Can Video App Makers Cash Out Like Instagram?
Following Facebook’s $1 billion acquisition of photo-sharing startup Instagram, which makes it especially easy to share photos on mobile phones, The Wall Street Journal says speculation is rife that a video-sharing mobile app maker may become the next big acquisition target for a social media company.
Like Instagram, services like Viddy, Socialcam and Mobli are attracting millions in venture capital dollars, in addition to drawing millions of users. And like Instagram, these video services are revenue-challenged: "The biggest issue in mobile is monetizing," says Dino Decespedes, vice president of mobile video app startup Mobli, Inc., which counts actors Leonardo DiCaprio and Tobey Maguire among its investors. Mobile is "not a sexy place to put ads," he adds.
That, and the fact that video-sharing has not reached the same level of ubiquity as photo-sharing, has some investors wondering whether these video services will ever be able to cash out like Instagram. For one thing, video "does not have that zero friction adoption" that photos have, says Benchmark Capital’s Bruce Dunlevie. "It is a bigger, more gnarly technical problem."