V-Enable founder: Making sense of all the new 411 services
Last week, V-ENABLE got a big score. The company announced a deal with MetroPCS Communications (NYSE: PCS) to provide a mobile 411 service, which is based on a monthly payment. Keep in mind that the typical wireless operator may charge as much as $2 per 411 call.To get some more perspective on things -- and the 411 sector -- I had a chance to interview Dipanshu Sharma, who is the founder of V-ENABLE.
Q: How are things at V-Enable? What are you seeing in the free 411 marketplace?
A: V-Enable is doing quite well. Life at V-Enable is busier than ever. V-Enable is in the center of a business that is in transition. 411 is an age-old business and had not seen much innovation for decades. With the advent of local advertising shifting from yellow book to internet and now to mobile, the 411 business is seeing its share of innovation. There are three business models that are currently being practiced
1. Regular $1.50-$1.79 per 411 call (declining)
2. Unlimited 411 calling for a fixed price $2.99-$3.99
3. Free Directory Assistance (advertising supported)
Both unlimited and FREE DA models are seeing fast growth. The unlimited model allows users to talk to the operator without any annoying voice advertising and also limiting how much users spend on 411 per month. Free models takes all the cost away but users have to deal with voice ads.
Q: Congrats on the metro deal. What are some of the key takeaways?
A: Thanks Tom. MetroPCS is a very progressive and fast growing wireless carrier. Its unlimited model has worked well for it and its customers. When we started talking to the company, it asked us to provide something that it could give its customers more value for their money. We designed a Free 411 product for it that is available to any customer who has a $45 or higher plan with MetroPCS. Metro411 gives users FREE 411, Maps, Directions, Points of Interest etc. We have not added any voice advertising to the product. Rather, once a user conducts a search for a local business, we show up to two sponsored listings relevant to their search. Our click through rates on these sponsored links are three times the industry standard. We think it's because of the elegance of the user experience and relevance of these sponsored listings. By not adding any mandatory voice advertising, we are seeing extremely high usage per user per month compared to industry standards.
We are also live on ALLTEL. The company has offered its customers a $1.99 unlimited DA product. Both products are proving how the $1.50 per 411 call model is giving way to an unlimited paid model and a free model.
Q: Also, your thoughts on the Nuance/Jingle linkup? Might we see some consolidation?
A: Nuance Communications Inc. (NASDAQ: NUAN) had been providing voice directory automation to Jingle for some time. This closer ties allow Nuance to take the voice utterances of users using the Jingle system and improvise their automation. Microsoft (NASDAQ: MSFT) bought TELLME earlier this year, which is the big voice automation player in the directory business.
I think Jingle has done a fabulous job with its product. It gets millions of calls each month and the traffic is continuing to grow. Public knowledge is that it is close to breaking even on a per call basis. Once it does reach break even, I see the company as a natural buyout target. Since the Jingle product (FREE-411) touches consumers and is more of an advertising avenue than voice automation product, I see their M&A partners as Yellow Page companies or search companies, like Google (NASDAQ: GOOG). Jingle could also choose to be an aggregator by buying companies like Ingenio (for pay-per-call advertising) and go public.
Tom Taulli is the author of various books, including The Complete M&A Handbook
