A Lesson From the Sale of Summize
So by now you may have heard that Twitter has purchased the search engine Summize for a deal worth an estimated 15 million dollars, according to Silicon Alley Insider. For more on this story, check out the article “Twitter Buys Summize For About 15M…“
This of course comes as good news to the five founders of Summize who are currently based in the D.C. metro area. This story is good news to us here at Feedback Secrets as well since we are a start up based in the D.C. area… GO D.C.!
The important question is, what does this story mean for entrepreneurs with small online businesses? I think the lesson in this story is something that has been suggested before on this site, which is that “You Can Always Monetize Web Traffic“.
Looking at the sale from a technology point or view sparks some interesting questions. First of which is, why in the world didn’t Twitter just create there own Summize clone to compete with Summize. I don’t think that Summize created some technological marvel, that in terms of their algorithm would be near impossible to duplicate.
Rather I think that they had a great idea for a site, and they ran with it. If someone wanted to create a Summize clone and outsource the development overseas I would think that $100,000 would certainly cover the initial development, with more money probably necessary for maintenance and continued development.
So why pay 15 Million Dollars for something you could create for yourself for a fraction of the price??? The number one reason that comes to mind is… Traffic. You can make a clone, but you can’t guarantee that people will use it. Why would they switch when they are already used to using Summize?
In the alchemy of online business, traffic is the most important ingredient. If you can gather it and channel it, then I have few worries about the success of your online business.
