Kleiner Perkins Goes After Twitter-Like Startups in Content Push

By Olga Kharif - Oct 13, 2011 11:01 AM GMT+0700

Kleiner Perkins Caufield & Byers will invest in two mobile startups in the next week that turn users of their applications and services into contributors, said Matt Murphy, a partner at the venture firm.

One of the investments may be announced today and the other in a week, said Murphy, who didn’t disclose the names of the companies.

Kleiner, which has stakes in Twitter Inc. and Groupon Inc., is ramping up investments in what it calls local crowdsourced content and commerce, Murphy said in an interview. Users of these applications may contribute video, services or coupons to consumers nearby. The idea is to replicate the success of sites like Twitter, where people share article links and short statements, in an array of mobile apps.

“We are getting to a stage in mobile where people are willing to do more than just consume, they are interested in being content creators,” Murphy said. “It’s one of the biggest trends we are seeing in mobile. It really unlocks the potential of mobile. People can help make experiences more interesting.”

As part of this trend, consumers will increasingly interact with merchants through applications or services by sharing an image or sending a text message, Murphy said.

For example, Uber is a service that lets users request car service via text message or a mobile app. Uber, which is not a Kleiner investment, sends the request to the nearest driver and sends the customer an estimated arrival time. Uber puts the crowd of professional drivers and potential customers together, and lets them interact.

“It will be integral to many, many applications,” Murphy said.

The startups can make money by taking a cut of the offers, or through advertising revenue, Murphy said. Ads served to apps to which users contribute content may command higher rates, he said.

“Because the user-generated contribution is so valuable, you can see higher engagement rates,” Murphy said.

To contact the reporter on this story: Olga Kharif in Portland, Oregon, at okharif@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net