Blyk raises 40 million Euros, faces challenging ad market
Blyk, the European MVNO targeting 16-to-24 year olds, has raised 40 million EUR in a third round of funding. I’ve written about Blyk’s unusual business model — free phone calls and text messages in exchange for viewing MMS and SMS advertising. While it might sound like “free WiFi in exchange for ads”, there’s a big difference. Blyk is using existing networks, not building its own, by buying wholesale capacity from operators such as Vodafone. It also acts as a consultant and mobile ad platform for large companies that target young people. Moreover, not everyone can join Blyk: it’s service is limited to the age group 16 to 24. So far Blyk is in the UK and the Netherlands, but they are using the 40 million EUR to expand to other countries.
No one knows how Blyk will survive the global recession. Blyk’s CEO seems upbeat despite the dramatic fall in advertising revenues, but media analysts predict that Blyk will go through a very challenging period not only in trying to attract more advertising money, but also in getting enough users to sign up for its service around the world. Marketing is expensive and moving people away from their existing mobile operator costs a lot of time and money.
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