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Posted at 06:00 AM ET, 12/29/2011

Campfire Labs co-founders discuss Groupon acquisition: “The deal is closed”


Groupon headquarters in Chicago. (SCOTT OLSON - AFP/GETTY IMAGES)
With a successful IPO in the rearview mirror, Groupon is making acquisitions.

On Wednesday, TechCrunch reported that the daily-deals Web site had acquired “stealth Silicon Valley start-up” Campfire Labs and that it had been confirmed through “unofficial channels.”

Well, it’s official, according to Groupon and to Campfire Labs CEO Naveen Koorakula and his wife, Sakina Arsiwala. The couple co-founded Campfire Labs.

“For all intents and purposes, the deal is closed,” said Arsiwala during a phone interview Wednesday night.

Asked for comment on the deal, Groupon’s Communications Director Julie Mossler had this to say via e-mail: “The Campfire team have already become valuable contributors to Groupon's social media capabilities. We're thrilled to have them aboard and excited to see what we can create in 2012 and beyond.”

The couple didn’t share too many details, including how much Groupon paid for the acquisition. But when asked whether Groupon — which, in November, had the biggest initial public offering by a U.S. Internet company since Google — was on their short list of acquisition companies, Koorakula was quick to answer, “Yes, definitely.” Koorakula was formerly with Yahoo!, Inktomi and Powerset and was the founder of search technology company Picch.

 “It’s just been a very exciting time for us,” said Arsiwala, who, before her work with Campfire, served five years as head of international for YouTube and two years as product lead for Google’s international search and search quality.

But what does Campfire Labs do?

The company has a who’s-who list of investors, including YouTube co-founder Steve Chen, Ron Conway, former YouTube and Facebook CFO Gideon Yu and the late Stanford professor Rajeev Motwani — “a close mentor and adviser,” said Koorakula.

Campfire Labs’s first product, Slice, was exclusively deployed at Kenyon College for testing in September. The Web-based service included chat, calendar and “virtual DJ” tools, allowing users to control the music their friends listened to online. Today, both the Slice and Campfire Labs Web sites are offline.

During the interview, Koorakula’s and Arsiwala’s description of their work dealt more with the conceptual than the concrete. But the concept — getting people to transfer their social activity from online to offline interaction — was not only straight up Groupon’s alley, it was also concrete enough to get the company interested.

“I saw what Naveen was working on and I really got excited,” said Arsiwal. “We essentially started with an idea.”

That idea, according to Koorakula, is, on its face, seamlessly marrying our old, analog social roots with our fresh, new, digital ones.

“It was really more about context and getting people to spend more time offline with each other,” said Koorakula. “I think a bunch of it goes back to search principles in some ways, making the connections that exist but are not apparent to the naked eye — just getting those connections to happen.”

“Groupon was a great fit for us, given how perfectly complementary they were to what we've worked on so far,” said Koorakula. “They’ve done a marvelous job of making offline experiences happen for people.”

Asked for specifics about Campfire’s hardware or software, neither Koorakula nor Arsiwala got specific, given the sensitive nature of the deal. “We build technology as well as product experiences,” said Koorakula. “Context was an important enabler for our product.”

In the process of building their digital company, the husband-and-wife team also faced the challenge of building their offline relationship.

 “It’s funny because, when we first thought about it, Naveen told me I was probably his hardest recruit,” said Arsiwala.

“It was hard for the first month, because both of us are somewhat obsessed with this,” said Koorakula. “When you have work and life which are separate, you still have your personal time. What we found in the first month is we would be talking about work 24/7 and wouldn’t even notice it. ... After the first month, you’d have this sense of being really tired for some reason.”

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By  |  06:00 AM ET, 12/29/2011

 
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