In September, Kik, a popular messaging app, announced it was shutting down to focus on its cryptocurrency, Kin. However, Kik will no longer be shutting down due to its recent acquisition by MediaLab, an internet holding company. Terms of the acquisition were not disclosed. The acquisition will add to MediaLab’s portfolio of apps including the anonymous confessions app Whisper, and DatPiff, a mixtape sharing service.
The acquisition was announced on Kik’s blog. The post answers questions sure to be asked by Kik’s users: introduction of advertisements, app improvement, and further Kin integration.
“We believe that Kik’s best days remain ahead of it,” MediaLab stated. “As part of that long term commitment, we need to ensure that we’re able to cover our expenses. So over the coming weeks we’ll be introducing ads to the service. While we know that some of you may not love that idea we plan to do it in a way that it is non-intrusive, and in no way takes away from what makes Kik great (no annoying full screen video takeovers or things like that).” Furthermore, the addition of ads and the anonymity features of Kik, make it unclear what will be advertised on the platform, due to lack of user tracking.
The app will discontinue the video chat feature and will no longer support third party bots, but it will allow RageBot, a tool for managing group chats, for now.
Kik has faced problems due to the anonymity of the app, which has led to child endangerment incidents. Since MediaLab also owns Whisper, an anonymous social app, though of a different nature, some of these new changes to Kik could be a move to combat Kik’s issues with pedophiles and other predators. However, the reasoning behind such changes have not been revealed.
In September, Ted Livingston, Founder and CEO of Kik, wrote in a post that Kik was shutting down to effectively use resources for Kin’s legal battle with the Securities and Exchange Commission (SEC) regarding if Kin cryptocurrency’s initial coin offering (ICO) should be regarded as a security. In the complaint, the SEC states that Kik violated securities law when it raised $100 million in its Kin token offering in 2017. Livingston states, “Becoming a security would kill the usability of any cryptocurrency and set a dangerous precedent for the industry.” The SEC has a different perspective on the matter, “I believe every ICO I’ve seen is a security,” Securities and Exchange Commission chairman Jay Clayton said. “I want to go back to separating ICOs and cryptocurrencies. ICOs that are securities offerings, we should regulate them like we regulate securities offerings. End of story.”
The acquisition of Kik, allows the company to completely focus on Kin’s case with the SEC. As this case unfolds, it will be important to look at its potential impact on MediaLab’s desire to further integrate Kin cryptocurrency into the Kik messaging app or any changes made for integration.
It is still unclear what will happen to the staff of Kik, after it announced layoffs earlier, as well as who will be working on the Kik messaging app. However, 51 staff members are now working at Carta, an equity management software firm.
MediaLab’s portfolio of apps in addition to Whisper and DatPiff include: Manga Life, an app for user created manga; and CoCo E-Learning, an online learning platform. As of June 2018, MediaLab filed registration documents in California. Kik’s addition fits in with the other applications and appeals to a younger generation.