hotmail accounts.

  5. grumpY! says:

    forget one of “GYM” buying meebo. all of these firms all ready have the technical know-how to build inter-network communication into their clients (in fact the code is already written, tested and open-sourced via many projects)…they just can’t be bothered.
    i just don’t get the point of meebo. okay, i can do IM in a web page. now what? not sure why i would even want to dump my inter-protocol IM to use this. and where is the growth in IM? its a dead market. IM had a window around 2001 to displace email, never made it.

  6. grumpY -
    LOL! It has obviously been a long time since you were a teenager and likely that you don’t have teenage kids. IM blew past email as a primary means of tini-bopper communication a long time ago!
    p.s. LOL stands for Laughing Out Loud! :-)

  7. grumpY! says:

    harris – i understand the use patterns of IM, but it is still only a sliver of email traffic, and it will never become more than that, since the key players screwed up the chance they had to integrate their client protocols years ago, and now further fragmentation with the mobile protocols. how does an MSN messenger user interroperate with an SMS user, an AOL user, and a google talk user simultaneously? email users don’t assk these questions.

  8. Denny says:

    The key point is the low barrier to entry. If a few people can whip Meebo up quickly then GYM or another startup can whip it up in days. Given their seed capital I’m sure we’ll see a few of these pop up now. How does Meebo differentiate itself? It can’t.

  9. mrk says:

    GYM can’t purchase it – conflict. Sequoia does not fund flips because flips dont exist (in the sure bet sense of the word)- My wife has cracked the gillettes IM traffic blocker and and is now pestering me all day. business model? there is one but its not apparent to us yet.

  10. There is one reason why meebo is working well right now, and that is because all of the people in schools, offices who are behind a blocking proxy cant get their IM fix without meebo because it has all been blocked (inluding the web editions of MSN and AIM (yes they exist, thus they don’t need meebo).
    This will all fall apart when the proxy server catchup and start blocking meebo the same way they block the other online IM providers and meebo will lose the 50%+ of people who use it because they have no other method of access.

  11. SiliconBeat says:

    Meebo — embodies Web 2.0 hype, and promise

    (Updated with note about Kawasaki’s Law) Meebo, the company that lets people access their instant messaging programs from America Online, Yahoo, Microsoft and Google from the Meebo Web site without having to download each service’s software to their co…

  12. Ric says:

    Yep, I also think they will get a big hit when companies start to block Meemo.
    I guess their business model would be either offering Meemo for other sites (where the integrated Meemo has more value than meemo by itself) or just showing adds, or selling Meemo Tshirts!