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Crain's New York Business| December 18, 2006

Software Success

TransMedia's Web application connects with subscribers, brings in revenues

By: Amanda Fung

When TransMedia Corp. unveiled its Glide Web-based software late last year, a remarkable thing happened. Critics — including some of the most powerful in the land — not only noticed; they gushed.

"It is the most interesting online service I've seen in quite a while," wrote Wall Street Journal tech columnist Walter Mossberg.

David Pogue proclaimed in The New York Times, "Glide's core idea is unassailably fresh and useful."

Not bad for a virtually unknown company — a five-year-old, 24-person outfit tucked away in an eighth-floor office on Manhattan's West 18th Street.

Ready for future

Despite its size and youth, TransMedia has garnered far more than good reviews for its software. The company also boasts 250,000 subscribers and has partnered with mighty Intel to make Glide compatible with the microprocessors that will power the next generation of handheld computers.

Glide's popularity stems from its ability to allow users of all sorts of devices — from PCs to cell phones — to work on everything from Word files to slide shows without having to physically transfer the information from one device to another. Glide permits all of the information to be stored centrally and accessed via the Web. TransMedia also throws in its own set of applications for word processing, e-mail and other functions that can work on Windows PCs or Apple Macs without requiring users to download additional software.

"Their technology is critical, since everyone agrees that eventually all software will be hosted on the Web," says Rob Enderle, a technology consultant.

Still, TransMedia has a long way to go. Revenues in the fiscal year ending July 30 came to a mere $1.5 million. However, Donald Leka, the company's founder and chief executive, predicts that revenues will soar to $10 million in the current fiscal year.

To date, the bulk of revenues has come from individual subscriptions. While the basic Glide service is free, 17% of users opt for extra online memory and pay fees starting at $4.95 a month to get it. In addition, the company has a handful of corporate clients, including New York University and media company Univision, that pay a fee based on the number of users.

TransMedia plans to license Glide technology next year to companies that want to implement it on their own Web sites. For example, an entertainment Web site would be able to rely on Glide to provide users with an online music store, Web-based e-mail service and storage space on the Internet where they can save and access photos and other files. The company believes that this additional business could bring in substantial new revenues.

More important, the company's relationship with Intel means that handheld computers that are powered by Intel chips, such as those from Samsung and Toshiba, could come loaded with Glide software in the near future.

"Potentially, that could give us exposure to 30 million consumers next year," says Mr. Leka, whose inspiration for Glide came from his frustration at trying to pull together various bits of digitized information. As an executive working for health media company RxRemedy, Mr. Leka, who is also an amateur composer of classical music, had spent hours trying to bring together audio, video and data files in different formats from various computers.

Thinking big

It was then that he discovered how useful it would be to have software that could make his task easy. Armed with only a rough concept, in 2001 Mr. Leka hired a programmer to code the first version of Glide, formed a company to develop it and hit the road to pitch investors.

To date, he has raised $6.1 million.

Mr. Leka is thinking big. He talks of Glide someday supplanting even Microsoft Office in some niches. In the meantime, though, TransMedia faces competition from companies — including Google and Microsoft — that are launching Web-based products similar to Glide.

"It's all about innovating," says Mr. Leka. "Microsoft doesn't scare me, but I would be crazy not to worry about Google."