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Wednesday, 29 September 2010

Xmarks learns a hard lesson in "free"

Xmarks, the bookmark synchronisation service for Firefox, will close in 90 days according to a post on its blog on Sunday.

The company's founder, Todd Agulnick, says:
"For four years we have offered the synchronization service for no charge, predicated on the hypothesis that a business model would emerge to support the free service"
"The past four years have been a wild ride for us: growing something from nothing to substantial scale, providing a simple service that people love because it simplifies their lives."
I've used Xmarks - Foxmarks as it was back then - since soon after its launch almost four years ago.  Its demise raises yet again the question of funding for independent "micro services".  That is: mirco in the functionality they offer, not the size of their user-base (reported to be 2 million users).

For a service like Xmarks ad funding was never a realistic option.  How would the ads be delivered? Users would surely take umbrage at finding a sponsored link or similar sat atop their collection of personal bookmarks.

As Todd explores in his detailed blog post, freemium (free, with premium extras) also became a distant possibility with "free" - or packaged as part of e.g. smartphone OSs - synchronisation services appearing from multiple vendors.

In my mind the only realistic option for Xmarks would be to run the service for free indefinitely as a marketing tool for the company's other saleable products, whether that be consulting services, a corporate intranet synchronisation option or a completely unrelated product.

The CTO of Xmarks, Inc. talks of lessons learned by making "big mistakes".  By that he may be referring to synchronisation problems as users upgraded between certain versions of Xmarks or other serious customer-affecting glitches I noticed along the way. 

To be honest Xmarks faired better than most on this front.  My observation would be the relentless drive to improve the service beyond what I as a customer needed came at the expense of securing the business in the long term.

Once freemium and ad-funding had been ruled out the company needed to focus on selling something else off the back of their profile and reputation gained through the success of Xmarks, rather than continue to expand the basic service.  I haven't used one single additional feature that wasn't in the early releases of Foxmarks - for example I don't sync my passwords on security grounds.

Yes, it's easy for me to to add my 2p's worth of hindsight, but the death of Xmarks - a popular service and one of the first to market - needs to be studied to better understand how and indeed whether small independent software+service providers can survive.

So farewell then, Xmarks - I for one will miss you.


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