Jingle Patent on Ad-Supported 411

Here’s the release that cites the patent. The announcement of the patent won’t make Jingle any more profitable. However, it makes Jingle a more more likely acquisition candidate by a larger entity such as AT&T. Investors and others will now perceive the company — which is the market leader — as a more valuable company even though there might be some costly litigation ahead to prove the validity of the IP.

Here’s more from my SEL post:

The “cynical” view of the USAToday piece is that Jingle might be publicizing this patent as a way to interest, for example, an AT&T in acquisition talks. Jingle has raised more than $60 million from investors and while it’s the market leader the company is not yet profitable. It says it has perfected the formula to keep costs at $.15 per call, however it needs more ad coverage to monetize the increasing number of calls it handles monthly.

It will take a fairly massive “liquidity event” for Jingle investors to get their money out of the company: either an IPO, which has been discussed, or a big acquisition by a big competitor such as an AT&T or Verizon.

In a consumer market survey conducted last year for Jingle, comScore found a strong preference for free directory assistance over current carrier models where consumers pay. A full 74 percent of respondents said that would “probably” or “definitely” opt for ad-supported directory assistance over traditional directory assistance. Eighty eight percent said they would also likely use these free services more frequently.

Opus Research has forecast that ad-supported mobile directory assistance services will overtake traditional carrier mobile directory assistance in the next three years in terms of consumer call volume and could generate up to $3 billion in ad revenue in the U.S. within the next four years. Accordingly there’s a good deal at stake in the category.