Zip2

Zip2 was a company which primarily provided and licensed online city guide software to newspapers.[1] The company started as Global Link Information Network in 1995 founded by brothers Elon and Kimbal Musk in Palo Alto, California with US$28,000 of their father's (Errol Musk) money.[2] Initially, Global Link provided local businesses with an Internet presence by linking their services to searchers and providing directions.[2]:61 Elon Musk combined a free Navteq database with a Palo Alto business database to create the first system.[2] The company then began to assist newspapers in designing online city guides before being purchased by Compaq Computer in 1999.[3]

History

In 1996, Global Link received US$3 million in investments from Mohr Davidow Ventures and officially changed its name to Zip2.[2] Davidow Ventures changed the fundamental strategy of Zip2 from localized direct to business sales to instead selling national back end software packages to newspapers to build their own directories.[2] Elon Musk was appointed the Chief Technology Officer and Rich Sorkin became the Chief Executive Officer. Zip2 trademarked "We Power the Press" as its official slogan and continued to grow.[2] Zip2 struck deals with the New York Times, Knight Ridder, and Hearst Corporation,[2] and its collaboration with newspapers made it a major component of "the U.S. newspaper industry’s response to the online city guide industry", according to the Editor & Publisher.[4]

By 1998, the company had partnered with about 160 newspapers, including The New York Times, to develop guides to cities, either locally or at full scale. According to chairman and founder Elon Musk, twenty of those newspapers led to full-scale city guides. The New York Times reported that Zip2 also provided newspapers with an online directory, calendar, and email alongside their core offering.[5]

Product

Zip2 allowed for two-way communication between users and advertisers. Users could message advertisers and have that message forwarded to their fax machine. Likewise, advertisers could fax users and users could view that fax using specific URLs.[6][7]

One Zip2 product was called "Auto Guide". AutoGuide connected online newspaper users with local dealership or private party car sellers.[6]

Merger and acquisition attempts

In April 1998, Zip2 attempted to merge with CitySearch, its main competitor. While Musk initially supported the merger,[8] he persuaded the board of directors to not undergo the merger.[9] The two companies "cited incompatibilities in cultures and technology" as the reason for the merger's failure, according to The New York Times.[10]

In February 1999, Compaq Computer offered US$307 million to acquire Zip2. Elon and Kimbal Musk, the original founders, netted US$22 million and $15 million respectively.[2][11] The company was purchased to create a unit for Compaq's AltaVista web search engine.[12]

References

  1. ↑ Outing, Steve (24 October 1997). "Zip2 Plays Up National Network Card". Editor & Publisher. Retrieved 10 December 2015.
  2. 1 2 3 4 5 6 7 8 Vance, Ashley (2015). Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future. HarperCollins. ISBN 9780062301239.
  3. ↑ Napoli, Lisa (17 February 2015). "Compaq Buys Zip2 to Enhance Altavista". The New York Times. Retrieved 10 December 2015.
  4. ↑ Outing, Steve (31 August 1998). "Zip2's Evolving City Site and Portal Strategy". The Editor And Publisher. Retrieved 22 June 2016.
  5. ↑ Flynn, Laurie (14 September 1998). "Online City Guides Compete in Crowded Field". The New York Times on the web. The New York Times. Retrieved 10 December 2015.
  6. 1 2 Rossello, Rosanne (September 1996). "Zip2 offers Yellow Pages niche to newspapers." (1). Joss Group. Seybold Report on Internet Publishing.
  7. ↑ "Zip2 to offer online Auto Guide." (4). Joss Group. Seybold Report on Publishing Systems. October 1997.
  8. ↑ Cooper, Charles (3 April 1998). "CitySearch, Zip2 to merge in $300 million deal". ZDNet. Retrieved 22 June 2016.
  9. ↑ Kidder, David; Hoffman, Reid (2013). The Startup Playbook: Secrets of the Fastest Growing Start-Ups from the founding Entrepreneurs. San Francisco, CA: Chronicle Books. pp. 2224–228. ISBN 978-1452105048.
  10. ↑ "2 Web Ventures End Merger Plan". The New York Times. 1998-05-18. ISSN 0362-4331. Retrieved 2016-06-17.
  11. ↑ Junnarkar, Sandeep (February 16, 1999). "Compaq buys Zip2". CNET.
  12. ↑ Reuters, From (1999-02-17). "Compaq Buys Software Firm Zip2". Los Angeles Times. ISSN 0458-3035. Retrieved 2016-06-17.
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