An L.A.-based startup is building a business around potholes.
Specifically, how to report them and all kinds of other urban blight, ranging from graffiti to broken streetlights. The company is Freedom Speaks LLC, which recently unveiled a product called CitySourced.
CitySourced is an iPhone application that allows people to snap photos of urban blight around their cities. The citizens can then transmit the photo along with a report to local officials as a request to fix the problem.
The application is free to download, and the reports filed by users are stored in a database managed by Freedom Speaks. The company plans to make money by charging cities a subscription fee – ranging from $15,000 to $50,000 a year depending on the city’s population – to access that database. Cities that aren’t subscribers will still receive reports filed by CitySourced users, but can’t access the database, which would allow cities to track trends and thus anticipate future problems.
Freedom Speaks unveiled CitySourced two weeks ago at TechCrunch 50, a prominent tech conference in Silicon Valley, and also announced its first customer: the city of San Jose.
Freedom Speaks didn’t win TechCrunch’s top prize – but finished as the runner-up. Since then its executives said their phones have been ringing off the hook with queries from investors and possible clients.
It’s a splashy debut for a company that still doesn’t have an office. Kurt Daradics, the company’s co-founder, said its Westwood address is a post office box and the company’s five employees work out of their homes. It has received one investment of less than $100,000 from Dale Okuno, chief executive of Pasadena-based E Z Data Inc., a financial software maker.
Freedom Speaks is pushing ahead with plans for its other major product: A database of all the elected officials in all the cities and states in the country. The company’s goal is to facilitate communication between citizens and their governments.
“We want to be the leader in interactive civic engagement,” said David Kralik, the company’s chief marketing officer.
Takeover Talk
Video game publisher THQ Inc. has seen a run-up on its stock as talk circulated among investors that it would soon be acquired. Since Sept. 11, shares in the Agoura Hills-based THQ have climbed from just under $6 to $7.40 last week.
Just one problem: The talk is sheer speculation.
Sources familiar with the company said they’ve heard nothing about an acquisition. A THQ spokeswoman said the company does not comment on rumors.
This is not the first time THQ has been the subject of takeover talk. Shortly after Santa Monica-based Activision merged with Vivendi Games in 2006 to form Activision Blizzard Inc., analysts speculated THQ could be the next game publisher to be bought.
Earlier this year, when THQ’s stock dropped to around $2, reports spread again that the struggling company would be bought. Potential suitors were rumored to be a movie studio trying to beef up its video game division, such as Warner Bros. Entertainment Inc. or Walt Disney Co.
A deal never materialized. THQ trimmed expenses by $220 million, laid off 600 employees and secured a $35 million line of credit. Now investors are apparently anticipating that THQ’s bolstered balance sheet will once again make it a takeover target.
Wedbush Morgan analyst Michael Pachter, who follows THQ, doesn’t see a takeover. “This is all uninformed speculators,” he said. “It happens every six months or so.”
THQ could make a poor acquisition because it relies so heavily on games based on characters and movies licensed from film studios and entertainment companies. That means it divides revenue from those games with the license owners, making the game maker’s products less profitable.
Meanwhile, Disney just bought Marvel Entertainment in a $4 billion deal that makes it unlikely to jump at another acquisition soon. As for Warner Bros., Pachter said that earlier this year it passed on an opportunity to buy publisher Eidos Interactive Ltd. for $150 million, and Eidos’ assets are better than THQ’s. So it wouldn’t make sense for Warner to try to buy THQ now, he said.
Rubicon Raises Cash
Internet advertising firm Rubicon Project announced last week it had secured $9 million in funding.
The Santa Monica-based company, which helps Web site owners fill unused ad space on their pages, plans to use the money for product development and acquire startups, a company spokeswoman said. Rubicon bought Others Online, another Internet advertising company, two weeks ago.
Rubicon has raised $42 million to date. The lead investor in the latest round was General Electric/NBC Universal’s Peacock Equity Fund, with $6 million.
Staff reporter Charles Proctor can be reached at [email protected] or at (323) 549-5225 ext. 230.
