Liz Gannes

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What Happened After SayNow Was Acquired by Google

As Google tries to make itself more like a start-up, some of the tech giant’s recently acquired and lesser-known entrepreneurs seem to be wielding disproportionate influence.

While companies acquired by Google often see their team disbanded and their product phased out (see: seemingly every small acquisition), or in rare cases get to operate independently (like YouTube and Slide), the founders of SayNow described in a recent interview how they have been able to “hit the ground running” since their start-up was acquired by Google in January.

According to sources familiar with Google, the SayNow team is now part of the larger Google social team based in the recently remodeled Building 1900 on the main Google campus, on the same floor where Google co-founders Larry Page and Sergey Brin recently moved their offices.

The SayNow founders–CEO Nikhyl Singhal and CTO Ujjwal Singh–didn’t confirm that but they did say that their team is all sitting together and working on “concepts around real-time communication and voice.”

SayNow was founded in 2005 “to build voice-based experiences that are fun and social.” Its underlying premise was that phone numbers and devices would lose importance as communication became more about people.

Its biggest success was the Soulja Boy single “Kiss Me Thru the Phone” in 2008, which told listeners to call “six, seven, eight, triple nine, eight, two, one, two” to reach the artist (well, really his SayNow recording). The number was dialed 60 million times, which should make it eligible for the Guinness Book of World Records, said Singh (pictured at left).

But the celebrity stuff peaked in 2008, and SayNow had more recently been experimenting with mobile apps. Not the kind of functional, straightforward applications Google is associated with, but stuff like Chip Chat, an iPhone and Android app that helps users transform their voices to sound like chipmunks when they called their contacts. Users had to pay after a certain number of minutes, and could also choose other voices, like Darth Vader.

“We were seeing enough success,” said Singhal, “but it wasn’t clear that we should go build 50 apps. Turning that into an independent thriving business was challenging, because audio is tough to advertise into. We knew we needed more capital and we knew we needed more help.”

A source familiar with the company said SayNow had a round of venture capital on the table as well as other acquisition interest when it signed the deal with Google.

Though the price of the SayNow acquisition wasn’t disclosed, multiple sources said it was in the tens of millions of dollars. One described it as “positive but not a grand slam” for the company, which had raised $7.5 million in 2007 from Shasta Ventures and Tugboat Ventures, as well as additional undisclosed funding from Altos Ventures in 2009.

(Tens of millions is at least the right ballpark; according to financial filings, Google spent $148 million on acquisitions in the first quarter of this year, seven of which were announced.)

SayNow released a new product more quickly than any newly acquired company in Google history, at least as far as its founders know. On January 31, a week after the acquisition was announced and while Internet access in Egypt had been blocked to counter anti-government activism, SayNow launched Speak2Tweet, which automatically transcribes voice messages and tweets them.

Now, SayNow is building new communication products that the founders say they expect will ship very soon. “For a number of reasons we were lucky enough to have a much quicker pace [than many acquired companies]. Our technology and expertise were leveraged instantly,” said Singh.

Why is SayNow thriving at Google? It’s some combination of right place, right time and right attitude. “We were acquired at a point when we hadn’t seen our vision become a reality so we were still interested in making that happen,” Singh said.

Singhal (pictured at left) said it also mattered that SayNow avoided integration problems–because its products have been taken offline. SayNow’s field is also more ripe for start-up influence: communication as a Google product is “version 1.0” as compared to search and ads, which are more at “version 8.0,” as Singhal described it.

Plus, he said he told Google a few magic words upfront:

We are very interested in working on the hard problems that Google faces, and not necessarily the hard problems that SayNow did. The last thing we want to do is be on the sidelines working on our own thing where nobody’s responsive to it.

Now, a few months after the acquisition, Singhal said, “We have an opportunity to change the world, we have a safety net, we have a budget. We had 17, 18, 19 people at the company [when we were bought], and there’s 60 to 70 people we touch [at Google] every day who we would have died to hire.”

Plus, the SayNow founders said, they don’t have to worry about that pesky issue of revenue!

What about downsides? “It’s a culture shock,” said Singhal. It does take longer to get things done at a company worth hundreds of billions of dollars. “Google’s going through a transformation to go back in time to try to be a start-up, so you see lots of weird anachronisms,” he said.

Certainly, Google had its reasons for allowing AllThingsD access to a happy acquired company, rather than folks who are ready to quit and biding their time before they move on. And who’s to say the honeymoon will last forever. But the SayNow founders do seem authentically thrilled to be part of the Google Borg.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik