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Posts Tagged ‘tipjoy’

It turns out there is more to the story behind the sudden demise of Tipjoy. The micro-payments service was trying to sell itself, according to a source with direct knowledge of the attempted transaction, and even got an all-stock offer from Facebook nominally worth around $5 million. The deal fell through when Facebook walked away.

But Facebook didn’t walk away completely empty-handed. It managed to hire Tipjoy co-founder and CTO Ivan Kirigin instead. After the acquisition negotiations fell apart, Facebook reached out to hire Kirigin. They made him an offer, and he accepted. It is not clear what he will be working on, but Facebook Payments would be a good guess.

Some investors weren’t too thrilled because Tipjoy was still in discussions with other potential acquirers (including Twitter and PayPal). But once Kirigin was out of the picture, the other interest evaporated.

All of this brings up a real dilemma for small-app startups. If all Facebook or Twitter has to do is hire one or two key people instead of buy the whole company, then it will be hard to capture much value in the long run.

As for Facebook, building its own social payments platform makes a lot of sense. Kirigin and his co-founder (and wife) Abbey, spell that out in Tipjoy’s farewell post:

We strongly believe that social payments will work on a social network, provided that they’re done within the platform and not as a 3rd party. . . . we know very intimately the difficulties in gaining actual traction. The only way to get around this is for the platforms themselves to control payments - then all people wanting to operate on that platform would have to play along. We believe that a payments system directly and officially integrated into social networks such as Twitter and Facebook will be a huge success.

Now Kirigin can try to prove that social payments can succeed within one of those larger platforms, Facebook, even though Tipjoy was better known as a Twitter (and blogging) phenomenon.

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When it comes to winning in the App Store, one PR firm has discovered a dynamite strategy: throw ethics out the window. Reverb Communications, a PR firm that represents dozens of game publishers and developers, has managed to find astounding success on Apple’s App Store for its clients. Among its various tactics? It hires a team of interns to trawl iTunes and other community forums posing as real users, and has them write positive reviews for their client’s applications. Yeah, that 5-star iTunes app review you saw for the once top-5 paid app Enigmo? It might not be written by a real user, but rather by Pangea Software’s PR firm. Reverb isn’t the first to try and game the user review process, but they are definitely one of the most blatant cases.

Reverb Communications is an extremely successful PR firm that claims to have “first party” and “personal” relationships with Apple. Aside from representing Pangea Software, one of the more successful App developers for the iPhone (they made Enigmo, which was featured during the Apple WWDC Keynote 2008), they also represent Harmonix (the Guitar Hero and Rock Band guys), MTV Games, and a host of iPhone game developers. Additionally, they’ve managed to do an impressive job at courting the press: clients have had iPhone apps featured in just about every major media outlet known to man, including Forbes, MTV, G4TV, NBC (in fact, all the examples were for one developer: Publisher X, which Reverb happens to own). Reverb claims that their clients have sold over $2 Billion of product under their watch.

Tipjoy, a startup that allowed users to easily collect ‘tips’ from their readers and fans in the form of small Paypal transfers, is closing up shop. Earlier this evening Co-founder Ivan Kirigin posted a note to the Tipjoy blog announcing the site’s shutdown. Users with an outstanding positive balance will be able to cash out, but the rest of the site has been turned off.

Tipjoy tried to make web tips feasible by lowering the barrier readers would have to clear as much as possible — to leave a tip, users only had to enter their Email address, with no credit card needed. The amount of money left to a site was effectively a pledge to pay up at some point down the line (Tipjoy tallied up your tips so you could pay them all at once). Unfortunately, users often didn’t take the time to tip at all, and those that did usually didn’t actually pay up.

The company launched last year as part of the Y Combinator class of Spring 2008 and while it saw steady improvements, like a new API in May 2008, it was seeing slow uptake. Later developments included an API that allowed users to send payments over Twitter, and a useful premium Twitter app called Tata-tweet. It also attempted to expand beyond tips to become a more generalized payment service. But despite a solid run, Tipjoy was unable to gain significant traction.

From the site’s blog (be sure to read their post if you have an outstanding balance):

We have decided against continuing to pursue additional funding. After a long and hard look at the market and the situation, we didn’t feel it made sense.

When we evaluate why there’s been so much hype about payments on Twitter, and yet so little traction for us (and even far less for our competitors) it is clear to us that the reason is that a 3rd party payment service doesn’t add enough value. We strongly believe that social payments will work on a social network, provided that they’re done within the platform and not as a 3rd party. “Simple, social payments” is *the* philosophy needed to do digital payments right, but once a service groks that, they need only to implement it on their own. We’ve been the thought leaders in this space, we see the hype and excitement, and yet we know very intimately the difficulties in gaining actual traction. The only way to get around this is for the platforms themselves to control payments - then all people wanting to operate on that platform would have to play along. We believe that a payments system directly and officially integrated into social networks such as Twitter and Facebook will be a huge success.

Thank you to everyone who has supported and helped us along the way.

If you have any questions, get in touch: help@tipjoy.com

Thanks,
Ivan & Abby - Team Tipjoy

Tipjoy has been added to the Deadpool.

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A few weeks ago, we wrote about the impending launch of Contenture, a monetization network for sites built around micropayments. The idea is that while traditional online advertising models work for some sites, others are better suited for custom-tailored approaches — and that’s what Contenture can offer. Today, it has launched its service is giving TechCrunch readers a special deal.

If a website owner signs up with the promotional code “techcrunch,” they will receive double affiliate commissions for a full year. A pretty good deal considering that because the way the network works, it’s in your interest to have more site owners sign up. That’s because the larger the network is, the more likely it will be that users sign up for Contenture accounts. And the more that do, the more you’re likely to get paid.

Contenture users pay a minimum of $5.99 a month, but can offer to pay more if they choose. Site publishers keep 80% of the money coming in to Contenture, while it keeps the other 20%, which is a pretty solid deal compared to other monetization networks.

The core of the service is similar to the idea behind TipJoy. That is, users paying a small amount of money to a site owner. But Contenture goes further, allowing sites to switch to a full-on “freemium” model, giving them the option to toggle certain features on and off depending on if a user has paid.

But because it is based around a monthly-fee, we could be looking at a chicken-or-the-egg situation. Users may not want to sign up for the service because of the limited number of sites available — while sites not want to sign up because of the limited number of users. But Contenture has made it very simple for a site to install and use their service — it’s just a small snippet of JavaScript that can turn on or off features based on if a user visiting the site has a Contenture account.

This type of model is no doubt a gamble, but it’s an intriguing one. As I wrote about a few days ago, I have no problem paying a certain number of sites that I visit often and love. But those were all web services, and not necessarily content-oriented sites. The large web services are likely to want to run their own freemium models — like what Pandora is doing. Contenture would be perfect for content-oriented sites, but a lot of users have hang ups about paying for content on the web.

That’s not to say that won’t even change in some form, but today that’s a tough sell. Micropayments could be a key to unlocking such a model, but a monthly fee is a barrier to entry.

Disclosure: Contenture sponsored our CrunchCam for a few hours a couple weeks ago.

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Former AOL Digital Chief and founder of startup incubator Launchbox Digital John McKinley’s mother fell ill recently and McKinley turned to the web to find answers on how and where to seek care for his elderly parent. McKinley found a distressing lack of resources that helped adults find the right care providers for elderly parents. He found that many of the existing services were targeted towards the care providers instead of the consumer, with services often focused completely on making sales commissions off of connecting seniors with care facilities. And McKinley found that none of the existing services offered a user-friendly web interface to find customized care. McKinley vowed to create a portal aimed towards the consumer and today, is officially launching OurParents, a free elder care matching service, focused on assisting adult children with aging parents find the right care solution that meets the parents’ and family’s health care needs.

OurParents’s transparency is derived from the site not making money from any matches that take place via the site. OurParents aims to provide an unbiased service that helps families sort through the decision of whether in-home care, a senior community, assisted living facility, nursing home care, or hospice care is best for their elderly parents. And the site does a lot of the fact-finding work for you.

OurParents offers descriptions, services, photos, quality ratings, price info, etc. for over 65,000 care providers and allows consumers to filter search results by location, cost, quality, distance and special requirements. Among the site’s features that are particularly useful to consumers when assessing a senior care facility are free detailed reports about each facility, which includes access to the Medicare ratings, detailed audit findings, community data, and information about nearby hospitals and clinics. Users can also access provider information such as real life stories about a provider, news stories, bankruptcy filings and nursing home abuse allegations.

OurParents includes a tool called the Care Options Advisor, that lets a person describe the circumstances about a senior citizen (health, age, priorities, etc.) in an entry form and be guided to the type of care options that make the most sense to consider. Once users pick a provider that they are interested in, OurParents will contact the care provider for the user. OurParents currently doesn’t advertise on the site but plans to make money from paid services the site plans to offer users in the future, including insurance and health related products.

Enurgi, which was acquired by health care provider Univita earlier this year, provides a similar service, but Enurgi is targeted toward connecting the elderly with home caregivers, a small segment of the elderly care population. And Energi took a cut of transactions that took place via its site. Because it’s completely free, OurParents is sure to be a popular destination for adults looking to find unbiased and detailed information on care for elderly loved ones.

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Say you have a group of individuals who all want to tweet from one account — right now, that’s a pain. You have to give everyone the password to the one account and have them log out of their own account and into this new one to use it. And even then, how do you know who is sending what tweet? You’d have to manually insert your own Twitter name at the end of your post or something along those lines. Now there’s a much easier way, and it comes thanks to a demo app.

Tata-tweet allows you to feed multiple Twitter accounts into one feed. When you do this, it will auto-append the name of the person tweeting to the end of the message. That means no more logging out from your account to send from the group account — and no more having to copy and paste the tweet if you also want to send it from your own. You can see this in action on the Y Combinator’s founders group account.

But there’s a slight catch: Using this app will cost you $0.99 a month. Yes, it’s a premium Twitter app. While those are a dime a dozen on platforms like the iPhone, they’re not so common on the web. And a monthly payment one is almost unheard of. But Tata-tweet is able to do it thanks to Tipjoy’s Twitter Payments API. This service extends Tipjoy’s social micropayment structure to the red-hot Twitter platform. And Tipjoy created this app to show exactly how it will work.

Pipping your accounts into Tata-tweet is easy, but you will have to have a group account set up that all of these tweets will be sent from. Once you have that, you click on the sign-up button and your TipJoy account is billed. It doesn’t require a credit card because TipJoy assumes that you’re good for the money. A word of caution: TipJoy will tweet out that you owe $5.94 (you have to sign up for 6 months at a time) for creating the new group account.

Tata-tweet is entirely open source, and you can grab the code at github. Tipjoy is running a contest through June 1 for the best apps created using this new Twitter Payments API — and according to TipJoy co-founder Ivan Kirigin, there are already plenty of good ones since Twitter is featuring it in the gadget box on the main Twitter homepage.

Kirigin bets that a lot of premium Twitter services will start popping up soon to make money on the popular platform. Yes, that will probably happen before Twitter actually makes any money.

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The poll results from yesterday are in, and it isn’t even close. 80% of you think Craigslist (46 million US visitors) is more important than South Carolina (4.5 million residents). Background on the conflict is here.

The numbers are obviously not statistically relevant since TechCrunch readers, a tech savvy lot, are going to be more likely to side with Craigslist. But South Carolinians (or whatever it’s supposed to be) apparently aren’t too thrilled with their state, either. The Palmetto Scoop, a popular conservative blog in South Carolina, held their own poll today and asked “Which is more important, 2,500 TechCrunch readers (the total number that had voted as of this post) or enforcing the law?”

As of right now, 60% of the 124 respondents say, well, TechCrunch is more important than enforcing the law (which isn’t really what the Craigslist issue is about anyway).

Your conservative voters have spoken, Mr Attorney General McMaster. We’ll draw up the secession paperwork for your signature.

Update: Just because it’s awesome:

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