TechCrunch and others report this week that a San Francisco-based start up, iWidgets, has raised $4.1 million in Series A funding from Opus Capital and University Venture Fund. Eyebrows are raised: in this climate, what does it take t get funded? Not surprisingly, there’s a social media component. The company lets anyone create a widget that can syndicate content or simple apps to social networks and portals.
What’s unique is their easy drag and drop user interface. You no longer need a programmer to build your widget. It’s easy to set up and format a widget that incorporates text, feeds or video (although I wasn’t quite able to figure out how to make a polling widget in the limited time I had to play around with it). Some of the samples the company has on its site are pretty cool. I especially liked the YouTube widget and the package tracking widget.
iWidget also stands out in how easy they make it for people to publish their widgets to different platforms – Facebook, MySpace or iGoogle – without a lot of complicated engineering to adapt it to each platform.
The vision, as described by iWidgets founder Peter Yared, is to let brands follow their customers to where the customers are and become part of the content that people are curating for themselves on various portals. From the iWidgets site:
Widget ads are just the first step. Instead of simply trying to build brand awareness, marketers now have the ability to reach out to customers with useful features to enhance their personalized pages on social networks. An athletic gear company could offer an application that lets a group of running buddies track how their times and distances compare. An airline could offer a “come visit me” application that displays the latest fares for a trip between the hometowns of viewers and Web page owners. Even better, an airline might offer a widget that lets users track their frequent-flier miles and search for award trips right from their iGoogle pages. These types of applications can be useful, engaging, and viral—when you see one on your friend’s profile, you are likely to install it as well.
Here’s the rub: short-term, the company is stuck with the ad model. The site describes a revenue-sharing approach: if you include ad content in your widget, they will take a 15% cut; if you don’t include advertising they reserve the right to load ads and give you a 15% cut. A) what advertisers and who will sell them? B) will individuals want widgets on their page that are loaded with ads? C) a brand won’t want ads on their widget … so there’s a tease for a ‘private label’ model to come. This approach begs the question: what value is iWidgets adding to the advertiser in an ad-supported model? Advertisers buy audience, and they can already reach the same audience through Facebook or Google or MySpace directly.
Long-term, iWidgets will try and teach brands how to use widgets to create useful apps that engage customers. That’s very cool, but it will take some doing to figure out the appropriate business model there, too.
Clearly, iWidgets has some ideas on how to monetize all this, or they wouldn’t be getting funding in this environment. We wish them luck, and we’ll be keeping an eye on them. If we come up with any cool widgets we’ll let you know!