Web18 and Burrp’s cozy relationships were the talk of the town since the last few months and the acquisition deal is just a formality to what the industry was already aware of (Burrp powers In.com’s MyCity section as well) .
Infomedia India Limited has informed the Exchange that the company has acquired the local information and social media business of burrp! Software Pvt Ltd on going concern basis including the ‘burrp’? brand with effect from March 15, 2009. The management believes that the said acquisition will create an important asset for the Company’s local search initiatives in the emerging media space – Infomedia18
Burrp raised fund from Web18 CEO and even operationally, they were using WEB18 premise – so the acquisition doesn’t come as a big surprise.
While Burrp’s traffic seems to grow at a good rate, they have hit a sort of ceiling in terms of category (pretty much covers all the lifestyle businesses) – but the challenge is they are still small compared to their competition in local search space.
Most importantly, catering to lifestyle category makes them dependent on suboptimal ways of monetization (i.e. display ads), while the big money in local search comes from lead generation.
Why is Burrp Important for Web18?
Because Web18 wants to get into local search (read our quarterly analysis : Web18’s IPO Filing @ Nasdaq, to Launch Local Search) – and Burrp provides the apt vehicle for the same.
Web18 needs to grow it’s umbrella brand and figure out monetization opportunities beyond display ads (and Google adsense). Combining Alibaba partnership and Burrp’s data is what will jumpstart Web18 into local search market (Burrp in it’s current avatar serves the most searched category, i.e. lifestyle, but the irony is that monetization happens for services categories (for e.g. packers & movers, courier services etc).
Most importantly, Burrp to a very large extent has cracked the data collection challenge – the icing on the cake is it’s loyal userbase and the quality of UGC that they have achieved in the system.
Anyways, this is India’s first web2.0 story and we congratulate Burrp for their achievement!! Congrats Deap and the entire team.
What’s your opinion on the deal?
Recommended Read: Detailed coverage of local search market in India