Editor’s Note: This post was originally published on Seattle 2.0, and imported to GeekWire as part of our acquisition of Seattle 2.0 and its archival content. For more background, see this post.
By Matt Hulett
We have all read the stories of companies having a hard time raising money, laying off employees, and dare I say going out of business. One of the companies that the Startup Whisperer has been tracking has come up with another strategy — to merge with another company. It is not an unknown strategy. I personally went thru this experience many years ago with a company called AtomFilms (merged with Shockwave.com). Sometimes there are different reasons to do this other than the obvious – combining capital of both companies. The better reason is that the components of each company combine to be worth more than the sum of their parts.
I talked to such an company. My friend, Ben Straley, runs a company called ReachMachines. They just combined with another company called, Fyreball.
1. Can you explain why you decided to merge your company (ReachMachines) with FyreBall?
We felt the Reach Machines’ brand presence monitoring and media planning solution showed real promise. Good user feedback, emerging market need, willingness to pay etc. However, it was also clear that we
needed to extend the core capabilities considerably in order to realize its true potential to transform how online advertising is planned and practiced. Fyreball was in the process of shifting directions
and had developed an innovative approach to tracking content sharing. They also had a complementary set of customers, and an exceptional team. With the merger, we now have a powerful and complete solution
that is truly transformative and valuable in the current market. This is particularly important today when immediate and measurable ROI is a prerequisite for selling an online advertising service to
businesses.
We’ve named the combined company Meteor Solutions and you can learn more about who we are and what we do at www.meteorsolutions.com.
2. Please give us a brief overview of what ReachMachine does and FyreBall?
Our platform enables advertisers and publishers to measure and optimize online word of mouth with the same precision of search engine marketing and display advertising. The core technology tracks content as it’s passed along from user to user and site to site, measuring the number of unique visitors and conversions generated by this activity along the way. Meteor customers not only see the sharing graph for every user and every site updated daily bit also many of them are using our Ignite platform to create incredibly engaging and rewarding user experiences that encourage sharing organically. In several cases, our customers have seen the % of unique visitors coming to their sites through sharing increase from the low double digits to well over 50%. That’s pretty impressive performance considering the level of engagement of those new visitors and how much it would cost to drive such an increase in visitors using paid search or display advertising alone.
3. What customers are using your services today?
Meteor has been used to track word of mouth for several multi-million dollar marketing campaigns by major brands. Some of the top online, mobile, and games companies are using Meteor. The platform is being used by a number of early-stage companies as well. Any company that wants to measure and amplify the organic word of mouth around their content and marketing campaigns will see immediate benefits from Meteor.
4. Does this merger put you in a better capital position? In other words, do you need to raise money in 2009?
The merger makes the business stronger and a more attractive investment opportunity. We believe we can get to break-even with our current cash on hand provided sales continue to ramp of course. If we succeed in making that happen, then we’ll be in a better position to raise additional funds this year if it makes sense to do so.
5. Do you think that you would have merged companies in a stronger economy?
Yes. The combined solution makes a lot of sense regardless of the current state of the economy.
6. Any advice to the Seattle 2.0 readers on merging companies?
If your current business is not on a path to demonstrating traction in the form of revenues, then merging with another company is something to consider provided such a move will bring you both closer to a meaningful and sustainable run rate. In addition, merging can provide benefits in the form of reducing the combined burn of the two companies which is also an important consideration. Finally, merging can be a great way to bring together teams with complementary skills, expertise, and networks. Companies that are able to generate revenues, accelerate productivity, and operate extremely cost-efficiently have a great shot at riding out the tough economy and emerging in an extremely strong position. Merging is one path to achieving this goal.
