Marchex today announced it was acquiring Jingle Networks, a Massachusetts-based company which operates the 800-Free-411 consumer service and a mobile ad network, for up to $62.5 million in cash and stock. The only problem is that close to $90 million had been invested in Jingle since 2004, according to VentureBeat. First Round Capital was one of its investors and early backers, though given its usual strategy it had probably supplied only a small fraction of Jingle's total capital.
With the rise of smart phones, people generally have less need to make 411 calls for directory information. Seattle-based Marchex is buying Jingle Networks for its voice-search technology and mobile ad network. This moves Marchex into the mobile advertising space, and complements a growing part of their business, one in fact it was helped in getting started in by acquiring then Philly-based and First Round Capital-backed VoiceStar in 2007. VoiceStar was a pioneer in the pay-per call business, which focused on generating calls directly to merchants in response to online advertising rather than clicks.
With the acquisition of Jingle, Marchex expects call-driven business to account for 75% of its revenue in 2011. Marchex anticipates Jingle Networks will generate more than $26 million in revenue in 2011, up at least 40 percent from 2010.
VoiceStar was co-founded by Ari Jacoby, who has since gone on to co-found and be CEO of Solve Media, the New York and Philly-based company that uses advertising to monetize "CAPTCHAS" on websites. First Round is also a backer of Solve Media. Marchex acquired VoiceStar for up to $28 million in cash and stock.