In April 2006, Microsoft joined some venture capital firms to spin out unused Microsoft Research social networking technology into a startup named Wallop which seemed to be a poster child for their IP Ventures arm. Wallop launched a beta of their service almost exactly 2 years ago, but it is all over now as Wallop has announced that they will shut their social networking doors on Sept. 18.
All is not lost apparently as Wallop still has two Facebook/Bebo applications they are promoting. It’s just that the apps have little to do with the original Microsoft intellectual property or the Wallop intent of getting customers to "pay for pretty." This isn’t really a surprise since startups crash all the time, not just ones backed by big companies like Microsoft.
Microsoft Corp. today announced the launch of ZenZui, an independent company with the mission of transforming the way people engage, consume and interact with Web content through a revolutionary mobile user experience and information ecosystem. ZenZui’s Zooming User Interface, a technology patented by Microsoft, was initially developed by the Microsoft Research lab in Redmond, Wash. Microsoft’s IP Ventures helps startups and growing companies speed their time to market through access to Microsoft innovations. ZenZui worked with IP Ventures to acquire the technology and assistance in securing venture capital funding to help launch its company.
ZenZui’s core technology brings advanced information visualization techniques out of the research lab and onto mobile phones and into the hands of mobile device operators, marketers and consumers. ZenZui’s high-frame rate Zooming User Interface employs up to 36 individual “tiles” that are selected and customized by users to reflect their interests and lifestyle with relevant content, interactive communications and fresh data.
ZenZui has closed a Series-A financing round of $12 million from Oak Investment Partners and Hunt Ventures. Wireless entrepreneur Tom Huseby of SeaPoint Ventures acts as chairman of the board. Leading ZenZui as CEO is Eric Hertz, who brings 22 years of international wireless experience to the venture.
The whole service is a a clever way to increase deck placement on mobile phones. Deck placement is the set of default applications that come on mobile phones. It’s the most coveted space on your mobile and distribution through deck placement makes or breaks most mobile apps. Currently deck placement is hard to come by because it’s determined by carriers at the highest levels and often includes some revenue sharing. ZenZui application has essentially turned one spot into 36 (they hope to make it 1000).
This would all be well and good if ZenZui wasn’t essentially doing the same thing carriers are doing right now, charging for placement. You see, ZenZui isn’t a new way to surf the web on your phone, but rather a new way to surf ZenZui’s web on your phone. It’s all elegantly summed up in this chart showing marketers and developers piping content into your phone.
Each of the 36 spots currently included with ZenZui are powered by content partners, such as Zillow, Eventful, Kayak, OTOlabs, Avenue A, Razorfish and Traffic.com. They will be monetized using “well-established advertising principles like CPA and CPM (we call it CPZ – Cost Per Zoom)”. To encourage development, ZenZui will split ad revenue with widget developers.
I knew there was sure to be some money in the deal somewhere. Also, although it is not spelled out explicity in the press release, it is being generally reported that Microsoft reatins an equity stake in the company.
It seems to be Microsoft deal day and leading off is the news that Microsoft’s Halo video game based movie, which went on the rocks when Universal and Fox withdrew their funding, has been indefinitely postponed:
Microsoft Corp. on Tuesday said the company and the Oscar-winning team behind “The Lord of the Rings” films have postponed “Halo” — the movie based on Microsoft’s popular alien shoot-up video games.
“At this time Microsoft, Peter Jackson and Fran Walsh have mutually agreed to postpone making a feature film based on the Halo video game,” Microsoft said in a statement.
“While it will undoubtedly take a little longer for Halo to reach the big screen, we are confident that the final feature film will be well worth the wait,” said the company, which through a spokesman declined further comment.
Leaving broken Hollywood dreams behind for the mundane technical variety, if Microsoft did a big unified communications deal with Nortel why are they demoing with Mitel?
Well, if past deals have problems, there are always new deals like Microsoft and Zend Technologies Announce Technical Collaboration to Improve Interoperability of PHP on the Windows Server Platform. No financial terms were disclosed, but I find it hard to believe that it is a great business opportunity for Zend without some reimbursement from Microsoft. Best line:
The companies believe the alternative “WIMP stack”–which substitutes Windows and the Internet Information Server (IIS) for Linux and Apache–will have some appeal.
Here’s another one that asks more questions than it answers, but in a potentially interesting way:
Autocell Laboratories Inc., a maker of automatic frequency management software for wireless networks and applications, has confirmed that it has entered into a licensing agreement with Microsoft Corp., the company said on Tuesday.
The licenseing agreement is with respect to Acton-based Autocell’s patent portfolio related to load balancing, automatic channel selection, transmit power control, fast roaming, automatic secure wireless key distribution and generation, as well as various software architecture patents.
Microsoft has also obtained non-exclusive rights to use the Autocell access point and station source code bases.
And Microsoft isn’t just buying technology, it’s also selling – in China:
Today at the Innovation Summit in Beijing, Microsoft Corp. announced the first-ever licensing of technologies to two Chinese software companies, Comtech Group Inc. and Hunan Talkweb Information System Co. Ltd. (Talkweb). The innovative mobile communications technologies were developed by scientists at Microsoft Research Asia in Beijing. Comtech and Talkweb are demonstrating the potential for intellectual property created in China to be the basis for new businesses in the growing Chinese knowledge economy. Although Microsoft has successfully partnered with other companies and entrepreneurs in Europe and the U.S., this is the first time early-stage intellectual property-based technologies are being licensed under the shared-success business model of Microsoft IP Ventures in China.
The financial part of “shared-success” was not disclosed, but Microsoft says that they like the Chinese deals so much that they are working hard on more.
Back in April, Microsoft did a “spinout” of some Microsoft Research social networking technology to a startup called Wallop as part of their IP Ventures program. Aside from the basic novelty of Microsoft selling off unused technology for a share in the resulting company, it raised a few eyebrows since Wallop competes with Microsoft’s own social networking initiatives like Windows Live Spaces as well as the biggies like MySpace.
Well, whatever the wisdom of dividing the field, Wallop launched its service in beta today:
Wallop, a company spun out of Microsoft and backed by veteran venture capital firms, today launched its beta product, a breakthrough innovation in the social networking space with a unique business model. Wallop, an invitation-only network, for the first time combines a social networking site with a marketplace, enabling an entirely new way to self-express and enhance a person’s increasingly important online image. Central to Wallop’s business model will be Adobe® Flash developers and designers who will sell their personal creations on Wallop’s marketplace. Now Flash experts, who have been responsible for many of the most innovative Web concepts, can make money doing what they love without any of the business hassle.
Wallop’s marketplace model empowers users to further enhance their online image by purchasing ready-made, interactive forms of self-expression, or what Wallop calls “Mods” from Flash developers and designers who are members of the Wallop Modder Network (WMN). Thanks to this rapidly growing group of Modders, Wallop’s marketplace is populated with original Flash content, such as interactive characters, stylistic backgrounds, graphical features and games, ready for purchase by the broad market of Wallop consumers.
More than four years of research at Microsoft combined with Wallop founders Karl Jacob and Sean Uberoi Kelly’s vision for leapfrogging existing social networks, led Wallop to focus on the larger trend of self-expression online with the simplicity people experience in the real world.
I view it as a spiffier version of the pervasive MySpace “enhance your profile” business, presumably without the cheesecake (or maybe not). If this sounds a little wacky, read Michael Arrington’s discussion of the Wallop business model at TechCrunch:
Unlike the other social networks, Wallop CEO Karl Jacob says he has no plans to ever put advertising on the site. It just lessens the user experience, he says. Instead, Wallop wants a piece of the $3 trillion per year U.S. market for self expression items (clothes, furniture, beauty supplies, etc.). As sites like Cyworld have shown, people are willing to spend money for online expression items, too (Cyworld brings in a reported $300,000 per day in microtransactions to its users).
So Wallop has created a marketplace for “self expression” items on the site. Flash developers can create items and sell them to users. Music clips, animated widgets, artwork, avatars, clothing for avatars, etc. will all be for sale. Wallop handles payments and DRM, and takes 30% of the sale price. The rest goes to the seller.
At the moment, membership in Wallop is by invitation only from someone who is already a member or by asking for an invitation at http://www.wallop.com/.
Update: Best line – “Wallop, the social network where you pay for pretty.”