Why Did Twitter Acquire India’s ZipDial

Twitter has acquired India's ZipDial. We look at the reasons why Twitter acquired the missed call company from Bangalore

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Twitter has silenced all rumors with its announcement of having acquired India’s ZipDial  – a Bangalore based startup co-founded by Valerie Wagoner, Amiya Pathak, and Sanjay Swamy.

“In order to make Twitter even more accessible to people in India and around the world we have acquired ZipDial. On behalf of our India operations, I’m delighted to welcome ZipDial’s leadership, employees and a new office in Bangalore to the spirited team that is @TwitterIndia,” wrote Rishi Jaitly, Market Director, India & Southeast Asia on Twitter India blog.

Last week TC had reported about the acquisition talks – “A few sources tell us that it has already closed, is in the region of $30 million – $40 million, and could be announced as soon as this week. Another source close to the company says that there have been two companies looking at ZipDial, including Twitter (with the other possibly Facebook, although the source would not say).”

Lighthouse Insights had debated that Facebook and not Twitter should buy ZipDial. However, the acquisition makes sense for Twitter considering its expansion plans in emerging markets and the challenges for such markets.

“Our primary mission, bolstered by this acquisition, is to help every Indian with a mobile device get a great, relevant Twitter experience. We believe Twitter – a platform invented for SMS and rich in media – is a perfect match for India, a mobile-first country with a celebrated media heritage,” writes Rishi.

While Twitter hasn’t been doing great on user acquisition and beefing up its revenues, the two major reasons for acquiring ZipDial lies in: 1. Twitter Ads fail to work on feature phones, and 2. India is a mobile economy driven by missed call.

Twitter Ads fail to work on feature phones

Twitter, an inherent mobile first company last reported  about 78% of its 284 million MAUs coming from international waters. With user acquisition problem in a country that has been and is crazy about Facebook and WhatsApp, revenues have been tough for Twitter. One of the reasons being India is still a feature phone driven market. While the feature phone market has been slowly slipping in comparison to smartphone market, it still holds a 71% market share.

This has impacted Twitter and listed as one of the challenges while going for an IPO in 2013. “This limits our ability to deliver certain features to those users and may limit the ability of advertisers to deliver compelling advertisements to users in these markets which may result in reduced ad engagements which would adversely affect our business and operating results,” said Twitter.

To overcome this problem Twitter went the missed call way – a business that is driving most of the emerging markets, including India. According to a report by ET, the missed call business in India is Rs. 500 crore, Twitter will certainly work on a missed call ad platform like Facebook had developed last year.

Taming the missed call business in India

To tame the missed call business for user acquisition and creating new sources of revenue Twitter started working with ZipDial, a leader in this business that claims to over 900 million engagements across 7,000 campaigns.

It says more than 500 brands, including a lot of recognizable names like Disney and Pepsi, are customers on its platform. Besides it is expanding its footprint outside of India to other emerging countries in the region such as markets in Southeast Asia – a market that even Twitter wants to tap for its next set of users.

To bring new users on the platform Twitter banked on the Bollywood madness in the country. Twitter integrated the missed call feature to get tweets delivered to phones as SMS’s. Twitter first roped in Shah Rukh Khan, Rajinikanth, and then Amitabh Bachchan. In all the engagements, Twitter worked in alliance with ZipDial with the objective of user acquisition.

Things started looking bullish for Twitter in 2014 with the country getting ready for the General Elections. During the elections Twitter played a big role, integrated with TV, provided its data for election analysis and for the first time we saw the political fight happening on Twitter trends and not just on TV prime time debates.

As a result of which Twitter India witnessed more than 56 million election-related tweets from January 1 this year till May 12, when the polls ended. Providing more numbers to chew on, Twitter points that: Each of the poll days saw between 5.4 lakh and 8.2 lakh election-related tweets.

During the same time it tied up with two national political parties – BJP and INC . Both these parties worked with Twitter and ZipDial to make their Twitter accounts accessible to all users in India on any phone, on any network and in any language.

“Twitter was their ultimate “mobile microphone” in the country’s first-ever #TwitterElection. Using the same technology, MTV India worked with Twitter and ZipDial to launch an award-winning #RockTheVote “Dial the Hashtag” campaign, while TimesNow TV provided breaking elections alerts via SMS, ” said Rishi.

Talking about the times to come he adds: “With the Cricket World Cup around the corner, the rise of Twitter as a tool for governance, and more Indian icons joining our platform every day, 2015 promises to be another big year for Twitter in India.”

Twitter also states that beyond allowing missed call connections to businesses, it was attracted to ZipDial’s other use cases, such as to “access great content, including cricket scores, audio programming, Tweets from their favorite Bollywood stars – and much more – on their mobile phones.”

In a matter of two years India has become the fastest developing market for Twitter. With ZipDial in its kitty Twitter is all set to reach out to the next 3 billion with ZipDial (ZipDial says in its promotional materials). Will it spike the 34% of its revenues from outside the U.S., lets wait for the quarterly results from Twitter.

Meanwhile cheers to ZipDial and the Indian startup eco-system!