Pfizer invests in web-based software company
Pfizer has announced that it is in talks to become a strategic investor in Imaginatik, a web-based software company. Imaginatik is listed on Aim, the London small companies index and produces collaborative software designed to allow ideas and insights from employees in large organisations to be shared collaboratively. Imaginatik was founded in 1994.The company had revenues of just $115 million in the six months to September 2007 down from $1.27 million in the same period in 2006. The company had 43 annual licence customers in September paying an average licence fee of $53,500 down from $72,500 in 2006 from 35 customers. The company produced a loss of $469,000 in the six months to September 2007 compared to a profit of $155,000 in 2006. Not exactly Google type of numbers.
Web-based collaborative software itself has been around since the days of Lotus Notes and there are hundreds of packages available ranging from the software used to run Wikipedia that can be used free of charge to hundreds of other specialised packages designed to match particular market niches.
The deal has left observers wondering why one of the largest pharmaceutical companies in the world whose expertise is in drug development is investing in a tiny software company. It is clearly not revenues, revenue growth or profits. Imaginatik has made gloomy trading statements in recent days and the simple fact of the matter is that web based companies like Imaginatik either scale up very rapidly or fade away. At the moment Imaginatik seems more likely to follow the latter track.
Pfizer went so far as to nominate Imaginatik for a technology pioneer award at the World Economic Forum at Davos earlier this year. Why Pfizer should single out this particular web software supplier and not other software suppliers to Pfizer or indeed one of its many innovative biotechnology partners is a complete mystery to us.
One industry observer commented 'The only reason I can see that Pfizer would want to make this type of investment is if they were offered a massive discount on the licence fee to make it worth their while lending their name to the Imaginatik's efforts to spin a company with declining revenues and a declining income per customer into a success story. Either way, I don't know what partners or potential partners will make of the deal.'
It could be that Pfizer have found something compelling in a company selling a faily basic web-based collaboration package, however at this point we remain to be convinced.
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