Slide Sidles Up to Old Media in Search of New Revenue (Apparently, Max Cannot Live by SuperPoking Alone!)
You almost have to admire the shape-shifting–if not a wee bit slippery–stylings of Slide CEO Max Levchin.
The serial entrepreneur– whose current start-up has made him the massively-funded widget-king of Web 2.0–has signed distribution deals with Time Warner’s Warner Bros. unit, CBS and Comcast’s E! Entertainment channel to allow users of its new FunSpace Channels video service to look at clips from shows.
Slide’s other media partners in the new deal include Current Media, Hulu, Universal Music Group, as well as 236.com, Break Media, CollegeHumor, FUEL TV, Howcast Media, Video Detective and YouTube.
The FunSpace video service will recommend content based on how much users forward clips to others.
To make money, Slide will get a cut of ads sold by its media partners, according to a report in The Wall Street Journal.
Oh my, how incredibly traditional of Levchin (pictured below on a wacky magazine cover).
But it should probably come as no surprise that Levchin is singing a bit of a different tune these days, as the daunting task of actually building a sustainable business model and attracting long-term advertisers has dawned on him–and probably many other Web 2.0 wunderkinds.
“Television is a world advertisers love,” said Levchin in The Journal article–a quote in which you can almost hear the quarter drop and the connection made that trying to earn real money from sheep-throwing and SuperPoking is perhaps not the most stable of business plans.
Of course, it was only a year ago that the business model for the high-profile social-networking applications maker–loudly touted by him and others at the company–was centered around “user-initiated” ads and in consumers becoming “brand ambassadors” for products.
These kinds of unproven ad schemes seemed fanciful to me when I first heard about them, although they doubtless sounded great to the many investors who ponied up tens of millions of dollars in funding to give Slide an eye-popping and still-undeserved $550 million valuation.
At the time, I wrote:
Ah, brand ambassadors! Like perhaps being dispatched to a posting in the tenth ring of hell.
It seems, though, that the old canard about getting audiences to carry water for brands and loving it has found new life, as social networks and the widgets that live off them search for business models.
Now I am not against widgets, those small third-party applications that people can put on their Web pages on social networks like Facebook and MySpace, in general.
While there are now many too many, and most are simply features and not companies, some are actually helpful and substantive and introduce a plethora of innovation and features into a service like MySpace that the service itself would or could never have offered.
And I also think that these widget-makers need to find a way to make money, especially the very popular ones like Slide, if they are to stay around.”
That’s more true than ever before as the economy tightens and kooky experimentation is no longer tolerated.
In fact, Levchin noted in the article that Slide had dumped one of its typically fun but profitless widgets–a digital fortune cookie service.
Said Levchin to The Journal: “We asked ourselves, can they generate cash and are they going to be engaging to users a year from now?”
Um … no and no, which should have been obvious from the get-go about a lot of social-networking apps, which I had labeled juvenile and ultimately ephemeral.
While such goofy stuff has given Slide a lot of traffic–it attracts more than 160 million viewers a month–that has not necessarily translated into big revenues since much of the traffic is pretty low-rent and because the ads are limited by the big social-networking sites where Slide apps are popular.
One of the most striking things in the article was the contention that Slide expected $30 to $50 million in 2009 revenue, which is probably on the low side. To be fair, Levchin always told me he was not as focused on revenue generation as on growth.
But with this move, Levchin is now clearly focusing on revenue, and it’s long past time to do so.
Of course, with nuclear winter in advertising of all kinds approaching fast, let’s hope Slide still has a sheepskin or two around to keep warm until the thaw.
As an added plus, here is one of three interviews I did with Levchin last year, giving him somewhat of a hard time about revenue issues (and he gave back as good as he got):