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In the past years, the way we read news has been completely reinvented by a single company that started developing an application on iPad and soon expanded on all the other platforms. I am talking about Flipboard, an app that looked at the way we read newspapers and has moved it on an iPad, with a smooth and precise swipe. I started using Flipboard as soon as it was available for the iPad and that’s why for me, it’s still one of the top 5 iPad apps that anyone should have.
After that shy “hello”, the company went through a Series A, B and a C. The last round of $50 million with Index Ventures, Venture Partners, Goldman Sachs and other investors, brought the company’s valuation at 800 million (even though we all know that Flipboard has and is looking at a potential billion dollar one). In the last four years, they have raised more than $160 million.
The coolest thing about Flipboard is that it can be easily monetized without much effort. The ads that we see between a swipe and another are valuable and don’t distract the users’ attention on the content. That’s why I always smile when I look at them, because it also means that a company, which has introduced something completely new by innovating, is now making money.
However the big news regarding Flipboard is about the acquisition of Zite, its direct competitor. Zite, another news reader app, was acquired by the CNN for 25 million in mid 2011. The deal that has been closed is up to 60 million and it also includes the launch of custom magazines for the CNN shows. Now that Flipboard has one of its biggest competitor in its hands, it will shut it down and include some of the features on its main product.
It makes sense for Flipboard that wants to be the best and only news reader on the market. If they kept Zite alive, they would just hurt themselves by diversifying with two different products whose aim is the same. What it’s sad is probably the way the CNN hasn’t been able to keep Zite alive.
When a company that hasn’t anything to do with tech buys a tech company, the worst is to be expected. Even though Zite is in the same ecosystem that the CNN has built over the past years, we are still talking about building things and updating algorithms. Articles and News are just a tiny part, which the user can enjoy, that comes after having built an interesting product. Although the CNN has tried to push its content on the platform, I think, even though they haven’t disclosed Zite’s userbase numbers, they haven’t been able to scale and they ended up being stuck with the product.
On the other hand, Flipboard, with a billion dollar valuation on the go, now has over 100 million users, up from the 85 million last fall. The product generates 2.5 billion page views per month and it’s adding 250,000 new users every day. Although the market is pretty crowded, at the moment, Flipboard is still leading ages ahed of anyone with its product distributed on six different platforms, including Blackberry.
Facebook has recently tried to get into this market with Paper, a beautiful app that looked like the way Flipboard tried to reinvent content discovery. Even though Paper only integrates with Facebook and it’s available just on the iPhone, it still poses a threat to the Flipboard ecosystem, because it brings a momentum built on top of 1.2 billion monthly active users. While Flipboard is aggregating news from different sources, where users can build up their own feed, Paper is a lot more a curator, where users can choose just a set of predetermined sections.
The war is still open and Facebook has to constantly diversify if it wants to reach those five billion users that are still waiting, but Flipboard has completely overwhelmed this market and they’ll lead for the next years.
