Talkr Sold – New Owners Plan To Make Money Via Audio Advertising

Last month we reported that automated text-to-voice service Talkr was put up for sale, by founder Chris Brooks. Well Talkr has just been acquired – by a company who found out it was for sale via Read/WriteWeb! The buyer is LiveOnTheNet, a Huntsville-based digital media company which is developing a new social networking VoIP product. They decided to buy Talkr because of its synergies with their new product.

The sale price is not large, just $25k up-front plus a $25k earn out for a 100% buy-out of Talkr. The low price (by industry standards) probably indicates that Talkr was more of a ‘feature’ than a business, long term. We discussed in our previous post about how Talkr struggled to get a revenue stream going, a common affliction of ‘web 2.0’ startups. And Chris admitted to me after the sale: “I’ve come away from this experience with a new respect for the importance of focusing first and foremost on revenue generation!”

But still it’s interesting to see how LiveOnTheNet will implement the Talkr technology. LiveOnTheNet has been doing streaming webcasts since 1996, according to its History page. For example they produced the webcast of the 1996 Democratic National Convention and they were the first official webcaster for the Cannes Film Festival.

I spoke to LiveOnTheNet CEO Roger Schneider and asked him about the deal. He firstly told me how blogs played a role in the decision:

“For the record, we did indeed learn about Talkr via your blog… and positive mentions of Chris and Talkr in other blogs also helped us reach our decision to buy.”

Robbie told me that over the past 10 years, LiveOnTheNet has “generated close to $50 million in online revenue, and over $20 million in the last 3 years.” So it is a thriving and growing online business.

How will Talkr be integrated into a new product?

So how will LiveOnTheNet use Talkr? Robbie told me they’ll be integrating Talkr into their new “embedded conference call technology”. It’s basically a VoIP product that runs in the browser via Java (so it requires no downloaded software, apart from the latest version of Java). They’re calling this an “embedded softphone” and it will support live, spontaneous voice chats among lots of callers.

Right now the service is not released, but Robbie said that it will extend on Talkr’s current functionality. He explained:

“…bloggers can sign up for the existing Talkr services and do automatic podcasts of their content, for example. And very soon, they’ll be able to place a new “Talkr” on their blog and conduct conference calls with their audience on topics of interest. Or even just let the audience talk amongst themselves about the blog’s content.

Also, a group of Web 2.0 blogs can all place a Talkr on each of their blogs, all pointed to a common conference, and all the audiences can share a single conversation on Web 2.0 topics.

These conference calls can be password protected (optional) and other things, of course.”

As well as blogs, the service can be used on social networks like MySpace and YouTube. Future functionality will include the ability to mash-up the softphone with webcams, Meebo, Flickr, etc.

Getting the elusive revenue stream…

The new softphone-Talkr service will be supported by audio advertising, “with a simple pre-roll audio clip inserted as each person enters a conference call.” That advertising revenue will be shared with bloggers.

Which brings us back to the main issue plaguing web 2.0 entrepreneurs today. If Chris was unable to achieve an audio advertising revenue stream from Talkr, how will it be different for LiveOnTheNet? Robbie told me:

“… a vital step for attracting advertising, as we’ve seen in the past, is getting a critical mass of viewership (“when you get to 30K uniques, we’d be glad to place some ads”). So, we’ll be tackling this with 2 products instead of just one and hopefully, giving bloggers an exciting new way to interact with their audience and fellow bloggers.”

However these revenue expectations appear to depend on how the big Internet companies move forward with the nascent audio advertising industry. In particular, Google’s announcement in December that they are expanding from text-only internet ads to audio ads. LiveOnTheNet sees this move by Google as an indicator that audio advertising will become a viable business model in the near future.

Summary

Overall, it seems like a win-win for both Chris Brooks of Talkr and the buyer LiveOnTheNet. While it was by no means a YouTube-like lottery win for Chris (he probably only covered his time and cost expenses with the sale price), at least he got a reasonable payment for all his work on Talkr. And I’ll be watching closely how LiveOnTheNet goes about trying to create a revenue stream from their new softphone-Talkr product. How do you think they’ll go?