Hipcricket’s Ivan Braiker to Chat about Ads, Commerce at Mobile Madness NY
João-Pierre S. Ruth11/26/12Follow @jpruth
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Innovation will only carry a business so far without a plan to grow—and that can mean seeking out a partner who brings different technology and expertise to the table. In late summer 2011, Hipcricket decided it was time to make such a move when it agreed to be acquired by New York-based Augme Technologies.
More than one year after the deal, Braiker says his mobile marketing and ad services company has grown to become the epicenter of Augme’s plans. And that leaves Braiker well-positioned to talk about how the explosion of mobile computing is affecting advertising and e-commerce, along with other innovators at our Mobile Madness New York conference Dec. 4.
On its own, Augme had developed a mobile Web ad platform. Born in the Seattle area, Hipcricket was known largely for QR codes and SMS marketing. By marrying Hipcricket’s technology with Augme’s know-how, Braiker believes the combined company, which specializes in targeted ads, can stand out in the ever-changing landscape. “As a single-source provider, we’re in a relatively unique position,” he says. Combining Augme’s and Hipcricket’s services also means the company faces competition on a variety of fronts. “Each competitor is working at a different angle,” Braiker says.
Braiker now serves as president of Augme, whose clients include retailers such as Macy’s and media companies such as Clear Channel. He says the mobile ad market is always churning with new technology and strategies.
For example, he points to Los Angeles-based Rubicon Project, which aims to automate the buying and selling of online advertising in real time through its trading platform. Braiker says Rubicon serves a different segment of the market than this company, which deals primarily with targeted ads; however, he sees more fragmentation coming to the mobile ad industry. “I met with some people for coffee, and they are creating a platform for a commodities market in interactive advertising and mobile is a part of it,” he says.
There may be more deal making in the future as Braiker and company consider gobbling up peers with innovative ideas. “This coming year Hipcricket and Augme will look at companies we can acquire and add on to what we’re doing,” he says.
Great post Mv....This is very encouraging. IB has great visibility into our pipeline and knows the with great accuracy the profitability of each opportunity at hand. Augme has made very smart decisions in acquisition with GEO remaining to be seen. They would not be thinking about buying other smaller niche companies, specially under watchful eye of BH, if there wasn't significant source of revenue that was heading our way by way of larger contracts, settlement, or licencing. Having an eye on the market and competition to see what can make their existing platform stronger and more unique is very encouraging in that the management has not decided to take defensive position and close their eyes to innovations. With every changing landscape in technology and the shifting and position of the new era of mobile computing we need to keep abreast of changes that can derail a small company like us. IMO we are on the right track both fiscally and goals to keeping the leadership position when it comes to technology and innovation. I just hope we pay the right price for any new acquisition.
Sentiment: Strong Buy
"There may be more deal making in the future as Braiker and company consider gobbling up peers with innovative ideas. “This coming year Hipcricket and Augme will look at companies we can acquire and add on to what we’re doing,” he says."
This kind of scares me and just screams dilution.....
hey michael, our little cricket came to be in the AUGT fold. through that type of thinking.PA just strayed to far in another direction. .. growth, when acheived at the right time can be painful yet rewarding.
think about it, if i dont spend money on lawyers i might just have enough to keep the lights on and go shopping to expand revenue. now thats a plan, is it the ib plan?
michael, just the opposite for me. This screams accretive growth. You shouldn't fear dilution if it means the value of what you hold increases in the process.
I also do not think IB would say something about acquisitions, unless he, and others believe that it is very possible, and a very positive thing to do.
There was some discussion a few years back about the technology platform that Aug-cricket was building, that would allow others with innovative ideas to build upon, using an API of sorts. I know they produced a scripting language (augme-scrpit of something) to facilitate just such expansions. In other words, the AdLife and other platforms can accommodate other people adapting and building onto their technology with new and exciting ideas for growth and capturing a much bigger segment of the growth taking place. The other side of this is that their system is also 'bolt-on' capable to other enterprise systems like oracle's. So it can growth in more than one direction.
I believe in the technology side of this company. They build it for SAAS for one reason, they understood how the software industry works, and how to make money in it long-term. Contrast them selling licenses for the technology to others who use it to capture the more market with newer innovations, vs limited to just the old fashioned model where they have to be actively involved in every sale, transaction and customer relationship. That model is very limited by the size of their own sales staff (as jason points out). The real strength of the company is the technology, having pioneered it, and made it available for adoption by many others. Able to be integrated into other systems, or other systems build upon it. Aug-cricket is really a technology company above anything else, and long term (starting next year), that will become more evident.
Either that or finally a big time revenue generating contract is going to land.. I think we all can agree that the latter is a better alternative and I would argue it is more likely. Diluting at these levels doesn't seem like it would be in anybody's interest. Share count would have to increase enormously making uplisting almost impossible. I would only expect dilution perhaps after uplisting later in the year.
I was thinking the exact same thing Mike...and in this space, no way it's accretive. The structure of Hussey's contract seems to tell a totally different story though. I see no way they'd dilute at .55 to purchase any other companies. The only way I see that happening is if they receive an influx of cash from an NPE, are at or near cash-flow breakeven and invest a small portion of the proceeds to buy a small niche company.
I call it expanding the core biz to service even more of what people want.. if you can find the correct fit for even higher multiples of income... your growing the biz.much faster than just sitting there on your hands wishing for something bigger to happen... hehe moneymax3001
Sentiment: Strong Buy