The internet industry is at a low ebb: How does a start-up company spend the winter

Interest in the Solomo model has been greatly reduced as Facebook, Zynga and Groupon stock myths burst. For many of the privatised web start-ups that are riding this trend, they have to deal with the problems of the site's recession.

Interest in the Solomo model has been greatly reduced as Facebook, Zynga and Groupon stock myths burst. For many of the privatised web start-ups that are riding this trend, they have to deal with the problems of the site's recession.

2012 "Solomo" market has cooled

Beijing time, December 24, according to the Wall Street Journal (blog, Weibo), the godfather of Silicon Valley, Kleiner venture partner John in 2010 created the term "Solomo" to explain how "social", "localization" and "mobile" to promote the site's prosperity. But with the myths of Facebook, Zynga and Groupon on the market, interest in the Solomo model has been greatly reduced. For many of the privatised web start-ups that are riding this trend, they have to deal with the problems of the site's recession.

Some companies want to follow Facebook's public offerings and then abandon them, while others try to keep their businesses at a distance from Zynga and Groupon to avoid becoming the same, as well as paying close attention to the user growth curve, hoping to recreate yesterday's brilliance.

Several internet start-ups have completely shut down their stores. Photo and video sharing website color Labs 41 million dollars last year, but then fell into the plight of slow growth in the number of users. There was a news that the company would close down.

"The Solomo market has cooled," said Malley, a venture capitalist Blaine Omary, "that" there was a time when people didn't even believe it was a difficult business to start, and now everyone's confidence is faltering. " ”

Here are three Solomo-mode startups to see how they deal with the problems of the site's slump.

The Viddy of great rejoicing

Viddy is headquartered in Los Angeles, Calif., the company's CEO Brent Oblein (Brett O Brien) tasted "roller coaster" in March. The company offers a free app that allows iphone users to edit and share video. When the company opened last year, the number of employees was only 10.

Next, Viddy will use the Open Vista platform to connect with Facebook, allowing Facebook users to share their viddy activities in a friend's "News Feed" service, which clearly improves the overall image of Viddy.

Meanwhile, the number of active subscribers linking Facebook to Viddy applications has climbed from 60,000 in January to 890,000 at the end of March. At the end of May, the data soared to 31.1 million.

Meanwhile, the Facebook4 month announced acquisitions of photo-sharing mobile apps Instagram, stimulating the limelight with a new round of investment enthusiasm. Despite the lack of any revenue, Viddy was inundated with the avalanche of investment. In May, Viddy announced a $30 million trillion in funding, and the company's market valuation soared to $370 million. "It brings problems, challenges and opportunities," says 46-year-old O ' Brien. ”

To talk about the problem, the user is heavily involved in the Viddy technology, some people try to be unable to log in to the application, or the user complained that the application is too slow, and a group of users in the mail and posts in the various grievances.

"We have a part of the energy to deal with these things. "said O ' Brien.

Viddy's user growth rate is certainly affected. As of July, the number of active subscribers connecting to the app through Facebook dropped to 10.9 million. In November, there was only 650,000 left.

Currently, the start-up has enough money to run for years and has its own patented technology, with 40 million registered users 10 times times as early as the company started. "But Viddy didn't focus on something. "said O ' Brien.

For the CEO, the company now has to go back to the basics and improve the functionality of the application. Currently, Viddy is recruiting staff and the number of employees has increased to 30. This month, the company also unveiled an app based on Google's Android platform and plans to launch an upgraded version early next year. O ' Brien Frank is not frustrated by the company's ups and downs, and the company from "learn a lot."

Unwilling to decline LivingSocial

For group buying website LivingSocial, 2012 is the business "shrink" year. The Washington Group-buying site was on a hot ride last year, competing with rival Groupon. LivingSocial raised 580 million dollars. The company's latest round of financing took place in December 2011, with a total of 176 million dollars for venture capital funds. LivingSocial used the money to expand brand awareness and to distribute advertisements everywhere.

In the summer of 2011, LivingSocial also talked with bankers about IPOs and plans to raise 1 billion of billions of dollars, people familiar with the matter said. It can be said that LivingSocial vowed to do all the preparations for the listing. But when Groupon's stock market plummeted, people questioned the group buying site.

The company then shelved the IPO plan, and its market capitalisation slipped. Amazon holds a stake in livingsocial29%, claiming that LivingSocial's book value plunged from $1 billion in June to $3.24 in September. Groupon's share price has fallen by 80% since the IPO.

LivingSocial no longer play any TV commercials. In October, the company's third-quarter revenue loss amounted to $565 million trillion. Most of the recent losses have been due to a fall in the value of acquisitions.

Last month, LivingSocial announced layoffs of 400 people and moved the consumer services operation from headquarters to Tucson City, shrinking the office space as much as possible. Andrew Weinstein, a spokesman for LivingSocial, said a number of recent measures were aimed at controlling the fiscal situation.

At the moment, LivingSocial is also trying to stay away from Groupon, offering new, unconventional services, such as ordering services and cooking classes. LivingSocial investors are still optimistic about the company's development. In a October email to employees, CEO Tim Oshonis (Tim O "Shaughnessy") said September was the month when the company's first cash flow was positive.

"The next thing that happens is that the market is aware of the value of Groupon, or that we are constantly grabbing Groupon's market share." "It takes time to test it, but it doesn't matter," said LivingSocial's investor Jemiri Lu Jeremy Liew. ”

A maverick Kabam.

Kevin Chou, chief executive of game developer Kabam, wants to let the world know that Kabam and Zynga are different Kevin Zhou. "We are a company that has absolutely no business with Zynga. The 32-Year-old CEO said.

Kabam also accompanied the boom in 2006, when Zynga provoked investor enthusiasm for social gaming. Kabam at that time raised 125 million U.S. dollars, the current market value of 525 million U.S. dollars.

This year Zynga is in poor shape and investors are losing interest in gaming companies. Some investors say the reason for giving up investing in social games is simply that the growth momentum from Facebook and the iphone platform has disappeared. Most investors are cautious.

Mr. Zhou plans to make an IPO in the next year or two. Zynga is increasingly weak in social gaming, he says, and its most high-profile game is Facebook's reputation. Kabam currently has only 30% of its revenue from Facebook, and the rest relies on cooperative sites and iphone-type mobile devices. Kabam's main revenue method is to sell game virtual props.

Mr. Zhou said Kabam's growth was still very rapid, with revenue expected to exceed $160 million trillion this year, more than 60% in 2011. Zynga's book value fell 11% in the latest fiscal quarter.

"Over the past six months, the interest of bankers has increased," he said. In 2013, Kabam plans to develop 15 new games and launch a new service, but it is still out of secrecy.