Monday, October 22, 2007

Why Did Google Recently Purchase Three Social Software Companies: Dodgeball, Jaiku & Zingku?

My previous post reviewed Google's recent acquisitions of three social software companies and briefly profiled each one. Read it below. Here, as promised, is a more detailed discussion of the rationale for purchasing these companies.

Dodgeball, Jaiku, and Zingku are all, in one way or another cellphone-IM communications. It's a market that's still quite open in the US.

To understand the potential market size you need to look at Europe. Texting in the UK (the market we're most familiar with) is the basis of all cell communications for 18-26 year olds in the university market. Part of this is that prepaid minutes are much more popular over there than in the US and that you can send 20 texts in the U.K. for the price of a minute's conversation.

Young Europeans text everything, complex plans, where to meet, news, even long conversations. On average probably 10-20 texts per day. And unlike here in the US, they're always on Instant Messenger.

So if text becomes less expensive in America and Google has all the cool text-related sites they're looking at a potentially huge market. In the emerging age of iphone (or if a Googlephone exists?), These will be great places to sell video or visual AdWord-like-objects that become SOCIALLY relevant in an immediate manner.

Plus...these sites will also get radical upgrades which will also make them even more desirable for the European market.

We've been using Dodgeball at Jugular, and I'll explain how it might all work in the next entry (thanks to Katie, our Jugular intern for her smart research and insight).

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