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DD AskMeNow Files for Mobile Search Patent
By Wireless Week Staff
June 7, 2006
http://www.wirelessweek.com/article/CA6341701.html
AskMeNow, a wholly-owned subsidiary of Ocean West Holding Corporation, says it has filed for a patent related to what it considers a unique method of generating projectable advertising revenue for mobile search.
The company says the patent application will bolster its growing reserve of intellectual property related to intelligent search and mobile advertising.
AskMeNow says the proprietary software that supports the AskMeNow mobile information platform, including its natural language interaction and search methodology, differentiates the company's technology from others in the increasingly competitive mobile search landscape.
"Access to consumer's mobile phones, the third screen, has become a highly visible and competitive market in recent months," said Darryl Cohen, AskMeNow CEO, in a statement. "A major land grab in mobile search and its technology has increased, and we believe our pending acquisitions and the filings we're putting in place will competitively position AskMeNow in the future."
The company previously announced a relationship with Rogers Wireless in Canada, from which it generates revenue through per-usage fees and 1-1 contextual mobile advertising sponsorships. Irvine, Calif.-based AskMeNow launched officially in November 2005
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Must Read DD Racing to the middle
By Kevin Fitchard
May 8, 2006 12:00 AM
http://telephonyonline.com/mag/telecom_racing_middle/
A MOBILE transaction company is a good thing to be right now. Ask m-Qube and Qpass. The former went to VeriSign for $250 million, the latter to Amdocs for $275 million. They are distinctly different kinds of companies but have one thing in common: They each chart out a section of the nebulous middle territory between the carrier, content provider and customer. Every piece of content purchased is a multi-tiered deal with half a dozen parties getting their share, and the industry seems to be realizing that brokering these millions of miniature deals is a very lucrative business.
So why all of the sudden interest? Wireless content is becoming a big-dollar business, said Jay Emmet, president of the Americas for mBlox. Content is moving from the fringes of the wireless services portfolio to take its proper roll as a significant proportion of average revenue per user (ARPU) and a much higher-margin service than voice, Emmet said. For instance, Cingular last quarter reported a 42% increase in data ARPU in just 12 months, coming in at 10.7% of all revenues. Similarly, Verizon Wireless reported 11.5% of all revenues came from data. Most U.S. carriers have either already broached the 10% mark for data ARPU or are nearly there.
“What we're seeing is that there is a significant amount of revenues coming out of data ARPU,” Emmet said. “The companies that manage this space are no longer seen as start-ups with no revenues. They're seen as high-growth businesses. … In a period of three months, almost all of the independent players have disappeared.”
THE NUMBER of companies that offer these types of transaction and settlement services has certainly dwindled, and not just because of the acquisition sprees of companies like VeriSign and Amdocs. There were once several dozen companies staking out claims in this space, but in the last few years, they've been consolidating. Last year, Qpass bought Encorus, a European mobile payments software developer, and content delivery platform company UCP Morgan. In 2004, m-Qube acquired Sharp Robot, a content download provider. And just last month, Wireless Services Corp. bought Mobile Media North America, an off-deck content distributor and marketer.
That horizontal consolidation, however, has been replaced with vertical consolidation. VeriSign made m-Qube the last helping of its two-year acquisition bin, which included ringtone and game publisher Jamba, multimedia message service solutions provider LightSurf and a handful of other companies ranging from peer-to-peer content platform developers to European application service providers. VeriSign's intentions are clear: to turn itself into the most vertically integrated managed solutions provider with a finger in everything from messaging to billing to the actual content itself.
“The choice is clear,” said Vernon Irvin, executive vice president and general manager of VeriSign Communications Services. “[Media companies] can either go to five separate companies and manage those separate relationships or they can go to VeriSign and focus on their own brands and content.”
Amdocs, being more of a traditional billing and back-office vendor, bought a software and platform vendor instead of an aggregator. Qpass traditionally provides the software that carriers use for authentication, settlement, tracking and revenue assurance of new data services — all in a format that links back into existing customer care applications. Amdocs provides many of those customer care applications to carriers, making the acquisition a very symbiotic fit. While VeriSign gained m-Qube's substantial roster of billing relationships with media companies, Amdocs gained Qpass's even more impressive customer base of major carriers. But even though the roles of the companies seemed perfectly defined, Qpass was in the process of expanding its portfolio into more customer-facing solutions. Acquiring UCP Morgan gave it storefront, catalog and merchandizing capabilities and a direct relationship with the content provider.”
“Qpass's technology is very important because our customers want to manage their services in-house,” said Mike Couture, Amdocs vice president of marketing. He added that Qpass does considerable work in managed systems, which fits right into Amdocs's growth strategy. “Payments is a space we've been in, but we didn't have the ability to support the entire value chain from content provider to handset,” he said. “Qpass gives us the ability to bring together all of the pieces.”
Now the industry is eyeing content delivery platform provider Motricity, which lost m-Qube to VeriSign. Motricity has built a sizable carrier customer base for its Fuel platform, counting most of the Tier 1 providers in the U.S. as its customers as well as a handful of Tier 2, mobile virtual network operators and international carriers. But its interest in m-Qube clearly indicated it wanted to move beyond the carrier platform itself and into the actual content transaction. It is, in fact, moving that direction, with or without m-Qube.
Last year Motricity bought M7, which develops community content portals, and it has partnered with payment and settlement software provider Valista to provide an end-to-end wireless retail platform that bridges the gap between the content itself and how it is paid for. Dov Cohn, Motricity senior vice president of marketing solutions development, said that the company isn't actively in the market for a replacement for m-Qube.
“Our strategy is to deliver as much value to our customers as possible,” Cohn said. “If we see a component or components that our customers are asking for, we'll definitely look at it.”
ONE THING ALL OF THE companies involved in this space agree on is that this kind of vertical consolidation will continue. MBlox, Mobile 365, Wireless Services and Valista are all possible acquisition targets, and there are dozens of other regional aggregators and small-platform providers that could be tossed into the consolidation mix.
As for acquirers, it may not be just the billing vendors like CSG and Oracle and the content platform providers like Motricity that are interested. All of the major wireless infrastructure vendors in the last few years have been focusing on their managed/hosted services platforms as well as delving deep into the content space. Nokia went so far as to launch its own content management, delivery and settlement platform, Preminet, which failed to attract much attention beyond a few carrier deals.
mBlox is probably now the most attractive of those targets, having processed 1 billion transactions over short message service (SMS) last year. Last month the company announced it has become off-portal content merchandiser Bango's preferred SMS transaction provider, giving it a leg up in one of the industry's fastest growing content markets. mBlox is resolute in maintaining that it can tackle the market alone as a best-of-breed aggregator, but in an interview last month, Executive Chairman Andrew Bud said it would certainly entertain any offer if the price is right.
If any more companies do seek to enter the transaction space, they will likely have to do it through acquisition. All the established transaction companies have already built up extensive relationships with carriers, third-party content portals and the media companies themselves. But more significantly, transactions are becoming a far more complicated business, said Fran Heeran, vice president of product management for Valista.
The SMS content billing model championed by mBlox and m-Qube is gradually becoming obsolete as the industry is moving toward wireless application protocol (WAP) billing models, he said. While browser-based transactions have been ungainly in the past, the new merchandizing models — rife with promotions, multi-vendor merchandizing and variable settlement terms — is becoming far too complex for a mere premium SMS transaction, Heeran said.
Simultaneously, the technology is becoming more sophisticated, on-deck content portals and better user interfaces are eliminating the clunkiness of the browser buy page. It won't be long before the two trends gel and create a much bigger market for WAP. But those transactions will require a much tighter coupling between the carrier's billing systems and the content provider, with multi-layered rules and restrictions differing from carrier to carrier.
It won't just be content relationships that the transaction companies have over the industry, it will be expertise in the space. That kind of expertise, Heeran said, will make the transaction enabler or software provider a critical requirement for any company that wants to play in the content space.
“The billing guys are looking to move up the value chain, and the content providers at the top of the value chain are looking to move down,” Heeran said. “Everyone is looking to capture more of the value chain,”
It might wind up a race to see which can get to the middle first.
Companies in the mobile transaction space
mBlox - The leading aggregator of SMS transactions in Europe, mBlox contracts directly with content providers like big media brands to provide billing and settlement service for more than 1 billion message transactions a year.
m-Qube - mBlox's biggest competitor, North America's biggest transaction aggregator was bought by VeriSign in March. m-Qube brokers the billing and settlement for dozens of brands such as Sony Pictures, Warner Music and Major League Baseball.
Qpass - Primarily a back-office solutions vendor, Qpass software allows carriers to take many of the billing; value-chain management; content management, delivery and merchandising functions in-house. But before Amdocs announced its planned acquisition of Qpass last month, the company was expanding its business to provide more front-end facing services.
Valista - Another software vendor, Valista also sells its transaction management solutions directly to carriers, but it has ventured into managed/hosted services and has started partnering with content delivery companies like Motricity.
Mobile 365 - One of the big SMS interoperability exchanges, Mobile 365 routes 25 billion messages between carriers each year and has extended the billing and settlement capabilities of that network to include more advanced transactions such as ringtones, games and MMS.
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DD Third Screen eyeing more funding rather than sale
Wed Jun 7, 2006 5:52pm ET
By Sinead Carew
http://today.reuters.com/investing/financeArticle.aspx?type=mergersNews&storyID=2006-06-07T21520...
NEW YORK, June 7 (Reuters) - Privately held Third Screen Media is looking for additional funding to expand its mobile advertising business rather than trying to sell the company, its top executive said on Wednesday.
The comments follow a recent Wall Street Journal report that Microsoft Corp. (MSFT.O: Quote, Profile, Research) was in talks to buy Third Screen to gain access to its technology and relationships with Third Screen's clients, which include USA Today and Weather Channel.
But Third Screen's Chief Executive Thomas Burgess said the two year old company, which has received about $8 million in funding to date and is looking for more, would focus on growing the company organically rather than looking for a sale.
"Right now we're not going to sell the company. We're a leading company going forward on our own." he said. "In two, five or 10 years who knows ... I don't want to say there's never been any conversations, but right now it's not our plan."
Wireless providers, advertisers and and media companies are all eyeing wireless devices as potential vehicles for advertising as more and more cellphones have high quality color screens, video players and web browsers.
Third Screen hopes to carve out a niche in this market by selling software that specializes in placing ads on mobile video clips, Web sites and video game players.
It also offers a service connecting advertisers with publishers of mobile games, video clips or Web sites with an aim to kick start the nascent market for mobile advertising.
Burgess said he hopes the company, which has generated revenue this year and last year, will turn a profit in 2007, but he did not give a specific forecast.
Most of the company's revenue currently comes from its services business, but it expects software and services to have equal weight next year, Burgess said.
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DD Fox Exec: User Info Most Valuable MySpace Asset
by Shankar Gupta, Friday, Jun 9, 2006 6:00 AM ET
http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=44303&Nid=20848&p=...
ALTHOUGH MYSPACE HAS BROUGHT SIGNIFICANT traffic to the Fox Interactive family of sites, the biggest asset the network has received from the $580-million-dollar purchase is the information that the sites' millions upon millions of users provide, said Ross Levinsohn, President of Fox Interactive, at a conference in New York City Thursday.
"The digital gold inside of MySpace wasn't the number of users, but the information they're providing, structured and unstructured data," Levinsohn said--both demographic and psychographic data that Fox Interactive can use to suss out the brand preferences of young people on the Web.
Levinsohn said that the site isn't intended to be like a portal, and that "it's more about [users] presenting themselves to the world" by creatively expressing themselves through their MySpace profiles. "It's important for us not to suppress that--not to push content," he said.
More mainstream marketing on MySpace will be kept to the "well-lit" areas of the site, like the Books, Comedy, Film, and Games sections rather than on individual profile pages, which have less strict content controls--something many advertisers have expressed concerns about. ""We want to make it easier for marketers to work with us," Levinsohn said. "We have a lot of work to do."
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DD Global 3G subscribers pass 100 million
09 June 2006
http://www.telecoms.com/itmgcontent/tcoms/news/articles/20017356597.html
More than 100 million mobile phone subscribers have signed up for 3G, according to the latest report from Strategy Analytics on Thursday.
According to the report, around 70 million subscribers have signed up for WCDMA technologies, with another 30 million using CDMA2000 EV-DO systems. It is widely acknowledged that EV-DO entered the market significantly later than WCDMA.
The research firm said that "finally, 3G has become a want-item for the user.
Sara Harris, who authored the report, said "Much of this success is due to the strong pushes by influential carriers like NTTDoCoMo, Hutchison 3G and SK Telecom... and more recently Vodafone and Verizon Wireless, who have worked hard to drive 3G uptake among their subscribers."
Strategy Analytics believes the US market is set for rapid growth during 2007 when the country's largest mobile phone provider Cingular Wireless launches its HSDPA technology.
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Movieguy, Amen! Well said!!! EOM
OT Interesting Google / search related article for American Idol fans
American 'Idol'izing Google Trends
http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticle&art_aid=44298
by Gord Hotchkiss, Thursday, Jun 8, 2006 4:30 PM ET
LET ME APOLOGIZE RIGHT OFF the bat. I'm going to jump on a pop culture bandwagon, but I'm doing it to prove a point. Search trends reflect the interests of our society, and they can provide an invaluable way to gain intelligence about what's on the public's mind.
First of all, some facts to consider:
The most votes ever cast for a presidential candidate were 54.5 million, for Ronald Reagan in 1984.
On Wednesday, May 24, 63 million votes were cast in the final voting episode of "American Idol"
All votes for "American Idol" were cast in a 2-hour window. Typically polls are open for most elections for 13 hours, not including advance polling.
In "American Idol," there was not one hanging chad.
Obviously, "American Idol" struck a chord with the public this year. Some say the final choice of Taylor Hicks was a surprise, but was it? With the help of Google Trends, I did a little forensic investigation and charted the rise in popularity of the contestants, as captured on Google.
A couple of caveats. Total search volumes are an approximation, as Google Trends doesn't show actual numbers, and currently Google is only showing trends up to the end of April. But as you'll see, for the purposes of this column, that's enough.
I divided the contestants into three groups based on indicated search volumes: the Front Runners, the Also-Rans and the Basement Dwellers. I've included a link to the chart for each.
The Front Runners
Taylor Hicks started the strongest out of the gate, dominating search volumes in February during the early rounds. Although he lost ground to Kellie Pickler and Chris Daughtry in March, he came back strong in April, only being edged out in total volume for the month by Kellie, due to a surge in searches the week she was voted off.
Pretty boy Ace Young was No. 2 in February, but lost steam moving into March and never seemed to recover. Chris Daughtry was a slow starter in February, but built steam through strong performances in March. Unfortunately, he seemed to lose his edge in April, as search volumes started to drop from their high in mid-March.
The sleeper in this group was Katherine McPhee, who slowly built up steam through late February, March and April, with a huge peak towards the end of April.
If one was to predict outcomes based on search trends from February through April, I would have called it this way
1. Taylor Hicks
2. Katherine McPhee
3. Chris Daughtry
4. Kellie Pickler (one has to adjust for the spike on the week she was voted off)
Remember, this was almost a full month before the final show.
The Also-Rans
In the middle of the "Idol" pack was a group that just couldn't seem to spark the interest of America, despite significant talent.
Lisa Tucker started off the strongest of the group, but could never seem to rise above the search volumes generated mid-February. There was no "buzz" around her. Kevin Covais, on the other hand, emerged out of nowhere and did build through February and March. It's also interesting to note that when many of the contestants were voted off, their search volumes dropped off the Google trend radar. However, Kevin was voted off March 22, but kept showing up well into April.
Diva Mandisa started from nowhere, but generated some of the highest search volumes of all on the night she was voted off. Sometimes you don't know what you've got till it's gone. And poor Elliott Yamin didn't have a chance. Despite a great voice (maybe the best, if you believe the judges) he just didn't turn America's crank. Although he built search volume slowly, he never emerged as a contender.
The Basement Dwellers
The three who were certified "buzz"-less were Paris Bennett (maybe she should change her name to Hilton), Bucky Covington and Melissa McGhee.
Paris started off hot right out of the starting gate in January, but never went anywhere from there. It seems we got used to the dynamic vocals, the pixie-like speaking voice and the cool hats--and ceased to care. Bucky and Melissa really only attracted significant volumes on the days they were voted off.
The point of this exercise is this. Search volumes do mirror public opinion, and can act as an amazingly accurate indicator of our collective interests. If you would have had access to search volume information, you could have called the results of "American Idol" long before the final show.
The other thing that was interesting was to see the power of community, both in the search results and the actual results. When you look at the top locations for searching, they are, in order: Greensboro, N.C., Charlottesville, Va., Raleigh, N.C., Charlotte, N.C. and Atlanta.
The North Carolina contingent was incredibly active in its quest for information on Chris, Kellie and to a lesser extent, Bucky, far out-searching the rest of the country for those individuals. The search demands for Taylor, Katharine and Ace were spread evenly throughout the country.
If you haven't played with Google Trends yet, give it a spin. It can provide a fascinating glimpse into search buzz, and through it, what's on our collective minds at any given time, on any given subject.
Gord Hotchkiss is the president of Enquiro, a search engine marketing firm. He loves to explore the strategic side of search and is a frequent speaker at Search Engine Strategies and Ad:Tech. Check out his blog at http://www.outofmygord.com
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QCurt, See these posts regarding the list of SHM questions:
http://www.investorshub.com/boards/read_msg.asp?Message_id=11097342&txt2find=questions
http://www.investorshub.com/boards/read_msg.asp?Message_id=11148876&txt2find=questions
http://www.investorshub.com/boards/read_msg.asp?Message_id=11316767&txt2find=questions
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DD From PP - Scanbuy And Nextcode Use Camera Phone To Compare Prices
http://theponderingprimate.blogspot.com/2006/06/scanbuy-and-nextcode-use-camera-phone_05.html
E-Commerce gives a summary of all types of price comparison engines.
Comparison shopping engine vendors have developed new services to support wireless devices, such as cell phones.
Mobile searching also offers users new functions: they can have their camera phones scan bar codes with their phones for instant price checks.
Scanbuy and NextCode have developed such features and comparison shopping engineers are reportedly ready to incorporate them into their services.
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I wonder what's the status of Neom's LOI with Nextcode???
http://www.neom.com/press_releases/2004/20041206.jsp
NeoMedia Signs LOI to Form Strategic Partnership with Nextcode Corporation For Joint Marketing/Sales Efforts of PaperClick Licensing and Internet Linking
Fort Myers, FL, December 6, 2004 -- NeoMedia Technologies, Inc. (OTC BB: NEOM), today said it has signed a non-binding Letter of Intent with Nextcode Corporation to form a strategic partnership, with joint marketing and sales efforts, involving use of its PaperClick® technology and Nextcode Corporation's barcode reading software.
NeoMedia (www.neom.com), based in Fort Myers, develops software and patents technologies which link physical objects, such as consumer products and business assets, directly to targeted online data. Nextcode (www.nextcodecorp.com), based in Concord, Mass., provides barcode reading software and technology designed to enhance the usability of mobile phones and enable easy access to Internet-based content, services and commerce.
When finalized, the one-year renewable agreement would give the companies mutual rights to resell PaperClick Client Software™, PaperClick Code Activation™, PaperClick Server Software™ and PaperClick Integration Services™, as well as Nextcode's mobile barcode decoding applications and Nextcode's code creation and publishing systems.
PaperClick: The Linking Platform to the Internet
NeoMedia President, CEO and COO Charles T. Jensen said the agreement lays out basic strategies for his company's patented PaperClick technology platform to be used in conjunction with Nextcode's unique mobile barcode reading and code development technology.
"NeoMedia believes Nextcode provides impressive barcode technology specifically designed for the key technical and business demands of mobile phone environments," Mr. Jensen said. He said the agreement calls for NeoMedia and Nextcode to actively promote each other's complementary solutions to the burgeoning mobile content and commerce marketplace.
"Nextcode is very pleased to be teaming with NeoMedia," said Jim Levinger, the company's CEO. "It is great to have a partner who can provide a flexible and robust platform, supported by patented technology, to help us bring exciting new barcode enabled services to mobile users." Mr. Levinger said that during the term of the proposed agreement, Nextcode plans to use PaperClick as the product for linking to Internet content consistent with the methods outlined in NeoMedia's patents.
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Re: Where is everyone? Just waiting for something newsworthy or some great DD to post. I am hoping we will get some closure on the HipCricket deal soon. Also, maybe some additional news related to the World Cup. And then there's Scanbuy...seems like something could materialize with them at any time if both parties can come to terms.
By the way, if you are not already aware, SOG will not be posting for awhile while he is a candidate for a position with Neom.
If he gets the job, we may never hear from him again...understandably so. If he doesn't, then hopefully his valuable contributions will once again resume on this board.
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YJ, I agree and having been watching ActiveSymbols closely. I have also alerted Management. Below are some past postings regarding them:
http://www.investorshub.com/boards/read_msg.asp?Message_id=10345761&txt2find=activesymbols
http://www.investorshub.com/boards/read_msg.asp?Message_id=10345842&txt2find=activesymbols
http://www.investorshub.com/boards/read_msg.asp?message_id=10407510
http://www.investorshub.com/boards/read_msg.asp?Message_id=10564580&txt2find=activesymbols
http://www.investorshub.com/boards/read_msg.asp?Message_id=10564568&txt2find=activesymbols
http://www.investorshub.com/boards/read_msg.asp?Message_id=10349637&txt2find=activesymbols
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DD Searching for the Google of cell phones
Can startups like 4Info and Promptu challenge the Web search giants in the mobile market?
By Patrick Baltatzis, Business 2.0 Magazine reporter
May 30, 2006: 1:36 PM EDT
http://money.cnn.com/2006/05/30/technology/business2_thirdscreen0530/index.htm
SAN FRANCISCO (Business 2.0 Magazine) - On the Web, Google may have search all wrapped up. But search on cell phones is still a wide-open, fast-growing field that some startups think will make a good business.
There are plenty of reasons to be skeptical. For one, there's the state of Web access on cell phones. If you were using the Internet a decade ago, the mobile Web today looks familiar: Small screens, slow processors, and spotty network connections make it a less-than-ideal experience.
Going from the rich experience of the Web on a computer to the limited Web capabilities of cell phones, feels like "we have regressed," says Lisa Wehr, president of Oneupweb, a search-engine marketing company which has advised some clients on how to capitalize on mobile search.
But a keen understanding of that less-than-ideal environment may just be what gives startups the edge over the search giants.
"We think that pure plays will pose a real challenge to the likes of Google and Yahoo," says Jaimee Minney, a spokesperson for research firm M:Metrics.
Answers, not links
While Google and Yahoo are trying to extend their Web search engines into the wireless world, mobile search startups like 4Info and Promptu are trying to make the most of what people use cell phones for today -- voice calls and text messages.
4Info, a Palo Alto, Calif. startup, is aiming to popularize text messaging as a way to search the Web, presuming that cell-phone users want quick answers rather than page after page of search results. By sending text messages to 4Info's designated shortcode -- an abbreviated phone number used for information services -- users can receive sports scores, weather reports, flight information, and even package-tracking data. 4Info plans to sell keyword-related advertising, and has struck a deal with Gannett (Research) to promote its text-message services in the pages of USA Today.
"People want answers, not links," says Amol Joshi, 4info's senior vice president for business operations. "Google has the disadvantage of being a Web search firm."
Promptu, a six-year-old, privately held company based in Menlo Park, Calif., is taking advantage of the fact that phones are mostly used for voice calls, by creating voice-recognition systems that search for content. It plans to sell its service to wireless carriers, to make it easier to search their libraries of content, like ringtones, wallpaper images, and games.
"The more content that carriers can provide to their users the better it is, but adding another title to their catalogue is also adding to user frustration, since scrolling through the catalogs is getting harder," says Brady Bruce, senior vice president at Promptu. "With voice search, the whole process is much faster." The company is hoping to deploy its first system early next year.
Even with these innovative ideas, Google (Research) and Yahoo (Research) are casting a shadow over startups in more ways than one. Both are adapting their services to the wireless Web, employing text-message search similar to 4Info's.
And even though 4Info and Promptu have both attracted venture-capital financing, some investors remain skeptical of the prospect of funding a competitor to Google or Yahoo. Maha Ibrahim, general partner at venture capital firm Canaan Partners, says she's been pitched by several mobile-search companies, but didn't think much of their business models.
"Interesting companies to us are those that can drive a lot of revenue to carriers," says Ibrahim. (Carriers, sensibly, want to promote wireless applications that encourage customers to use more of their voice and data services.)
"So far we've only seen straight search companies with ad revenue models and that will not do it," she explains. "We're waiting for a killer app in mobile search."
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DD Social Networking Goes Mobile
So-called "friend sites" are wising up to wireless. Before long, everyone's cell phone might make space for MySpace
http://www.businessweek.com/print/technology/content/may2006/tc20060530_170086.htm
MySpace is dipping its toes into wireless waters -- and is poised to take a plunge. In April, the social networking site struck a partnership with Cingular Wireless, the largest U.S. mobile-phone service provider. In May, wireless startup Helio began offering phones preloaded with MySpace features.
Under the Cingular deal, subscribers get short text messages when new comments or friend requests get posted to their MySpace profile. Helio phones include applications that make it easy for customers to view friends' profiles and post comments and photos onto MySpace (see BW Online, 05/03/06, "Helio's Hot New Line").
BUILT-IN BENEFIT. The site is pleased with what it's seen so far. "We thought there was significant demand for this, and our initial thoughts were confirmed," says Colin Digiaro, senior vice-president of sales at MySpace, a property of News Corp. (NWS ). "[Now,] our advancement into mobile is one of the key initiatives on MySpace, extremely key to our growth. It's a huge opportunity." Â So huge, in fact, that MySpace plans to make its mobile features available through all major U.S. carriers by early 2007, says Digiaro. If MySpace has its way, the network's mobile applications will come preloaded onto all mobile phones sold, becoming as integral a wireless handset feature as an alarm clock, calendar, or mobile e-mail, says Digiaro.
MySpace, which boasts some 80.7 million registered users, isn't alone in betting on a wireless social networking future. Companies including Google (GOOG ), Yahoo! (YHOO ), and Facebook.com, the college and high school community site, have designs on mobile social networking as well.
FASTER FEEDBACK. Many industry analysts have yet to make forecasts for this nascent market, but early signs suggest there could be demand, particularly from teens and young adults. Already, 33.2% of 18- to 24-year-old Americans post photos to Web sites via mobile phones, according to mobile consultancy M:Metrics. By contrast, only 18.7% of these young adults play downloadable mobile games, one of the most successful forms of mobile content to date -- and a $600 million market in the U.S. last year, according to consultancy IDC. "This suggests to me there's absolutely interest in participating in mobile social networks," says Mark Donovan, an analyst at M:Metrics.
Just how big could mobile social networking get? This application's usage could become "as big as online social networking," says Dennis Crowley, founder of wireless social network Dodgeball, owned by Google. About 45% of active Web users have been to online social networking sites, according to a recent study by Nielsen/NetRatings. As MySpace expands beyond its core market of teens and young adults, "We expect penetration of MySpace mobile to match penetration of cell phones," which are owned by 80% of Americans, says Digiaro. Mobile access could become even more prevalent outside of the U.S., where in some cases more people use cell phones than personal computers to surf the Web.
Indeed, it's the cell phone, rather than the personal computer, that's the constant companion for today's hip and socially networked. Why wait till you get home to log onto the PC to tell your 20 closest personal friends about your date? Teens can use a network-friendly cell phone to relay stories, pictures, and videos instantaneously. "You can use [the mobile application] in this two- or three-minute gap while waiting for a train," says Kakul Srivastava, product manager for photo-sharing site Flickr, which is owned by Yahoo and allows for mobile picture posting. "People are out there, living their lives. They are not sitting in front of the computer."
CLICK OF THE FUTURE. Cell phones offer other capabilities PCs lack. Dodgeball is working to allow users to see an up-to-date map of friends' locations, collected through the Global Positioning Systems (GPS) available in most phones. When users of JuiceCaster.com, a property of mobile marketer Juice Wireless, post pictures or video from their phones, the service will soon automatically provide information on locations where the pictures were shot.
Venture capitalists are taking note. In April, Juice Wireless closed its second round of funding, raising $3.5 million from a group led by 21 Ventures. Juice will use the proceeds to grow its social networking service.
Wireless industry giants aren't sitting still either. In April, Facebook began allowing users of Cingular, Sprint Nextel (S ), and Verizon Wireless to receive friend requests on phones and reply via short text messages (SMS). In April, the world's largest cell phone maker, Nokia (NOK ), said planned multimedia phones will come integrated with Flickr, allowing users to post photos shot with their mobiles onto the Flickr site with one click. "Virtually every online social network application is going to have a mobile component over the next year or two," says Jill Aldort, an analyst with the Yankee Group.
Wireless social networking could mean big bucks for the service providers that charge $5 or more a month for Web time. MySpace users spend an average of 215 minutes a month on the site. Cingular, which currently hosts four social networks -- Rabble, CoolTalk, MySpace, and The Facebook -- hopes to host as many of those networks as possible in the future, says David Garver, the company's executive director for segment marketing and sponsorships. The carrier also is working to extend the number of features offered to mobile social network users. "Will social network applications be some of the biggest applications Cingular sells? Yes," Garver says.
HOOKING UP. Within two years, at least 5% of all text messages sent through wireless networks may relate to social network interaction, estimates Tole Hart, an analyst with Gartner. Today, SMS is a $3 billion market in the U.S. The application could also encourage more users to buy unlimited data plans, allowing for mobile Web access. Finally, there's mobile advertising to fall back on. Because they group users into highly targeted categories, such as music fans or people located in a particular city, mobile social networks might be able to charge a premium for ads, says Nick Desai, founder of Juice Wireless, which plans to start selling ads on JuiceCaster in September. "Advertisers are very excited," he says.
While standalone wireless social networks like SMS.ac and Dodgeball pioneered the genre, they and sites like them are increasingly partnering with other sites to gain traction. "I don't think there's a lot of opportunity for networks built entirely around a wireless persona," says Charles Golvin, an analyst with Forrester Research. "What's going to be much more successful are extensions of existing communities." Dodgeball, for one, is talking to fellow Google property, Orkut.com, which is hugely popular in Brazil; details on the collaboration are not yet available. Â Much still remains to be done to smooth out the wrinkles of mobile social networks. Phones have to allow for easier typing. Carriers have to introduce more features, making mobile social networking a truly rich experience. And mobile communities may have to grow from tens of thousands of users today to millions of users.
EASY SELL? To generate buzz, many mobile communities are readying new marketing campaigns. This summer, JuiceCaster.com will challenge users to go into one of 100 selected restaurants and post mobile reviews. Every week the company will draw three winning restaurants, rewarding people who reviewed them with $100 bills. And Google might kick off a marketing push around Dodgeball later this year, says Crowley.
But judging from the earlier successes of plain old social networking, marketing the mobile message may not be a very tough sell at all.
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Kharif is a reporter for BusinessWeek Online in Portland, Ore.
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SS9173
In regards to the list of shareholder questions, Chuck Jensen called me promptly afterwards.
Success622 was correct in her post #74479 http://www.investorshub.com/boards/read_msg.asp?Message_id=11206102&txt2find=qcurt
Nothing was said to me that was not already disclosed in the public domain.
I don't expect Management to issue a Letter to Shareholders. Alternatively, I expect Management to answer many of the questions through their presentation content at the June 28 Shareholder Meeting. I have also been reassured there will be ample time to have discussions and questions with the entire executive team both before and after the SHM.
My conversation with CJ will remain private. However, I have made some personal conclusions from that discussion and prior correspondence, which are again reiterated in my post earlier today http://www.investorshub.com/boards/read_msg.asp?message_id=11308997
I will be in attendance at the shareholder meeting and will issue a "no spin" report to this board shortly thereafter.
Hope that helps.
SS9173
DD Mobile IM held back by 'traditional' operators
It could be the new SMS, say analysts - so telcos take note...
By David Meyer
Published: Thursday 25 May 2006
http://networks.silicon.com/mobile/0,39024665,39159139,00.htm
Analysts have warned that mobile operators may fail to capitalise on the full benefits of instant messaging, which has the potential to overtake text messaging in popularity in the mobile space.
Ovum's John Delaney said on Wednesday: "The main replacement for SMS will be mobile IM."
Citing a "faltering of growth" in the SMS market - outside the UK, at least - Delaney told delegates at the Global Messaging Congress in London that mobile IM "does it better but if operators price it right it doesn't do it any cheaper".
He later told silicon.com sister site ZDNet UK he believes "IM will gradually take over from SMS in the next five years in Europe".
Delaney's views were echoed by Paolo Simoes of Portuguese carrier TMN, who said: "IMS-enabled IM/SIP messaging on convergent devices will be the predominant mobile messaging technology of the future, replacing all others."
But James Enck, an analyst with Daiwa Securities, believes operators could lose out in mobile IM because of their traditional approach to interoperability.
He said on Thursday: "If it's implemented in the way that carriers typically do - which is to pretend that the rest of the world doesn't exist - then it'll be a big failure."
Enck also pointed to IM's capacity for showing other users' online status as one of several discouraging factors for telcos.
He said: "Presence in IM is certainly very compelling to the end user but, if you think about the revenue model for cellular operators, a lot of their money is made from a lack of transparency," highlighting the revenues gained through roaming and voicemail. He added that the likelihood of widespread flat data rates in the near future would also make the proposition unattractive, as "SMS is the most profitable product in the history of telecoms".
The main efforts towards interoperability were being made by "IM giants", and "independent players who have a solution on the software side", said Enck.
The last year has seen IM interoperability agreements between MSN and Yahoo!, and - through Google's recent investment in AOL - between Google Talk and AOL's client.
Handset vendors were also an "important wildcard", said Enck, who suggested Nokia's decision to open up its new series of mobiles to third-party softphone client developers indicated it had lost patience with carriers' ability to take the initiative.
Nokia also teamed up with Google on its recent 770 wi-fi tablet, which has no GSM capability but now supports VoIP (it comes pre-installed with Google Talk) and Jabber-based IM.
Operators such as Orange, T-Mobile and Vodafone did agree earlier this year to work towards interoperability for any proprietary IM clients but observers have suggested browser-based clients could prove more popular because of their large existing communities.
More competition to own-brand clients could come from social networking operations such as MySpace, which recently soft-launched its IM client and earlier this year went mobile in partnership with new US phone brand Helio.
Enck said: "It's not just the major usual suspects [such as MSN] but community interests and social networks who've got a major lead on the carriers in this space."
David Meyer writes for ZDNet UK
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SS9173
DD We've Got Another Hot One, America! Cingular's Text Messaging Results Set New Record on the Fifth Season of Fox's 'American Idol'
http://cingular.mediaroom.com/index.php?s=press_releases&item=1562
Cingular Records more than 64.5 million "American Idol"-related Text Messages
ATLANTA, May 25 /PRNewswire/ -- Cingular Wireless announced today it has shattered its own record for wireless text messaging during the fifth season of "American Idol." Cingular recorded more than 64.5 million text messages throughout the show's season, breaking last year's record of 41.5 million text messages. Text messages include votes, trivia, sweepstakes entries, TXT chats, fan club and vote number reminder.
Another Great Season of Idol-themed Content
Cingular introduced a lot of great "American Idol"-themed content this season, but its newest offering, Live Idol Tones, stole the show. Cingular broke new ground in the music industry with the tones letting Cingular customers purchase and download ringtones and answer tones of select "American Idol" performances* just 24 hours after they were performed live on the show. Typically, traditional recorded music requires months to go from recording to distribution. Last week, Cingular's Live Idol Tones category of ringtones was one of the top sellers, and the company expects the same stellar performance again this week.
"We are pleased to have played a role in what was another great season of 'American Idol'," said John Burbank, vice president of marketing, Cingular Wireless. "We knocked Idol-related text messaging out of the ballpark and added another home run with our Live Idol Tones which capitalized on the passion 'American Idol' fans have for their favorite contestants."
Cingular customers also had exclusive wireless access to "American Idol" throughout the season with services including TXT chats with Idol contestants, and convenient vote number reminders listing all of the "American Idol" contestants who performed that week. In addition, Cingular customers also connected to the show through the Idol Wireless Fan Club which let them keep up with the latest Idol news, play Idol Trivia on their wireless devices or download "American Idol"-related ringtones such as the show's theme song, or songs from former Idol winners and contestants. And on May 23, Cingular awarded Joanne Petrella from Tampa, Florida a $100,000 prize when she won the Cingular "American Idol" $100,000 Trivia Challenge in Los Angeles before the show's finale. Hosted by former Idol contestant Tamyra Gray, Petrella competed against 16 other contestants and answered the most correct questions about "American Idol" history, former Idol contestants and memorable moments from the show. Trivia contestants were selected through text entries and Cingular radio promotions held in different cities throughout the country.
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SS9173
Re: A/S share increase
See my post http://www.investorshub.com/boards/read_msg.asp?message_id=11280205
The referenced post is my opinion. However, this opinion was not made in a vacuum. It is based on reflecting on several communications that I have had with Management and drawing a conclusion. Although Management has not told me the exact reason for the A/S share increase, my belief in what I have posted is very strong.
SS9173
Banks, Yup...there is no question in my mind that their strategy is to become the market share leader for mobile marketing, and IMO this goal has everything to do with the proxy. See my post #74681.
http://www.investorshub.com/boards/read_msg.asp?message_id=11234752
SS9173
Great news! NMPR will be big all by itself some day. It's not the reason I invested in Neomedia, but I support it wholeheartedly. ROCK ON, NMPR!!!
SS9173
OT LOL EOM
Success, thank you for this excellent DD on Scanbuy's patent applications. It would appear this is very, very encouraging for Neom to end up with a positive result for the ongoing lawsuit against Scanbuy.
SS9173
Great to see the WSJ article and related PR giving Neom lots of good exposure today. Also nice to see the pps stay above that .20 threshold. Although I am pleased to see that PC will be released later this year, I wish we had more insight as to why it has been delayed this long, and just how soon it will be released to the public.
SS9173
DD Don't be afraid of the big bad Net
24 May 2006 | 04:49
http://www.telecoms.com/itmgcontent/tcoms/mem06/news/articles/20017353765.html
The advance of internet applications into the mobile space may be a threat but it also presents major opportunities for operators who should not fear the likes of Google, Yahoo and Microsoft according to Steve Van Zanen, VP market development for messaging at LogicaCMG.
Playing down the impact disruption from instant messaging systems which have flourished on the internet, Van Zanen conceded the threat "is major" but not insurmountable. The key, he argues is the relationship mobile operators have with their customers.
"You (operators) have a billing relationship with their own customers. You know the community they talk to their age and so on... In other words you have more information on that individual than say a Google. That can then be translated into revenue."
The problem however is that "operators are not capitalising on that knowledge, they are not even ensuring that their users know how to use their phones. If that's the case, how will they know what services are available."
As more and more internet based applications make there way onto the mobile space, Van Zanen sees the challenge for operators lying not in competitive applications but rather in understanding precisely what a consumer wants and providing it with a minimum of fuss.
"Consumers are interested in ubiquitous access and personalisation through mixing and matching. They are interested in services that are aggregated for them. Who is better placed to know and provide exactly that? Google? Yahoo. No, it's the Vodafone's and T-Mobiles who have that knowledge."
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SS9173
IMO, these 3 bolded paragraphs from the 10K filing tell us a lot in regards to Neomedia's future strategy and have a lot to do with the reason for the requested A/S increase in the proxy.
Essentially, Neom will become the SuperCompany through THEIR consolidation of the mobile marketing industry. The opportunity is NOW so expect to see a second wave of acquisitions starting during the second half of the year upon proxy approval.
Revenue growth will accelerate as Neom becomes the market share leader, and the market will eventually reward the share price as this occurs tempered of course for the added dilution that will be necessary.
Here are the 3 paragraphs from the 10K Competition section:
In the European market, where mobile marketing has been embraced by many
large brands (and poised to grow exponentially--see Industry Section) and
numerous consumers, the competition is quite fragmented by geographic region and
by product and service offerings. For example, while Flytxt, Aerodeon and
Enpocket have traditionally competed with NeoMedia companies Sponge and 12snap
in the UK mobile marketing marketplace, Mindmatics has provided the principal
competition in Germany. Additionally, Spielplatz.cc is one of the larger premium
players in Germany, Austria and Switzerland. Also, Austria-based DIMICO is
focused on premium SMS connectivity and messaging.
In general, due to the relative immaturity of the mobile marketing
industry, small players have sprung up offering very specialized products and
services. This is even more pronounced in the U.S. where mobile marketing has
mostly been confined to text-to-vote applications.
As the mobile marketing industry matures, NeoMedia expects consolidation
as industry leaders emerge. Moreover, NeoMedia believes its well positioned at
the onset due to the intellectual property, including many patents, on which its
products and services are based. NeoMedia expects that its intellectual
property, coupled with its early aggregation of proven market leaders, will
serve as a competitive advantage as this market rapidly matures.
JMHO
SS9173
DD Yahoo Mobile is sponsoring the World Cup
From Moconews.net email:
We have obtained some screenshots of the downloadable mobile app Yahoo is going to launch by the end of this month..this is the official FIFA World Cup mobile app, which is being launched by Yahoo. The mobile app will be a fr*ee download, and will have real-time scores etc...this will be available worldwide.
The portal is also the official partner of the tournament on the online side.
Click on the pic below for more screenshots.
The screeenshots are here
http://fifaworldcup.yahoo.com/06/en/
http://fifaworldcup.yahoo.com/06/en/m/
http://flickr.com/photos/13736953@N00/sets/72057594138597343/
SS9173
OT Thanks, Steelers Fan EOM
YJ, an observation and a question:
1) If you watch the video and look carefully when they show a close-up of the phone screen, you will see "options" in the lower left corner. I point this out in reference to Lesnshawn's recent post: http://www.investorshub.com/boards/read_msg.asp?Message_id=11163032&txt2find=options
2) Is Scanbuy the only company (of those listed) that enables the public to download this type of software? We know it isn't available to the public at the Paperclick website. I quickly, but not thoroughly checked the other links, and couldn't find a similar software download. Nevertheless, it is interesting that the reporters pointed out all Neomedia companies in the "related links".
SS9173
Just noticed a small blunder on 12snap's website. Click "About us", then "shareholders" on the link below. Notice it states: Since March 2006, 12snap has joined the international NASDAQ-listed technology group Neomedia Technologies, Inc.
Wish it were true? They should correct the inaccuracy.
http://www.12snap.com/english/12snap.html
SS9173
Lesnshawn, very interesting observation you uncovered. I hope you are on to something big. Remember, all of Neom's initial Paperclick work was with Nokia phones. See these previous press releases:
http://www.neom.com/press_releases/2005/20050106.jsp
http://www.neom.com/press_releases/2005/20050308.jsp
http://www.neom.com/press_releases/2003/20031222.jsp
:>)
SS9173
beam11, I agree. I included it because it would be important information for us to know if true. I thought that they might be able to indirectly communicate that they have been "approached" but without naming the particular outside party.
SS9173
Everyone: We all are aware that certain individuals on this board are perceived to be paid bashers. Bashers get paid for each reply to their post. You can refute their claims by creating a new post and in that way they won't be compensated. So please don't reply directly to their posts and perhaps they will go away or at least post a lot less often. Thanks in advance for your cooperation.
SS9173
2blksdown, Cool! EOM
Email has been sent to Management reiterating the request for a Letter to Shareholders ASAP / prior to the SHM - highlighting the key questions that must be answered - so that we can make a more informed decision regarding proxy item 3 dealing with the authorized share increase.
Some excerpts are below:
...myself and several other shareholders are torn over this issue. The last thing we want is for Neomedia to go into default. It is disconcerting that we are in this position of possible default when we don't have a good reason provided to us from Management. So it is natural for us to assume the worst...that Neomedia did not plan well when determining the financing for the acquisitions (i.e., it appears that Neomedia overspent its bounds). And, that assumption, then causes us to doubt Management, which is not a good situation.
We don't like that we have an all or nothing vote selection for the additional shares with no middle ground. By that I mean, we would feel much more comfortable authorizing say 2 billion shares that would prevent the default situation and still allow what we would consider a reasonable amount of additional shares for financing additional acquisitions or for other reasonable business purposes. The request for a total authorized shares of 5 billion just seems to be very much out of line for the size of Neomedia's business. Unfortunately, it appears we are being forced into a situation of being "between a rock and a hard place" since there is no middle voting ground on this issue.
...While it may not be enough to change the final vote, some will vote "no" as a protest vote for Neomedia failing to provide a compelling reason to vote "yes".
...Let me also say that we understand how important it is to manage what information is released and how it is released so regardless of the outcome from this email, I will respect your decision to do what's right for Neomedia Technologies and its faithful shareholders.
But, I don't give up easily so I am going to make one more appeal for Neomedia to issue additional information in advance of the proxy vote (and preferably ASAP) in whatever form you feel comfortable with so that shareholders can make a more informed decision on the proxy vote. While we welcome as much information as Neomedia can provide, the critical questions that must be answered are as follows:
1. Why are we in this position of possible default? Did we not adequately anticipate this situation during the planning process for funding of acquisition purchases?
2. If Item 3 of the proxy is approved, how many shares does Neomedia plan to register with the SEC within 30 and 90 days of the approval? What is the anticipated level of outstanding shares anticipated by January 1, 2007?
3. What actions are being taken, and what is the anticipated timing for Neomedia to achieve positive cash flow to minimize further share dilution?
4. What are the revenue and profit projections for each business and in total for the next 3 years?
5. When will Paperclick begin generating significant revenues?
6. How will this dramatic increase in authorized shares impact Neomedia's ability to attain relisting on the NASDAQ?
7. Is Neomedia considering a reverse split or share buy-back?
8. Has Neomedia been approached considering a takeover, 20% equity agreement or buyout?
SS9173
OT Congratulations JCG. Great picture. Thanks for sharing.
SS9173
FWIW TS microcap update commented that the 10Q proforma revenues of $7.6 million were nice to see, but the challenge is to grow mobile marketing into a profitable and sustainable business.
SS9173
beam11, here is possible explanation. I own Neom in 2 accounts. One is with Ameritrade and I had setup to receive proxy statements, etc electronically. I received my Ameritrade proxy via email Saturday at about 3:00 AM. My other account is with Schwab. I had not for whatever reason elected to receive info electronically with Schwab. They mailed the proxy to me, and I received it in yesterday's mail. Perhaps the other poster's proxy from Ameritrade is in the mail.
SS9173
Clawmann, well said. I just want to be sure Neom has shared all relevant information to enable us to make a more informed decision on the proxy without, of course, jeopardizing Neom's business plans with respect to competitors and present / future clients.
SS9173
Howard, Ditto to Cjzak's post. Wooger has not been a disgruntled poster. If anything his past posts border on pumping of the stock. Even now I wouldn't call him disgruntled...just very concerned about dilution.
SS9173
JP, Mudrez and I (perhaps others as well that I am not aware of) have already requested that Management issue a Letter to Shareholders prior to the SHM. Although the response I got back didn't preclude the issuing of such letter, it inferred that discussions and questions would be answered at the SHM. I haven't given up on the idea and will draft another email reiterating the request for the Letter to Shareholders - highlighting the key questions that must be answered - so that we can make an informed decision in our vote selection for the proxy. I will plan to send that follow-up email this evening (after work).
If you would like to provide me with some input on what is absolutely critical information that must be provided to enable you to decide your vote selection, please either respond to this post, PM me, or email me at ss9173@yahoo.com by no later than 8:00 PM CDT. As a suggestion, please refer to the list of questions that I have already provided to management per the link provided here: http://www.investorshub.com/boards/read_msg.asp?message_id=11097342
SS9173
DD Microsoft joins hunt for next big thing (NewsCorp menioned as well)
http://news.ft.com/cms/s/9bfec61c-e36d-11da-a015-0000779e2340.html
By Richard Waters in San Francisco and Aline van Duyn in New York
Published: May 14 2006 19:01 | Last updated: May 14 2006 19:01
Steve Ballmer, chief executive officer of Microsoft, has joined a growing list of technology and media company bosses who have taken to trawling Silicon Valley in person in search of the next hot start-ups.
The readiness of corporate chieftains to scout personally for talent echoes the boom days of the late 1990s, when many thought nothing ofthrowing off their suits and ties, donning khakis and venturing out to hunt for potentially world-changing technologies.
Among others, Peter Chernin, president of News Corp, has taken to meeting entrepreneurs personally and to pursuing local venture capitalists to try to tap into their networks of contacts, according to several people in the Valley.
Setting aside the sort of corporate ego normally associated with powerful media bosses, Mr Chernin thinks nothing of turning up to early breakfast meetings with largely unknown companies in his pursuit of the next big thing, according to one prominent financier.
News Corp’s purchase last year of MySpace, a social networking site, has galvanised other traditional media companies into joining the hunt.
Meanwhile, the shift of advertising to the web has prompted a group of big media and technology companies to start trawling through a common pool of young internet technology and “content” companies.
Speaking at an event last week in Silicon Valley, Mr Ballmer said that he recently devoted a full day to meeting chief executives of small start-ups to find companies that Microsoft could buy or form partnerships with. He added that he plans to spend another two days this year hunting for talent.
Mr Ballmer’s personal involvement reflects a broader change of heart at Microsoft, which has set out to buy more technology through small acquisitions rather than relying exclusively on its massive internal research and development effort. The change has resulted in the software company picking up more than 20 small tech companies during the past year.
Outsiders to Silicon Valley, such as Mr Ballmer and Mr Chernin, are trying to narrow the gap with rivals such as Google and Yahoo, whose presence in the Valley has given them a headstart when it comes to finding ground-breaking start-ups.
Both companies have used small acquisitions to develop new products. Google’s purchase of a start-up called Keyhole, for example, led to the Google Earth service, while Yahoo bought Oddpost to lay the ground for an overhaul of its e-mail service.
“As the competition between Google, Microsoft, Yahoo, AOL, News Corp gets more intense, these companies are looking to the outside for innovation and quick growth,” said Tom McInerney, chief executive of Guba, an online video service. “All of these companies are sitting on piles of cash, and the preferred exit for many tech companies is acquisition instead of IPO.”
Networking events and conferences in Silicon Valley are now swamped with scouts. “From the media companies, News Corp is the one that is everywhere,” said a Valley executive. “At even the smallest gathering, Fox Interactive people are there checking companies out.”
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SS9173