The good news is that Free411 only has 1.5% of the 411 market, yet it handles 7 million calls a month.
The bad news, of course, is that like 98.5% of the rest of the new tech-related companies we read about, Free411’s business plan revolves around that old Web 2.0 standby- advertising. Callers are required to listen to a 12 second advertisement during each call.
Those advertisements are supposedly ads for competitors of the place you are calling. You can choose to call the advertiser instead by pressing 1 during the call. If there is no local advertiser for the business you are calling, the business you are calling gets a telemarketing call about signing up as an advertiser. I doubt that will make their day (I am a little dubious of the claimed 13% success rate). Nevertheless, there is something fundamentally clever about this system.
And it’s worth noting, that while this service is based on ad revenue, it is not based on online ad revenue. While there are competitors, such as 411-Metro, the space is less crowded that many others.
But what happens if you call for a residential number? Or for a company with a name that doesn’t indicate what it does? Or a governmental number. Or, or, or….
At the end of the day, I am reasonably impressed by their structure. Not $26M impressed though. I just don’t see the big payoff here. My cell provider doesn’t charge extra for 411 calls and even if the free 411 concept takes off, what prevents the existing telecos from doing the same thing?