Like Skype, the main attraction of Jingle Networks is to destroy a fat existing market. Skype gave users a way to bypass costly telephone calls by routing them over the internet for free. Jingle Networks, through its 1-800-Free-411 service, is helping to destroy the $8 billion U.S. 411 market by making those calls free as well.
So while carriers continue to charge an average of $1.25 for each 411 call, Jingle Networks is providing the same service for free and adding a fifteen second advertisement after you request a phone number but before you are given the results. Consumers don’t seem to mind the advertising – less than a year after launch they claimed to have taken 3% of the total U.S. market for 411 calls, with 450,000 calls per day (out of 6 billion total yearly 411 calls).
Today Jingle Networks announced a fourth round of financing – $30 million from Goldman Sachs and Hearst Corporation, at a valuation of around $150 million. This comes after a $26 million round in April 2006, a $5 million round in December 2005 and a small angel round of financing last year.
I spoke to CEO George Garrick and early investor Josh Kopelman today about the financing and the Free-411 business in general. Listen to the podcast at TalkCrunch.
Advertisers include 1-800-flowers, 1-800-Mattress, 1-800-Contacts, CBS, Discount Tire, ID Media, Ingenio, OMD, Roto Rooter, The South Beach Diet, Vonage and Zagat Survey. In many cases users are given the opportunity to go to an advertiser instead of their requested phone number. For example, if you request a number for a local florist, you may be asked if you’d rather try 1-800-flowers with a discount coupon instead.
Ultimately 411 is just another way for people to search for information, and Google will clearly be eyeing this space as the company matures.