Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Who Has The Better Business Plan? Mobio INsider Or Keek?

|Includes: KEEKF, LX Ventures Inc (LXVTF)

I have seen an interesting debate recently judging the merits of the business plan of Mobio INsider versus Keek. Mobio is owned by LX Ventures (OTCQX:LXVTF) while Keek is owned by Primary Petroleum (PETEF). I own shares in both stocks so I am bullish on both platforms however I own 230K shares in LXV and 40K shares in PIE so my interest in LXV is about ten times bigger so you know where my biases lie. This will be the last time I talk about the shares or corporate structure in this post as that's a whole other debate. My prime focus here is to make clear my opinion on which platform has the superior business plan. Assuming the eventual goal of each platform is to get bought out (and for those who have heard the words of LXV's leader Mike Edwards you know that's not necessarily the case), which platform provides the best value to the potential suitor?

There's a lot of "us versus them" mentality on the stock message boards between Mobio and Keek which I find to be counterproductive and doesn't even make sense. Mobio and Keek could not be further apart in the social media world in terms of what they do.

Mobio allows users to interact on a personal level with their favorite celebrities. It is a Twitter-like application where one popular user will engage a wider audience. Keek functions more like Facebook where users can share short clips easily with the people who they know well. There is very little overlap between these two applications. Celebrities are not going to use Keek extensively to communicate back and forth with their fans. They might use the app to share videos with their own close personal contacts, but Keek would be inefficient for two-way communication with their fan base.

Mobio could try to implement a Keek-like function into its platform as users, including myself, have taken to communicating with other non-celebrity users on the site. However, this seems very unlikely in the near-term as the Mobio team is focusing the vast majority of their efforts on the celebrity-to-fan line of communication and any additional uses are just a happy trickle-down effect of that. Once Mobio does add video capability, it will be optimized for that line of communication. Keek is a very efficient app for people to share videos using their Smartphones. Mobio would have a difficult time to become as efficient as Keek at this function with its current platform and doing as such isn't even on its radar screen.

So there is really no point in comparing Keek to Mobio as some kind of limited pie where if Keek gets a bigger slice Mobio will get less and vice versa. Each platform will stand or fall on its own merits.

Keek has the advantage over Mobio in terms of being around longer and having a much higher user base. While Keek is "over the hump" in that it has enough dedicated users that will sustain its traffic and legitimacy as a social media tool, Mobio is still largely at the mercy of needing a sufficient amount of celebrity and user engagement to get over that hump as well - a point where celebrities will have no choice but to use Mobio to communicate with their fans because it's so popular.

That being said, Mobio is showing evidence of getting there. It went live on December 1, 2013 and in 2.5 months has an Alexa ranking of better than 10,000 with about 100K users and over 300K pageviews each day with that growing quite quickly. With each passing week Mobio appears to be more and more like a legitimate platform that can be a threat to the Twitter communication and compensation (or lack thereof) model. Keek on the other hand, while ranking very well for a long time on Alexa with a rank around 4,000, for the past year it has stagnated at this level. It has maintained the same amount of traffic to its site but it hasn't grown, although this may be hard to judge because of its nature as a Smartphone app that's downloadable on Google Play and iTunes so traffic may not necessarily have to filter to its own site. Keek downloads are in the 10's of millions so while Mobio has garnered a lot of users quickly, it still has quite a while to go before it can catch up to Keek.

What I like about Mobio and what makes me think of it as the safest potential acquisition target from the perspective of the buyer is that it has built in monetization from day one. When people sign up to Mobio, they are adjusted to the idea that they have to see a few seconds of an ad every so often to reveal the answer to a question that they asked. Keek, Snapchat and others have garnered a high user base because they provided a service that was free and devoid of ads. How will the user base of these apps act when they do try to monetize their services? Will they find them too "spammy" and move on to a platform that offers similar functions without the ads? That's one of the reasons being cited for why Facebook is losing some traffic. Mobio will never have this problem because the users are use to the experience from day one. They will either accept it or they won't and won't sign up in the first place. Mobio won't be subject to an inflated user base which signed up expecting a perpetually ad-free experience.

This can be a huge risk to anyone buying Keek or Snapchat and the like. A buyout, followed by a change in platform to include ads could really be seen as "selling out". There is nothing that is forcing users to use these apps other than that they are trendy and useful. A prospective purchaser is really taking a gamble that they can monetize the app without alienating the user base.

Not only are Mobio users use to the idea of ads from day one, chances are the traffic-drivers, the celebrities, will enjoy getting compensated for their participation on Mobio. If Mobio gets "over the hump" as I explained above, their user base will be a lot more stable and less prone to attrition because the driving attraction to the site will be the celebrity users. When it comes to managing something like Mobio, you don't have to appease millions of users, you just have to appease the few hundred or couple thousand that you sign up - and you appease them simply by paying them a fair share of the earnings that is created from the traffic they drive to the site.

I like Keek as an investment opportunity, but I like Mobio more.

Disclosure: I am long LXVTF, PETEF.

Additional disclosure: I hold positions in securities as disclosed in this article. I have not received any compensation for this article and all opinions reflected herein are my own. The information provided herein is strictly for informational purposes only and should not be construed as a recommendation to buy or sell, or as a solicitation of an offer to buy or sell any securities. There is no guarantee that any estimate, forecast or forward looking statement presented herein will materialize and actual results may vary. Investors are encouraged to do their own research and due diligence before making any investment decision with respect to any securities discussed herein, including, but not limited to, the suitability of any transaction to their risk tolerance and investment objectives.