Brief:
- Kik's messaging app avoided a shutdown as tech holding company MediaLab acquired the platform from Kik Interactive, a company blog post announced. Kik Interactive last month said it would close the messaging app and focus its financial resources on developing its Kin cryptocurrency, which is the target of a costly lawsuit by the U.S. Securities and Exchange Commission.
- MediaLab, which owns the anonymous social media app Whisper, plans to sell advertising in the Kik messaging app and to invest in improvements that will make the platform faster and more reliable. MediaLab says it's mindful of the user experience and plans to avoid intrusive ad formats like full-screen video takeovers, per its blog post.
- MediaLab plans to work on making the app less buggy while eradicating spambots and unwanted messages. As part of that plan, it will discontinue a video chat feature and third-party bots platform.
Insight:
MediaLab's plans to revamp Kik will give mobile marketers more opportunities to reach consumers who use the messaging platform, which is especially popular among teens. Kik hasn't provided current usage data, last disclosing several years ago that it had about 300 million users. With an investment from MediaLab, Kik could have a better chance at surviving and resuming growth that had once rivaled WhatsApp, Facebook Messenger, Telegram and Line.
MediaLab's acquisition of Kik's messaging platform marks a sudden reversal in fortune for the app, which was on the verge of shutting down only a month ago. The planned closure was a significant downfall for Kik, which in 2015 had been valued at $1 billion with an investment from Chinese tech giant Tencent, owner of WeChat. At that time, Kik aspired to emulate WeChat in supporting third-party app developers that create mini-programs to expand beyond messaging into services such as shopping, banking, travel booking, ride-hailing and food delivery, among others.
Kik's cryptocurrency Kin reportedly became too much of a distraction after the SEC sued the company in June for raising about $100 million in an initial coin offering without properly registering with the agency. Kik launched in 2010 and grew rapidly with features such as anonymous chat that didn't require registration with a mobile number or other personal information. The anonymous chat features also were controversial in giving child predators a way to communicate with minors while avoiding law enforcement.
