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Magazine digest -- Ex-banker creates profitable free app

2011/07/25 14:05:19

The location-based service software WaWaBank is not the only one on the market, but a former banker has used his 12 years of experience working in banks to find a successful model to reap profits from the free app.

MyBall International Co.'s WaWaBank app for hand-held devices, which is available on both Apple Inc.'s App Store and Google Inc.'s Android Market, has been downloaded by 260,000 users in the past six months who use it to stay abreast of the latest discounts offered to credit card holders.

The app has also brought in over NT$1 million (US$34,695) in monthly revenue to the company founded by Jesse Ouyang, with a net profit margin of 25 percent.

Liao Yu-ling, a marketing manager of Taishin Bank's credit card division, said users of the app, most of whom are young and use smartphones, and respond instantly to promotion campaigns, are the main potential clients targeted by card issuers.

With shop owners reporting increased credit card consumption from customers brought in by the app, 36 credit card issuers, mainly banks, have joined the service.

Several notable businesses, such as Burger King, Mitsubishi Motors and personal care brand DHC, have also chosen to advertise through WaWaBank.

The income from this partnership with banks and advertising has allowed the software to break even just two months after going online.

WaWaBank's success is based on MyBall's initial business when the company started in 2009 -- providing tailored marketing information for banks and telecom operators to target customers through bills.

This marketing approach, which has higher precision as it matches businesses with potential consumers, increases customer loyalty and brings in actual income to all the parties involved.

Even though MyBall's previous attempt at an online version of the marketing service at the end of 2009 did not impress banks in Taiwan, Ouyang then turned to software for mobile devices, which was becoming more and more popular at the time.

Ouyang's comprehensive proposal covering all aspects involved in a bank's credit card operation, utilizing his background in banking, was what persuaded the card issuers, Liao said.

The app's success later also led to deals with international card organizations including MasterCard and Visa.

In the coming months, besides launching local versions of WaWaBank for 21 Chinese cities, MyBall plans to combine the service with Facebook and Sina Weibo, a microblog service in China.

Since users tend to spend longer periods of time on these social networking sites, Ouyang expects this new model to create advertising revenue five to 10 times more than the app generates at the moment.

As the app market continues to grow, Ouyang's profitable model can be a good case study for other developers, especially since consumers are still used to free downloads. (Business Weekly 1234)(Translated by Kay Liu)