Analyzing asklaila–Is It Time They Get Acquired?

[First thing first - this is purely a speculative article, owing to few market conditions and how some companies have evolved in the last few months. This article is part of Startup To SME series, which we started a few months back and will bring more perspective in the coming days.]

Coming back to the title of the article, well, lets first take a look at asklaila and how the company has performed in the last few years.

- Till 2009, they were the data leaders (for Bangalore, they served better results than Justdial). The quality of data collection asklaila did was remarkable and we also called them (one of) our ‘favorite’ startup of the year. They were the only company that I’d say was a real competition to Justdial.

- While the product was done very well, monetizing local search queries on the Indian web has its own challenges.

No matter how hard Google and other ad networks have tried to serve “contextual ads” on your site, clickability is extremely low. It continues to be the silly impression game and unless your traffic is putting the likes of Yelp to shame, forget about it. Did I hear “a solution for small and medium businesses”? What does the “solution” do? Well, “it increases the visibility of a business”. Oh, I see. You know what – it is not the business that needs a solution; rather it is your business model which actually needs one. Efforts to sell such online solutions to local businesses go in vain. And rightly so, because there is no accountability matrix. Transactions is all a business cares about. If your platform doesn’t guarantee that, then its useless for them. Sounds like a conventional lead selling model? Yes, it is. Selling leads generated via their online and voice platforms is the primary source of revenue for several “successful” local search players. Do you want to be one of those? Nothing wrong, but, scaling such businesses is a nightmare – it means building a huge workforce, 1000?s of people as feet-on-street collecting data and several hundreds in your sales force. (read: Facts & Myths in Indian Local Search Space [Insights from an Insider]).

- asklaila took the conventional route in 2009 and launched call center based voice search service, which has been shutdown now.

- Monetization: Stuffing Google adsense in a local search portal ain’t that cool, unless you want to be a pure content player. Local search is best monetized by lead generation and asklaila failed to monetize the data it collected over the last few years. Running adsense does give money, but not the one you mentioned in your business plan.

asklaila

- Team: B K Birla, CTO has quit asklaila and is onto his new startup.

To cut the long story short, not all is well with asklaila and though the company raised $10mn from Lightspeed Ventures (in 2007), raising the next round is surely not easy.

asklaila’s Big Plus?

I believe the consumer brand that they have created is unmatched and though they are mostly popular in geeky world, they have an opportunity to take the brand to a much deeper level. Moreover, the team has demonstrated that you can create a consumer brand by spending on backend (i.e. without spending a lot of moolah in ads etc).

Up For Acquisition?

Now coming back to the title of this post, I strongly believe that it’s time for asklaila to get acquired and maybe, a possible suitor could be Via.

Why Via? Very simple:

a. Via launched deals site and they have big plans for it. Having said that, Via needs a consumer brand and deals.via.com is surely not it (will take them a while to build traffic to the site).

b. Via needs a company with same ATD (attention-to-detail) as them, especially when it comes to backend. And asklaila is surely the one.

In short, asklaila needs to switch the gears and they (probably) need an external hand for this. As far as Via is concerned, they need a vehicle to grow the deal service/consumer business. The what/when/for how much is something that I won’t speculate, but all I know is that it does hurt to see Google adsense on asklaila site (context: I was one of the early adopters of asklaila +  I was product manager for Y! local service).

What’s your take?

[Startup->SMEs– A series where we will take a look at startups that we profiled 2-3 years back and analyze their current status/performance (i.e. if they have transitioned from startup to SME or still stuck in the chakravyuh). If you want us to review any particular startup, do let us know via the contact form]