Constant Contact Acquires NutshellMail; Adds New Social Media Tool to Build Engaged Customer Relationships

Constant Contact today announced a new social media offering to complement its email marketing, event marketing, and online survey tools for small businesses and nonprofits. Through the acquisition of privately held NutshellMail, based in Menlo Park, Calif., Constant Contact now provides a tool for small organizations to monitor and engage with social networks right from their email inbox, the hub of their customer communications. Financial terms of the acquisition were not disclosed. Constant Contact also announced it will open a Bay Area office, details of which will be announced later this year.

“We made email marketing simple for small businesses and nonprofits. Now we’re going to make social media marketing simple for them,” said Gail Goodman, CEO of Constant Contact.

NutshellMail is a free service that makes it easy to monitor, manage and interact with friends, fans and customers through social media. It works by collecting and organizing the latest messages and activity from social networks — including Twitter(TM), Facebook, LinkedIn, and MySpace(R) — into an interactive email snapshot that is delivered directly to your email inbox. Users can customize the content they want to track, add search terms, and choose how frequently they want to receive email updates. Signing up for a NutshellMail account takes just a few minutes, and the time savings start right away.

With NutshellMail, users can easily monitor and interact with social networks all in one place, including posting updates right from their email inbox. The free service helps busy professionals keep track of critical conversations about their company and the competition, and keeps them informed about what their customers are talking about — all from the place where they spend most of their online time.

“We started NutshellMail to help solve the problem of social network overload. As part of the Constant Contact family, we’re going to help some of the busiest people on the planet, small business owners, turn what might seem like social media chaos into a smart marketing tool for growing their business. It’s like a DVR for your social networking activity,” said Mark Schmulen, co-founder of NutshellMail.

Small Businesses and Social Media Marketing

Email marketing revolutionized how small businesses communicate with customers. Constant Contact showed small businesses that email marketing was simple to do and how to do it right. Today, more than 350,000 small organizations rely on Constant Contact to help them build strong customer/member relationships that help them grow their business/membership. Ten years after Constant Contact introduced email marketing, social media marketing is changing how small businesses communicate with customers. Customers are talking to — and talking about — their favorite businesses through their social networks.

Small businesses are no longer questioning if they should embrace social media marketing, as noted by the results of Constant Contact’s 2010 Small Business Attitude and Outlook Survey, but rather how they can most effectively engage their fans and attract new followers to deliver real business results. They want to know where and how to get started.

— They know that word-of mouth referrals are key to engaging new customers to grow their business, and …

— They know that these conversations are happening online, but …

— They don’t know where to start or how to engage in them, so …

— They need help making order of the chaos, and …

— They need help to do it right.

This is where Constant Contact comes in, providing the tools, coaching, and support needed to help small businesses learn social media marketing, just like they learned email marketing. Doing it right means:

1. Delivering a great customer experience that …

2. Creates passionate customers who, in turn, share their passion throughout their networks …

3. Then maintains the circle by keeping passionate customer relationships alive through ongoing engagement.

“Small businesses clearly have the interest and desire to make the most of social media marketing. We want to make sure we provide the tools and the know-how for them to easily add social media to their marketing efforts,” Goodman said.

Constant Contact to Expand Social Media Marketing Tools

Constant Contact plans to add more social media marketing tools in the coming months, all supported by its signature free personal coaching, training, and education services, and award-winning technical support. Current social media marketing tools include:

— “Join my mailing list” Facebook apps

— Share bar for newsletter subscribers to share content across social media networks

— Ability to tweet events

— Ability to quickly create branded links to Facebook Pages, Twitter, and YouTube(R) right from the authoring environment

Constant Contact to Open Bay Area Office

NutshellMail co-founders Mark Schmulen and David Lyman will lead Constant Contact’s new Bay Area office, to be opened later this year, establishing a West Coast presence for the company. Schmulen will serve as Constant Contact’s general manager of social media, and David Lyman as director of software development. The company is looking for high-energy, talented engineers with social media experience and a passion for helping small businesses succeed to join the West Coast team. Job openings will be posted at constantcontact.com/jobs.

Constant Contact Reviews FY2010 Guidance to Reflect Acquisition

Based on information available as of May 24, 2010, Constant Contact is reiterating its revenue, adjusted EBITDA, and non-GAAP earnings per share guidance for the second quarter and full year 2010.

After taking the expected financial impact of the acquisition into consideration, the company continues to expect second quarter revenue to be in the range of $41.6 million to $41.9 million, adjusted EBITDA of $3.5 million to $3.7 million, GAAP net loss per share of $0.03 to $0.04, and non-GAAP net income per share of $0.02 to $0.03. The company also continues to expect full year 2010 revenue to be in the range of $170 million to $173 million, adjusted EBITDA of $21.5 million to $22.0 million, and non-GAAP net income per share of $0.33 to $0.36.

The company currently expects to incur increased expenses for the full year 2010 associated with the acquisition, primarily due to increased stock-based compensation expense. The company is updating its guidance for full year 2010 GAAP net income per share to $0.03 to $0.05, from its prior guidance of $0.05 to $0.08, to reflect the increased expenses.

Constant Contact provides a reconciliation of the most comparable GAAP financial measure to the non-GAAP measure in the financial tables of its quarterly press releases, including its first quarter 2010 financial results release issued on April 29, 2010.

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