Mercora, which last year renamed itself to Social.fm, was one of the earliest entrants into the music discovery market and launched to generally favorable reviews in early 2005. Now, however, as GigaOm reports, Social.fm has shut down its service and its web site only displays blank pages (though Google managed to cache a goodbye message). Social.fm was built upon a very interesting P2P architecture, but it couldn’t compete against services like Last.fm, iLike, or Pandora, all of which work right from the browser without the need to install a local client first.
Last last year, Social.fm not only tried to re-brand itself in the face of competition from its browser based competitors, but it also launched a mobile application for Windows smartphones, as well as MySpace and Facebook widgets, which have now all lost their functionality.
In terms of financing, Social.fm was a relatively small company. It only raised one $5 million Series A round back in 2005 and does not seem to have raised any more money since then. Chances are that the company ran out of funding and simply wasn’t able to keep operating, especially in the face of declining user numbers. Social.fm’s income was mainly generated through advertising in its client, though it also had a premium service available for $3.99 a month.
Doomed by the Client?
There is probably a good chance that Social.fm’s client based architecture really put it at a disadvantage against its browser based competitors. Having to install yet another local client is a showstopper for a lot of users, especially if they can get the same functionality on a web site. Joost, the much hyped video service, suffers from the same problem today, while its browser based brethren like like the NBC/FOX backed Hulu continue to gain mainstream traction. Even though Joost is planning on releasing a browser plugin, this might be too little, too late by now.
