Now that's contrarian: Amid enterprise fever, Qwiki turns away revenue to go for consumer play

By Erin Griffith , written on February 7, 2013

From The News Desk

The trajectory of search engine-multimedia-wikipedia-video-app-social-sharing pivot machine Qwiki looks a bit like a boomerang. The company moved from New York, to San Francisco, and back to New York. And now it's switched from a consumer web search play, to a B2B publishing play, to a consumer app again. It's been a well-funded journey, peppered with a win at TechCrunch Disrupt, incoming revenue from major publishers, a search partnership with Bing, an acquisition offer turned down and high level talent turnover.

Today the company is back where it started, NYC, turning down all future revenue in order to launch a consumer-facing app during a nuclear winter for consumer-facing apps. The company shut down its popular visual search product and its corresponding partnership with Bing.

Qwiki is now a video storytelling app available on iOS. The app looks great -- it groups together your photos and videos by event (it knows somehow) and in one tap, a video montage with music from your phone (or pre-populated licensed music), appears. It's usually around a minute long, and the options to edit and add filters and captions is there too. It's basically a fancier Vine. If Vines are user-generated Gifs, Qwikis are user-generated 30-second spots.

Here are a couple cool looking examples:

Play the Qwiki: Coachella 2012

Play the Qwiki: A Peruvian Adventure

Like I said, it looks great. I have no idea if it'll take off. Vine has exploded since launching, and it breaks half of the time and most Vines are ugly, shaky and lame. There are many good reasons why the "Instagram for video" bubble of 2012 didn't take off. Vine's successful launch could be traced back to the fact that it is now owned by a massive distribution platform, Twitter. That fact became even more obvious when, as Michael Carney reported earlier this week, Viddy canned its CEO over missing that deal.

Qwiki's CEO Doug Imbruce says Vine captures a "moment" via a new kind of behavior in the same way Cinemagram and Socialcam do. Qwiki captures an "experience." It is a value-added layer to an existing behavior, he says. The pitch has similarities to social collaboration video app Vyclone.

Storytelling is a hot buzzword right now and Qwiki fits into it. A single Instagram photo, Tweet, or Facebook status update does not a story make.

Imbruce began turning down money from platforms like ABC News, Yahoo and Time Inc., because he believes focusing on user acquisition for a consumer play is a bigger opportunity in the long term. The journalists at those media outlets can still use Qwiki's tools and embed their Qwiki's into their stories, and the company could eventually add a pro feature, he says. Once it builds scale with users, Qwiki could become a branding platform with native ads in the same way Facebook, Twitter, Tumblr and StumbleUpon do. Selling brands on branded Qwikis might be easier than, say, Promoted Tweets, considering how much a Qwiki resembles a traditional 30-second spot.

It's ironic that Qwiki would move back to New York to abandon its existing business model. New York's tech scene is often accused of being too focused on business models and money at the expense of visionary big ideas. Tumblr and Foursquare aside, haters often say that transformational web companies could not be built in New York because they would have felt too much pressure to take revenue before they got the chance to build something really big.

Imbruce said he personally did not want to move to Silicon Valley but once his company got there, it absorbed, by osmosis, a healthy dose of Silicon Valley irrationality while they were there. If they hadn't spent time in the Valley, they probably would have taken the acquisition offer (from an unnamed suitor) when they had the chance.

Now they've brought that irrationality back to New York, amid a sea of business-minded, revenue-focused companies. Their plan to enter a crowded space with a money-losing, consumer-facing app while such a thing is entirely out of vogue with investors is irrational and risky. If the company's roller coaster history is any indication, this precisely the way Qwiki likes it.