Exclusive: Habeas Getting Shopped Around
Investors in e-mail reputation firm Habeas have apparently decided it’s time to get some of their money back.
Representatives of investment banking firm William Blair & Co. have been shopping Habeas around, according to documents obtained by this newsletter.
The question, of course is, who would buy a third-place competitor in a three-horse race that has yet to break even?
Habeas has two main competitors: Return Path and Pivotal Veracity. By all accounts Habeas is a distant third and doesn’t offer a whole lot the two other firms don’t already have. As a result, the only reason Return Path or Pivotal Veracity might buy Habeas would be simply to get it out of the market.
Deirdre Baird and Matt Blumberg , chief executives of Pivotal Veracity and Return Path, respectively, declined comment.
Industry rumor has it that the firm would like to be bought by a deep-pocketed Internet service provider.
Mark McNay, a partner at William Blair listed on documents obtained by this newsletter as a contact for inquiries regarding Habeas, did not respond to an e-mail asking who potential buyers of Habeas might be.
Habeas’s CEO Des Cahill responded to the same question with the following statement via e-mail:
“Habeas continues to experience strong growth and rising demand among the email marketing community for our online reputation management services. As a rapidly growing company in the online marketing space, Habeas is in regular discussions with organizations interested in making strategic investments in our company. We are focused on continuing to grow the company while serving the needs of our customers and partners.”
According to the sales pitch documents from William Blair, Habeas’s revenue in 2007 was $5.1 million and the company has yet to break even. The brief projects Habeas’s revenue to increase to $8 million in 2008 and for it to break even by the end of this year.
Among Habeas’s services for e-mail senders are an audit service that analyzes and recommends changes to marketers’ e-mail programs; Email Monitor, a Web-based service that allows senders to monitor the deliverability of their e-mail campaigns; and the Habeas SafeList, a whitelist of senders who Habeas has certified as non-spammers that anti-spam-technology and e-mail-inbox providers and can check against to help them determine if messages are spam.
For receivers, the company offers a service called SenderIndex—a database of more than 1 million e-mail senders’ reputations—to help them decide whether to accept or block incoming e-mail.
Habeas was founded in 2002 by anti-spam activist and attorney Anne Mitchell. The company’s original business model was based on a copyrighted haiku, a form of Japanese poetry. Habeas’s marketing clients would contractually agree not to spam and buy the right to insert the haiku into their headers so their messages could be readily identified as wanted by ISPs and anti-spam technology firms.
Among those that recognized Habeas’ headers were ISPs America Online and Juno, and anti-spam technology providers SpamAssassin, SpamCop and Mailshell.
The idea was if a spammer tried to use the headers, Mitchell could sue them for copyright infringement.
The model didn’t work however, and Habeas abandoned the haiku in 2004.
