While the industry steps up marketing campaigns in an effort to push lucrative nonvoice applications, content providers are quietly working to create “mobile communities” centered on wireless content and services.
Motricity Inc., a North Carolina-based content and technology provider, began spending some if its impressive venture-capital-based bankroll last week, acquiring mobile virtual community builder M7 Networks Inc. Terms of the deal were not disclosed.
M7 Networks has gained substantial traction powering content-based communities such as the Game Lobby from Sprint PCS, which allows gamers to recommend titles, post high scores and challenge other players. The company also has inked deals with Cingular Wireless L.L.C., Verizon Wireless and Telecom New Zealand.
Motricity, which acts as content aggregator for operators and offers a content-delivery platform, recently closed a $30 million round of financing on the heels of a $27 million round last October. The company has raised a total of $80 million in investment capital.
M7 Networks was founded in 2000 with funding from Enterprise Partners, Qualcomm Inc. and Sienna Ventures. William Erickson, M7’s co-founder and chief executive officer, will step down once the deal closes, Motricity said; M7 Chief Technology Officer David Buckley will manage the business out of its current office in La Jolla, Calif.
Motricity said it hopes to use M7 technology to create mobile communities built on lucrative content offerings and data services. In addition to wireless games, communities could be built around celebrities, sports or musical genres.
“Across M7’s customer base (with Sprint), they are able to show a two- to three-times-higher download rate of the (M7) games than games that are not M7 enabled,” said Ryan Wuerch, Motricity’s CEO. “By creating and supporting mobile communities, we are helping wireless operators, content providers, media companies, portals and other partners accelerate adoption of new content through demand generated by user-to-user interactions. … And our business models, philosophies and cultures could not be better aligned.”
The result of the 2004 merger between Pinpoint Technologies and Power by Hand, Motricity has gained an impressive foothold since a re-branding effort last year. The company landed a major deal earlier this year to deliver content to Cingular Wireless subscribers, and Wuerch said the company is in the midst of two “shocking” acquisitions in terms of both size and scope.
“We sit at the dead center of (the content) ecosystem, and we want to see the entire ecosystem rise,” Wuerch said. “We are looking to be the strongest brand for powering the entire mobile content world.”
Meanwhile, Italian content aggregator Buongiorno Vitaminic SpA also made a play in the mobile community-building space last week, announcing it will spend as much as $42 million to acquire European wireless company Freever. The company said it will pay $23 million in cash for 6-year-old Freever and will spend as much as $19 million more based on Freever’s performance this year.
Freever, which offers subscription-based theme programming including contests and event information, will remain an independent business unit.
“The mobile VAS (value-added services) market continues to offer major opportunities for development and requires increasing size and global scale,” said Jerome Traisnel, who will remain as Freever’s managing director. “We are excited to have the chance to become part of a group that is showing real strength and setting the international standards with a distinctive business model that offers the best opportunity for rapid, sustainable and durable growth.”
Buongiorno is an Italian digital marketing company and content provider doing business in Europe and the Americas. It offers ringtones and other content to North American users from its DirtyHippo.com storefront.
