The browser-based instant messenger, Meebo, has new ads. Similar to Pandora’s, Meebo’s ads cover unused screen space and let users add background themes, listen to music and watch videos.
The move is a first step towards monetizing like Pandora, which has used branded ads for over a year. Video ads in Meebo Rooms are a second revenue source. Launched in May, Rooms gets 15 million messages back and forth each day, equal to 11.9% of all messages including IM’s. Building out Pandora-style ads is a start, and Meebo could benefit from innovating and taking advantage of their large user base. Although web chat competitors have sprung up, Meebo has tripled usage in the last year thanks to building a strong product. Even with rapid growth, competitors like Trillian Astra are lurking, so over time what will be the differentiator?
Already, the interactive Meebo ads are a primitive form of third-party applications. I think that Meebo should take the next step to building differentiation by making a “Meebo Platform.” Easily installable applications could be built by developers for Meebo’s 7.65 million monthly users who are spending 60-70 minutes per login, according to the company. The applications could take Meebo window space, much of which is unused. This could drive user growth and create a sustainable competitive advantage by engaging users with app’s unique to Meebo. Engagement means users are less likely to switch and Meebo becomes more than IM.
If I had to pick a specific subset of apps that would fit most naturally for Meebo, I would pick casual games. An advantage of the Meebo Platform is that “presence” of knowing which of your friends are online is built into the service, which enables real-time game play. Casual games could give way to more complex, sophisticated gameplay and substantial games businesses could be built.
But why would Meebo users adopt games when some casual games sites already have built-in IM? Casual games sites are constrained to IM within their communities, whereas Meebo taps into IM networks with hundreds of millions of users. The switching cost for non-Meebo users to use Meebo games is low because Meebo offers similar features as the IM clients. Spontaneous game play could occur on Meebo Platform, whereas standalone casual games sites rely on users to coordinate with friends or play with strangers. With a platform, and in particular with a rich set of games, some users might depend on Meebo even more for the game play and other applications than just for instant messaging. An engaging platform gives Meebo more leverage in negotiating with IM networks. Meebo could build a sustainable competitive advantage over other IM aggregators because engaging applications make Meebo more than just chat. With higher engagement comes more business model opportunities. Given a way to get more out just IM’ing on Meebo, why would you switch then? The Pandora-style ads provide a way to monetize higher user engagement coming from a Meebo Platform.
(image from TechCrunch)
Disclosure: Doug Sherrets works for TrialPay. Trillian is a TrialPay customer.
12 Comments
-
Jon said:
Neat analysis, Doug. There’s no question greater engagement is going to be crucial for Meebo going forward.
For my part, I wonder what could be done to improve the quality of ads served for the quantity of time we’re engaging users. IMs and chat logs, scrubbed for keyword patterns, could be a powerful ammunition for ad targeting.
-
Scott Becker said:
I agree, an api/platofrm would be fantastic (I can think of couple of fun applications, … and only half involving hamburger slinging [Dan Nye] ;-)
Most of the major im clients have plugin API’s (aka platforms) actually.
Here are some of my questions.
1) Should meebo allow all programing languages to be used somehow but focus on javascript/php? (aim and trillian’s API’s are compiled/non-web languages [C,Delphi, .Net]
2) Can they make it …too viral, like Facebook did early on?
should they allow message blasting to your friends from application invites?
- perhaps focus on making plugins easily
sharable: ability to view what applications friends have installed.3) How open?
I think meebo should open it as much as possible with the user choosing how much control/information they give to an app.
4) Make it a full web service api, not just a plugin platform (enabling apps to be built outside of meebo, on other sites and desktop apps)?
4) Should they make their own language or use the same concepts as other platforms?
Are other platforms allowed to use fbml or the built in iframe [is that patented yet]? (myspaceml & googleml when those platforms launch)
-
Jing said:
Doug - definitely agree Meebo can leverage the casual games space. As a web-based IM chat client, I see its chat service operating on all web-enabled devices - particularly mobile - where I feel games / music / entertainment would only be the natural add-on.
-
Charles said:
Hi Doug! *waves*
-
Sachin Rekhi said:
Doug - good idea. I definitely agree that Meebo has a captive audience that could be leveraged. Casual games is an interesting way to do it. I would love to see Meebo experiment with this.
We at Anywhere.FM have similarly been thinking about what other sorts of activities would users be interested in doing while they listen to their music library. We have talked about various widgets that we could provide, including building a platform for third party widgets. Casual games has even come up for us as well :)
Sachin Rekhi
http://www.anywhere.fm -
Ido said:
Hey Doug,
Good stuff!
An open platform (e.g. facebook) could be a true ‘growth engine’ to any company with a viral aspect like Meebo. I was wondering if they will go in the direction of more ‘mobile’ ability (e.g. iphone/black-barry versions)…What do you think?
Ido -
Ada said:
It would certainly be interesting to see Meebo adopt a platform but I’d be much less excited about your suggestion to add video ads or advertising wraps. There is a crucial difference between Meebo and a service like Pandora; with Pandora, you spend very little time looking at the site, whereas a chat interface means a lot of time interacting with the screen.
This is particularly bad because, as you rightly pointed out, there’s very little switching cost to move to another IM service. Many people use Meebo not only because they allow you to be signed onto many IM services at once, but because they are lightweight tools that don’t try to push ads or too many additional services like games. Whatever the implementation, care should be taken to safeguard the user experience.
-
Ada said:
Woops, mistyped and called the ads your suggestion. Sorry. :)
-
Nii Ahene said:
The more I think about it the question is less if/when meebo will have a platform and more how, namely how open the meebo platform will be.
-N -
Doug Sherrets said:
Thank you to everyone posting comments!
Jon, good point about chat logs, sounds promising. I’m curious what that analysis would yield for ad targeting and further where those targeted ads might appear.
Scott, good questions. Maybe start with partnerships to seed high quality app’s, demonstrate app adoption and decide from there. What would you do?
Jing, that’d be neat to see more in mobile. I look forward to watching that space develop.
Sachin, nice, can’t wait to see what you come up with. I suppose Pandora might be thinking about what to do with their active users as well.
Ido, sounds like many find mobile intriguing. I don’t know what they’ll do, but more mobile IM definitely makes sense. It seems they also have a lot of opportunity to build a business around the web audience they are building.
Ada, good point about ads. Meebo currently lets you close an ad and a new one won’t show up for a while. You’re right it’s important to keep track of user response. I’m curious how these ads will evolve.
Nii, well said, I agree. The opportunity is definitely there to create a platform, and it’s early enough for Meebo where there are a number of potential courses of action.
-
Noah said:
Great analysis Doug!
It will be very interesting to watch as this space continues to develop and approach new strategies for monetization. I particularly agree with the thoughts shared by Ada with regard to advertising. One of the primary reasons why users choose Facebook over MySpace is the clean feel of Facebook and the lack of distracting ads such as flashing icons and bright banners. If the user IM experience is adversely affected by monetization through advertising, Meebo has no real “hook” to prevent them from leaving for one of their competitors.
This point neatly segues into another issue that comes to mind (for me) with regard to competition and the creation of a new API for Meebo. That is, what happens if (when) Facebook launches its own version of IM based on the FB Platform? When this takes place, then FB users will have the whole spectrum of social connectivity and interaction taken care of on their single platform–from IM and games to music. With the millions of users that currently use both Facebook and Meebo, I wonder if users would stay with Meebo when FB launches it’s own version of IM that integrates across the rest of its ready-made applications.
Of course, Meebo has a strong user base and a great product that insulate it from its current competitors, and which may be enough to withstand these eventual moves by FB and others. But, I just wonder what will happen if FB is able to develop IM with all the functionality that currently sets Meebo apart, and that allows for integration with all the other available applications developed on the FB platform (which Meebo could never compete with).
I’m curious to see what others think, and even more interested to see how this space evolves as it makes a push toward greater monetization.
Thanks again Doug!
-
Doug Sherrets said:
Thanks Noah, excellent points, very interesting. If Facebook does add IM inside Facebook and across IM networks, that would be powerful for all reasons listed in the post, and ties in nicely with other Facebook interaction, making strong competition. I am not sure how much Facebook and Meebo user bases currently overlap. A big question is how Meebo users will adopt applications if and when made available. Now there is an opportunity to build lock-in before competitors do, including internationally, a Meebo strength.
8 Trackbacks
8:58 pm
VentureBeat » Meebo introduces third party apps said:
[...] wrote last week, here, that this looked like a great opportunity. Tagged co:Meebo VentureBeat [...]
9:13 pm
VentureBeat » Meebo introduces third party apps, platform said:
[...] wrote last week, here, that Meebo had a great opportunity to become a [...]
9:19 pm
VentureBeat » Meebo introduces developer platform, third party voice and video apps said:
[...] wrote last week, here, that Meebo had a great opportunity to become a platform. It is a social network that has evolved [...]
11:17 am
Meebo Platform Launches With Big San Francisco Party said:
[...] speculation from last week, Sequoia backed Meebo launches Meebo Platform this evening, allowing third party [...]
4:37 pm
Meebo Platform Launches « Fremontman’s Weblog said:
[...] Platform Launches After speculation from last week, Sequoia backed Meebo launches Meebo Platform this evening, allowing third party [...]
7:55 pm
Meebo the Web Based Chat Desktop said:
[...] use with the Meebo chat interface, and share with the Meebo community. Doug Sherrets of VentureBeat speculated that Meebo might launch a platform last week when the company launched its new ad [...]
7:59 am
VentureBeat » Meebo aims big, introduces games said:
[...] I wrote here, making games available to Meebo users enables spontaneous game play among friends that is not [...]
11:39 pm
Meebo raising round, valued up to $250 million. Bear Stearns sold for $236 million » VentureBeat said:
[...] the one we embedded beneath the article), which has been growing quickly, as well as its smaller developer platform. In fact, Meebo won “best consumer startup” at The Crunchies award ceremony in [...]