The latest to try is Ongo, a two-year-old start-up that will introduce its Web site today, with an iPad app to follow.
Ongo is backed by three major media companies: The Washington Post Company, The New York Times Company and Gannett, which publishes USA Today. Each has invested $4 million.
Ongo is for readers who peruse a variety of publications every day and want to read them all in one place. It shows articles from about 20 publications, and is in talks with dozens more.
The catch: Readers pay $6.99 a month for the service, while most of the Web sites whose articles it shows are free. In exchange, readers see no ads or cluttered pages, and can search for articles, save them and share them with friends — all from one site.
“The key thing is they don’t have to go to the other sites” to read the stories, said Kevin Skaggs, Ongo’s chief content officer and a former producer for The San Francisco Chronicle’s Web site.
Many publications generally flinch at that idea, because they want readers to visit their sites and see their ads. But in this case, they are sharing their content with Ongo because Ongo will share its revenue with them. And, Ongo said, it may attract new readers when its editors highlight stories that readers may not have otherwise seen.
Other apps, like Pulse and Flipboard, offer mobile news readers for free. And people turn to Web sites like The Huffington Post, Twitter and Facebook to see stories aggregated by editors or acquaintances.
Ongo is different because it gathers stories from a large number of publications, people can access it on the Web or on mobile devices, and professional editors choose the top stories, said Alex Kazim, Ongo’s founder and chief executive and a former eBay executive.
“I just don’t think my friends are as good as professional editors in finding stories for me to read,” he said.
For $6.99, readers get all articles from The Washington Post and USA Today and some from The New York Times, the Associated Press and The Financial Times, along with stories from one more publication of their choice. Adding other publications costs an additional fee, between 99 cents and $14 a month, which the publisher sets.
According to Ongo’s research, just 12 percent of people read enough publications online each day that they would want a service like Ongo, Mr. Kazim said. But if it is successful, he hopes to include blogs, magazines and video, making it a one-stop shop for the news.
Ongo looks like a newspaper, with headlines that a team of six editors chooses to highlight and sections like sports, business and opinion. Readers can search a topic in the news and see articles from a variety of publications.
Like other sites, Ongo lets people share articles with friends through e-mail, Facebook and Twitter. But it also lets people set up groups — family members or colleagues, for instance — for sharing, and facilitates chats about articles. If someone who is not an Ongo member signs up after reading a shared story, the sender gets a free month’s membership.
First-time Ongo users can get a free one-day trial pass, and if they register within a month, the first month is free.
We don't have enough public market acquirers to sustain the start-up ecosystem.
That was the real back story that explains why Google failed to close a deal to buy
Groupon. Groupon wanted to
sell to Google for $6 billion. Of course they did, that is a huge amount of money – real cold hard cash – for a 2 year old
venture. Do you really think they turned that down for the vague possibility of
making more from an IPO in the distant future? Yes we all hear the stories of
visionary entrepreneurs who are such bold risk-takers and some of that is true but
most entrepreneurs don’t love risk, they love eliminating risk on the way to
building a venture. The real story is that Groupon only backed off due to worries that the deal
would fall into AntiTrust
hurdles.
If we only have a handful of acquiring companies (basically today it is Google,
Amazon and Microsoft, now that eBay and Yahoo are wounded), the AntiTrust hurdle becomes more real. Even
if there is no AntiTrust
issue, Google, Amazon and Microsoft simply cannot buy all those venture-backed
companies.
So we need Groupon to go public and use their public
currency to buy other ventures working on local advertising/ecommerce. That will be
good news for lots of ventures. And a Groupon IPO success
will spur on other ventures that are getting ready for IPO.
I don’t know if Groupon really have the solid
financials to go public. We won’t know until they issue their prospectus to the
SEC. Until then we only have rumor and speculation. But if I were a betting man, I
would bet on Groupon being able to go public before
Twitter. And, this will be more controversial, before Facebook. But that as they say is another story. I am not trying here
to compile an actual list of ventures that could IPO in 2011. This is more about the
general environment for IPOs.
This has been what Steve Blank calls the “lost
decade” for tech IPOs. So why do I think that 2011 will be the year this
changes? There are 5 reasons:
- Private
markets are under SEC scrutiny. This takes away the easy option of getting
liquidity without either selling or going public. If you have more than 500
shareholders you have to make your financials public, it is the law. - There is a
backlog of great companies that have the financial strength to IPO. The IPO market
has been pretty well closed for a couple of years (some notable exceptions prove the
rule). So the companies that have the potential to IPO have had more time to grow and
get their act together. - Investors
are hungry for growth outside emerging markets. GDP in America and Europe seems to
have a ceiling at 3% and the Chindia and BRIC stories of
emerging markets growing at 8-10% has created too much capital flowing to those
markets (generating fears of a bubble). So investors want companies in the developed
markets that can grow at really fast pace (at least 30%, ideally 60% plus) from a
base of at least $100m revenue for a long time to come. That has to come primarily
from tech/media ventures. - The
macroeconomic picture is improving. Yes, there are always worries and another
crash is always possible, but "markets always climb a wall of worry" and the general
trends seem positive. But cycles don't last forever, so the people making these
decisions (Boards and their Investment Bankers) will look at 2011 as a good window of
opportunity. - The bean
counters have figured out how to live with Sarbox. For a long time, Sarbanes Oxley ("Sarbox") regulatory overhead has been seen as a reason why you cannot
run a public company. Baloney, as they say in Brooklyn. It is a simple bit of
operational overhead, a rounding error for a great company.
IPO is still the golden ticket. Real entrepreneurs want to IPO. Getting acquired
is a great way to build capital, but it is not the dream of the really driven,
talented entrepreneurs. There are logical reasons for this. The valuation at IPO is
usually (not always, plenty of exceptions to this rule) higher than you can get from
an M&A exit. And more importantly for the
entrepreneur, it is actually often easier to manage public market investors than a
bunch of VC with different agendas. But logical reasons be damned, an IPO is simply
the big badge of honor for the entrepreneur and the investors who back him/her.
It is not clear what we will call the decade that starts in a few days time
– the “teens” maybe – but it will possibly be one where we
get a sustainable IPO market for tech ventures. By “sustainable” I mean
that it cannot be a return to the Dot Com bubble years. Only great companies with
really solid financials will get through the IPO gate. And the valuations will have
to remain grounded in reality (short sellers will ensure that is the case).
Here’s hoping. Happy New Year folks.
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