Jingle Networks Proves Their Free Business Model Works

Jingle Networks, the operator 1-800-Free-411, will announce tomorrow that they’ve become profitable on a per call basis – a huge milestone and proof of concept for a startup that is trying to destroy entrenched competition by offering free 411 calls.

This is a company we’ve been tracking since 2006 when call volume really began to ramp and the funding started rolling in. In October 2006 I interviewed then-CEO George Garrick and investor Josh Kopelman about the business model. At the time they weren’t profitable on a per call basis, but were confident that their direct response ads, which prompt customers be connected to a similar company that they requested along with a discount offer, would take off.

Apparently it has, as the company has taken a big chunk of the 411 market – about 5% of the 6 billion 411 calls per year in the U.S. go to them, they say. And each of those calls is generating around $0.10 in revenue. Apparently, a lot of people don’t mind listening to an advertisement or two to avoid per-call fees that average well over $1.

The company is also making staff changes. They are closing their California office and consolidating staff in Massachusetts. Garrick, who was based in California, is stepping down as CEO after leading the company to this milestone, but remains on the board of directors. Founder Scott Kliger is the new CEO. John Roswech, formerly the SVP Sales, is the new President and also joins the board of directors.

The service competes with Google (1-800-GOOG-411), AT&T (1-800-YELLOW-PAGES), Verizon (1-800-THE-INFO), and Microsoft (1-800-CALL-411). They reportedly answer for calls per month than all of those competitors combined.

The company has raised nearly $75 million in venture capital.