Analysis: What’s Behind Facebook’s Friendfeed-Style Acquisition of Beluga?

Facebook added yet another small group of talented developers and product managers to its stable today with the acquisition of Beluga.

With Facebook’s focus this year on bolstering its mobile platform and offering a Messages product that seamlessly ties the web and mobile together, Beluga is a nice fit with the company’s overall direction.

Also, with Facebook acquiring not only the Beluga team but the startup’s technology, the acquisition resembles the way the company bought Friendfeed in 2009 and kept its service alive indefinitely.

Here is a bit of context for how to think about the acquisition:

Group messaging, while hyped, is actually not a cheap business to run: Compared to most of the consumer-oriented startups we usually write about, group messaging has high operational costs beyond covering headcount without the immediate cashflow.

The business that is benefiting most financially from the group messaging wave right now is not Beluga or rival GroupMe. It’s Twilio, which is likely making a mint from charging these startups for API access when they need to plug in SMS. Twilio’s standard rate to send or receive a text is two cents per message although there are cheaper deals for high-volume access. GroupMe said it was doing about 1 million messages a day two weeks ago. While we don’t know details on GroupMe’s Twilio deal, it’s no wonder why the company had to raise $10.6 million from Khosla Ventures in January. Beluga sidesteps many of these costs by resorting to SMS only when a user doesn’t have either the Android or iPhone app, but their costs were still sizable.

That said, SMS is a major cash cow for the carriers. Disrupting it could be a large and lucrative opportunity.

Facebook and Beluga probably weren’t in acquisition talks as of three weeks ago:wrote an article about the company’s savvy combination of mobile and social virality tactics three weeks ago after hearing that the Facebook mobile team was impressed with Beluga. When I mentioned this compliment to co-founders Ben Davenport and Lucy Zhang a few weeks ago, they seemed flattered and surprised.

>> Continue reading on Inside Mobile Apps.

Tumblr Marketing

Mediabistro Course

Tumblr Marketing

Starting December 1, learn how to market using the most popular visual blog! In this course, you’ll learn how to develop a strategy for your own Tumblr account, get people to read and share your content, and integrate your marketing efforts with other social platforms. Register now!

 

Leave a Reply

Get the latest news in your inbox
interested in advertising with inside facebook?

Social Media Jobs
of the Day

Sr. Editorial Content Manager

Amazon
New York, NY

Social Media Specialist

Penske Media Corp.
Los Angeles, CA

Social Media and Online Assistant

Education Management
Chester, PA

Web Content Creator

John Paul Mitchell Systems
Los Angeles, CA

Featured Company

Join leading companies like this one and recruit from the nation's top media job seekers on the Mediabistro Job Board. Every job post comes with our satisfaction guarantee. Learn More
 

Our Sponsors

Mediabistro A division of Prometheus Global Media home | site map | advertising/sponsorships | careers | contact us | help courses | browse jobs | freelancers | content | member benefits | reprints & permissions terms of use | privacy policy Copyright © 2014 Mediabistro Inc. call (212) 389-2000 or email us