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WebSideStory files for $57.5 million IPO. NEW YORK - Web site analytics company WebSideStory Inc. added its name Thursday to the growing list of tech companies planning to go public, filing registration papers to raise up to $57.5 million through an IPO (initial public offering). [InfoWorld: Top News]

"Last year it had a net loss of $1.9 million on revenue of $16.4 million. The company squeaked into the black last quarter, turning a profit of $141,000 on revenue of $5 million." (InfoWorld)

Omniture, which is probably WebSideStory's leading competitor is a Utah-based company which raised $14.5 million recently from Hummer Winblad and other investors. The Salt Lake Tribune reported Omniture had revenues of $8 million last year and is shooting for $20 million in 2004, which puts it right on the heels of WebSideStory with it's recent $5 million quarter.

Mistakenly, however, the Tribune also reported that Josh James and John Pestana sold MyComputer.com for $57 million in 2000. They probably learned that from the Utah Technology Report. What that report didn't say is that the sale to NetObjects did not actually close. Oops. That's why I subscribe to the Deseret News. (Just kidding)

Actually, Dave Politis' article in the Deseret News was far better, but it was also slightly inaccurate. Omniture has had a connection with Hummer Winblad for a long time through Eliot Jacobsen, who was until recently COO of Omniture. But I'm sure the John Mellor connection also came in handy.

Omniture is an outstanding company with superb web analytics services. I've helped several companies implement Omniture SiteCatalyst and have found the service extremely powerful. When they landed MyFamily.com as a client, they actually used one of our best internally generated ideas to make their service even better.

With Omniture's momentum in landing big clients and likely its stronger revenue growth, it will be interesting to see if WebSideStory can actually make it out this time around. (They pulled their previous IPO in about October 2000).

5:48:58 PM comment [ 0]

I blogged last week about how Google will dramatically affect Microsoft's profits in the future as they give away more and more services that Microsoft currently sells. (I have some experience with disruptive business models because in 1998 we developed a strategy at Ancestry.com to give away for free everything that FamilyTreeMaker/Genealogy.com sold and to make our money from a new online subscription service. It worked beautifully. Last year MyFamily.com/Ancestry.com made almost $100 million in revenue and acquired Genealogy.com in April.)

I got carried away into wondering if after providing free email with a full gigabyte of storage, Puffin (the free desktop tool to search all your local files) and all the other services that are being developed by Google Labs, if they might eventually provide a free open source OS and office-like suite. My readers disagreed strongly, but Per Soderlind offered his opinion that Google will offer free hosting next:

I belive the next natural step after Gmail, is a free "Gweb". They have the platform for hosting it. I'm glad I'm not in the hosting business any more :-) Per Soderlind

That does make a lot of sense.

This morning another big thought hit me. I realized that if Google--the most disruptive internet company in the world--acquired Skype--the most disruptive telecommunications company in the world--that magical things would happen.

Skype (free internet telephony developed by the founders of KaZaA) raised $18.8 million in March and has had more than 12 million downloads so far. CEO Niklas Zennstrom said last month that about 850,000 people use Skype each day.

I wish I were one of them. I downloaded Skype, bought a nice USB headset, and invited colleagues to use it with me, but alas, it hasn't caught on. So I am waiting, along with most of planet earth, for either everyone to join Skype, or more likely, for Skype to finish its technology which will enable me to begin a call on my PC and have it terminate on a land line. Then I will use it probably dozens of times each day.

I honestly don't know what the Telcos will do. How do you compete with free peer-to-peer calling and free five person conference calling? I'm guessing that Skype will give away basic calling and five-person conference calling for free, get millions of daily users, then upsell these users on premium services, such as voice mail, real-time language translation, or a variety of other value-add services. Maybe they'll even let you pay to have all your phone conversations recorded and accessible via a powerful audio search engine. Who knows?

I can't wait to buy a Skype mobile phone that works with any wi-fi hot spot, so that I can have unlimited local and long distance calling for a very low monthly fee.

So here's why a Google/Skype combination would work:

1. Google will have nearly $3 billion available in the short term; they could invest as much as Skype needs to finish building out the technical infrastructure so that Skype users can call any phone in the world.
2. Google has hundreds of millions of users and could dramatically increase the number of Skype downloads and therefore exponentially increase the value of the Skype network.
3. Google already offers voice access to some of its search and news services; but they could integrate voice activated queries and audio responses from the Google servers into the Skype service. It would be amazing to drive down the freeway with my Skype mobile phone and Jabra earpiece and say "search Google for Mexican restaraunts in Sandy, UT" and have it retrieve and tell me all the listings. Or a million other more important queries.
4. Even more important to me, I want Google to offer me audio access (both send and receive) to my gmail from any phone, and I want it to be free. I remember when Onebox.com did this back in 1999. You could send a voice email message from your phone. It was so hot that Phone.com paid $850 million (in bubble money, of course) to acquire them with only 2.5 million non-paying customers. I'm guessing that the Skype infrastructure would make this possible with no long distance charges.
5. Google may someday develop audio search engines that could access all of my previously recorded email messages and phone conversations (and meetings that I tape on my iPod with the Belkin voice recorder accessory). Owning Skype would give them a lot of audio data to play with in their Labs.

Last week I predicted Google's market cap will surpass Microsoft's in 10-15 years. I think a Skype acquisition would make this far more likely since telecommunications is a $3 trillion market, and anyone who disrupts it could get billions of customers and make a fortune.