Web-based instant message services — whether AIM, MSN, Yahoo or Gtalk — are some of the most popular forms of online communication. There are a couple startups that have taken advantage of this; most people in Silicon Valley will know locally-based startup Meebo, which lets you chat with friends across any of these networks.
But Meebo has a European rival, Amsterdam-based eBuddy, that may be less familiar. That’s about to change: eBuddy is opening up an office in San Francisco, it’s already making money, and it offers some pretty compelling services. See my interview with chief executive Jan-Joost Rueb, below (pictured, above).
Meebo was recently rumored to have only earned as much as $1 million since its inception in 2005. Amsterdam-based eBuddy, in contrast, says it has earned nearly 10 times that amount. Rueb tells me that the company has experienced success selling advertising packages that include homepage takeovers and “sponsored” emoticons. He says eBuddy, which is popular in Europe and other parts of the world, even sells ads in the UK for several pounds CPM or higher.
And notably, Google Trends shows that eBuddy recently surpassed Meebo as the more frequently searched term on Google (search frequency is generally a good proxy for determining a service’s relative popularity).
While Meebo focuses on putting chat rooms all over the web with their Meebo Rooms product — a group chat widget you can embed on other sites — eBuddy has focused on building out its mobile offerings. That bet has paid off in user acquisition as eBuddy has racked up two million unique mobile visitors, from among its fifteen million monthly unique visitors across its services. Meebo claims more than seven million users of its web applications, with more than 20 million monthly unique visitors of Meebo rooms. Meebo has an iPhone app but no other app developed specifically for mobile. Mobile penetration is important because there’s potential to incorporate high CPM mobile ads.
Below is my Q&A with Jan-Joost:
VentureBeat: How do you show eBuddy has serious profit-making potential? What progress is there in monetizing the high engagement numbers on eBuddy?
Jan-Joost Rueb: eBuddy has grown to close to 15 million monthly uniques where we already showed serious revenues and even some profits in the past. Among our users are almost two million monthly uniques on mobile where have not yet made any revenues. Soon we will have more direct sales and will be able to target campaigns by age and gender. Together with future “social ads” and location based services we are able to make serious revenues.
VB: What’s your vision for eBuddy?
JJR: We are the only large player in this field strong on web *and* mobile. With web-mobile convergence around the corner, we will offer the best and seamless user experience on any device. We will offer consolidated IM, packed with new features. On this large, highly scalable platform we will be able to offer advertisers cross media campaigns.
VB: How do you stack up to Meebo as a competitor and what’s your view on their products/strategy?
JJR: Meebo basically conquered the US market, however outside the US we estimate we are twice as big in terms of monthly uniques. We opened our SF office on April 13th at 555 Post Street and will start campaigns to gain US users, a thing we have never really been focused at.
On a product level we are clearly differentiating since we offer web and mobile experiences.
VB: How do you plan to expand in the US?
JJR: We will probably do that through new campaigns and partnerships in the US.
VB: How do your revenues stack up with Meebo’s?
JJR: A recent article pegged Meebo’s revenues at about $1 million since they started. In light of that number, our revenues are nearly 10 times Meebo’s revenues.
VB: Given that, what has made eBuddy more effective at monetizing than Meebo?
JJR: We were just focused on making money early on and raised our series A when we proved our business model. European traffic is ok to monetize for us. For example, the UK is a great market, even though the pound has suffered recently.
VB: What CPMs are you seeing and how lumpy or predictable are your revenues?
JJR: The best CPMs are from co-branding opportunities such as home page takeovers and custom “sponsored” emoticons. The CPMs still vary from a few cents in China, to a few pounds in the UK. Our revenues are becoming more predictable with our dedicated sales force in London, Amsterdam and now San Francisco.
VB: How many eBuddy mobile users do you have and how important is mobile to your overall strategy?
JJR: eBuddy offers two mobile versions, x-HTML (browser based) and J2ME (installable JAVA client). We have close to two million monthly uniques on our mobile versions, this is growing fast ([more than] 20 percent per month) . The J2ME is developed for 600 phones and we have already seen over three million downloads in nine months after launch. Mobile is very important for our strategy since we believe heavily in mobile-web convergence. That means IM for everyone, everywhere no matter what device.
VB: What impact do you expect Facebook Chat to have?
JJR: It will be interesting to see. MySpace chat did not have any impact on our numbers. We are looking into including Facebook Chat as a network as well. eBuddy will have all networks on all devices.
VB: Now that AOL bought Bebo, how do you expect them to utilize AIM, and how might that impact eBuddy?
JJR: They will start pushing AOL as network on Bebo I expect. It might be difficult since the UK is an MSN country. The UK is our biggest and most profitable country and still has a lot of growth potential. I do not expect too much impact here.
VB: Since you don’t own the IM networks, the switching cost from eBuddy to Meebo or the client is as easy as logging in somewhere else. In other words, the threshold for annoying a user enough to cause them to leave is lower than if you owned the network. How does this hamper the ability to release cutting edge products that might annoy some users but are otherwise useful? (In contrast, Facebook owns its network and has released products like News Feed, Social Ads and Beacon).
JJR: We will be the single point to connect for all networks on all devices. Recently we introduced eBuddy accounts with extra features. The first one enabled custom emoticons. This extra functionality for eBuddy accounts will definitely add stickiness for users. With an eBuddy account you will have access to your IM accounts and similar features on web and mobile.
Disclosure: Doug Sherrets, a VentureBeat contributor who works at Slide.com, owns Facebook shares.
VB's research team is studying web-personalization... Chime in here, and we’ll share the results.