UpSnap, Inc. (fka UPSN)

[SD1527]

found this on the Outcast Trader Blog: http://www.outcasttrader.com/blog/

UpSnap Big Partners Equals Big Growth

UpSNAP Inc. (OTCBB: UPSN): Partnership with Sprint/Nextel, Innovative Business Model, Paving Way to Future Growth.

Although research conducted by well-respected research houses such as the Yankee Group indicates that the U.S. is lagging behind many European countries in regards to mobile Internet adoption (19% of U.S. web users also use mobile phones to access web vs. 34% in Germany & 24% in the UK), nobody is disputing America's potential for exponential future growth.

Enter UpSnap

Led by former Chief Operating Officer of Lycos Europe, Tony Philipp (who played a key role in the company's $5 billion IPO), UPSN is an emerging provider of an innovative mobile search & entertainment engine.

In just over two years of operations, UPSN has already made a name for itself by attracting high profile partners such as ABC, Sprint/Nextel, ESPN, and NASCAR. Currently delivering ESPN Radio and NASCAR programming to more than 52 million Sprint/Nextel cell phone subscribers, UPSN cashes in by offering free mobile content to consumers and monetizing its offering by charging advertiser clients on a performance based, pay-per-call pricing structure. Here is a brief example of how it all works:

From the Quarterly Report:

Consumers type in search requests e.g. "Leo" for a horoscope reading. The consumer will be offered a free horoscope, but also receive an advertisement via a text message to speak with an astrologer direct or hear an extended audio horoscope. Similarly, consumers looking for sports scores, for example, will receive a text message advertising UpSNAP premium sports services.

Ripe for the Pickin?

According to Informa Telecoms & Media, worldwide spending on mobile advertising and marketing will reach over $11.35 billion by 2011. Positive data such as this coupled with the fact that traditional Internet search leaders such as Google and Yahoo often fail terribly in the area of local search, lead us to believe that UPSN may be ripe for picking (or acquisition) in the near to mid-term.

UPSN has no trouble attracting mobile users as its current offering has something for just about everyone. And most mobile users are used to paying for media downloads and information searches. The company's growing suite of in-demand search applications and mobile media includes, but is not limited to: yellow pages directory assistance, sport scores, horoscopes, price comparison shopping services, weather, calorie counter, spelling, airline travel information, and a network of more than 1,500 free channels.

If UPSN is not in fact acquired, there is a distinct possibility of the company forging partnerships with other leading cellular carriers (Verizon, Cingular, etc.) in addition to Sprint/Nextel. These agreements would likely increase cash flow exponentially and facilitate healthy growth.

Either way, at today's price of $0.45 with only 21.15 million shares outstanding and current management in place, we feel that UPSN shares are grossly undervalued