If the weeks surrounding Facebook’s IPO were tense ones for SaaS companies built primarily on Facebook’s platform, they hid it well. When I checked the temperature with the CEOs of each of the big three–Buddy Media, Vitrue and Wildfire Interactive–none would admit any change or potential outcome of the IPO other than a wider legitimacy for their businesses.
Either that was bullshit, or two of the three took a Zuckerbergian approach on how quickly deals get done, because Vitrue and Buddy Media sold that month for hundreds of millions of dollars each to big, mature enterprise software companies.
Perhaps the timing was entirely serendipitous, perhaps the deals were done out of fear of missing out on the part of the buyers, perhaps the sellers (or more likely, their investors), saw the backlash brewing and thought their valuations were peaking. Regardless of the reason, each time, Wildfire’s typically reserved CEO Victoria Ransom offered cutting comments about her competitors.
“Vitrue’s product offering may get lost and de-prioritized within Oracle, and the integration activities may shift the companies’ focus away from serving customers and building products in the near term. We think Vitrue’s existing customers may start looking for other options,” she said when Vitrue sold.
“The exit from the market of both Buddy and Vitrue as standalone companies leaves Wildfire as the uncontested pure-play leader in the space. Our undivided focus on social marketing is a clear advantage for us,” she said when Buddy Media sold.
Each time it made me wonder if Wildfire had turned down those same offers or if the company had sour grapes because she hadn’t seen them.
Either way, her competitors are now working to keep their employees focused in those awkward, often confusing post-merger months before integration begins. Their PR people and CEOs will insist it’s all full speed ahead and business as usual but it’s never that simple. Having been an employee at two different companies that sold and one that was a constant source of sale rumors, I can attest that even in the best possible scenario, it’s still a distraction. It takes time for the sudden new leaders of your company to earn the same trust and respect as your founders did.
If there was ever a time for Wildfire and smaller players like ThisMoment, Involver, Syncapse, Shoutlet,
KickApps (update: KickApps was acquired) and Friend2friend to fire on all pistons, it’s now. I wouldn’t be surprised to see all of them rolling out new features in a mad dash to capture new clients in the coming months.
The problem, of course, is that the entire category is experiencing an existential crisis. Aside from the Nasdaq/IPO stupidity, the backlash against Facebook as a company is largely focused on the way it makes money. Which is to say, it’s a backlash against its ad business. Which also means its a backlash against any company that’s a facilitator of its ad business. That includes Buddy Media and Vitrue, now safely tucked into the balance sheets of its conglomerate parent companies, and Wildfire, existing on venture capital and profits it has reinvested into the business.
Moreso than Buddy Media, which had raised $90 million in venture backing, Wildfire is dependant on revenue growth for survival. The company, which reports estimate had comparable revenue and employee size to Buddy Media before it sold, has raised just $14 million in funding.
Wildfire has a few things going for it: For one, it’s a favorite of Facebook itself. Some of its initial capital came from Facebook itself and the company’s fbFund. Likewise, Facebook uses Wildfire to manage its own fan pages. Of course, I have no idea how that might translate to any direct benefits to the company beyond a nice badge of honor. I doubt Facebook would enrage its developer ecosystem by playing favorites and acquiring one. But it does lend legitimacy.
Secondly, it’s growing quickly–revenue from the company’s 13,000 customers increased 300% in 2011.
The space became very crowded as excitement over Facebook ads grew to a feverpitch last year. Now that the bloom is off that rose, I expect several smaller players to fade away, pivot, or merge. Wildfire Interactive is the largest remaining player and I’ll be watching closely to see what it does next.