Shazam

Shazam generated revenue through affiliate commissions when users clicked through to buy identified songs on iTunes or stream them on Spotify — a model that collapsed the moment streaming subscriptions replaced individual track purchases. The company tried advertising but never achieved the engagement metrics to make it work at scale — users opened the app for 15 seconds to identify a song then closed it. By 2016 Shazam was burning $40 million annually against $54 million in revenue and the unit economics were getting worse as streaming platforms integrated recognition directly into their apps. Apple acquired the company for its 100 million monthly active users and immediately made the service free, eliminating the revenue model entirely. The acquisition price was 60% below peak valuation because Apple understood that Shazam's technology was worth less than the user base it had accumulated.

VERDICT: ZOMBIECORN — APPLE PAID $400 MILLION FOR 100 MILLION USERS AND IMMEDIATELY ELIMINATED THE REVENUE MODEL, WHICH TELLS YOU EVERYTHING ABOUT WHETHER SHAZAM WAS WORTH A BILLION DOLLARS AS A STANDALONE COMPANY