

With GroupMe’s acquisition, zero revenue companies are back in style - bond
http://venturebeat.com/2011/08/22/groupme-zero-revenue-acquisition/

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damonpace
I see this as a talent/technology grab instead of a revenue play. Obviously,
Skype will be able to integrate the technology and find a way to monetize it
with their user base. There have been multiple companies purchased before they
even launch a product. What's the difference?

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dan_manges
The difference is the price. Most talent acquisitions don't go for $85
million.

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EGreg
I don't think it's zero-revenue companies. I think it's group messaging apps
that actually got traction and users.

Beluga Kik Messenger GroupMe

all of them got snapped up in short order. There is obviously a demand for the
team and the userbase.

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nir
The fact it has users actually makes it a negative-revenue company, since
every message the users send costs GroupMe money. At 100M msg/mo, that's
probably a bit more expensive than keeping some servers running.

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nknight
That's less than 40 messages/second. Even if every message goes out to an
average of 20 people, that's less than 800 messages/second. If each message
averages 1KB (and why would it be that large?), 800KB/sec, or less than 7mbps.

For high availability, I'd guesstimate maybe 6 physical servers in
geographically diverse locations.

If they're spending more than a couple thousand a month on raw infrastructure,
I'd be utterly shocked.

Edit: By the way, this kind of thing is nothing new. IRC networks have handled
traffic with similar properties for 20 years.

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semanticist
GroupMe was sending SMS text messages, and while they're nominally just a tiny
amount of data, the cellcos don't bill the same way as your local upstream
internet provider.

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mgkimsal
Correct. So... use that 800/sms/second. Even assuming they were getting SMS at
a bit over .1 cents per SMS (highly unlikely - probably much higher than
that), that's about 80 cents per second - round it up to $1/second that would
be $3600/hour.

Sheesh - is my math right on that, or did I move a decimal place?

I'm guessing they weren't burning through thousands per hour every hour on SMS
fees, but even hundreds would put a serious dent in a startup's pocket.

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sabat
_could be the first indication that the zero-revenue company is back in
style._

I'm not sure that "it happened this one time" equates to "back in style".

