Wireless Services buying company
Seattle Times technology reporter
Wireless Services plans to announce an acquisition today that places it in line to deliver content to the mobile phone, one of the hottest sectors in the wireless industry.
The Bellevue company said it has acquired Mobile Media North America of Vienna, Va., for an undisclosed amount in cash. With the acquisition, the company will be able to help companies deliver text messages or other content directly to the consumer without having to go through the carrier. The method is called "off portal" because consumers learn about the content through TV, magazines or the Internet, rather than from the storefront provided by the carrier on the phone.
The acquisition follows three other recent big moves in the arena. Earlier this month, St. Louis-based Amdocs purchased Seattle-based Qpass for $275 million; before that, VeriSign snapped up M-Qube for $250 million and mBlox raised $25 million in venture capital.
Opportunities are growing as more consumers purchase content such as ringtones and games over the mobile phone, said Rich Begert, Wireless Services chief executive.
Begert said the industry's off-portal revenue in the U.S. totaled $200 million in 2004, $600 million in 2005 and is estimated to reach $1 billion in 2006.
The growth is being driven, in part, by new high-speed networks that carriers such as Verizon Wireless, Cingular Wireless and Sprint are installing that make downloading or surfing the Web on the phone much easier.
Begert said his company has dealt with some content in its management of text-message campaigns, where people text to enter a contest or vote. Now, with Mobile Media, it can charge for these campaigns because it has premium relationships or connections with about 12 U.S. carriers. An example is when a user pays a $1 text-message fee to enter a drawing. The charge will appear on the user's monthly bill.
"We had the regular connections, but we needed the premium ones," Begert said.
Begert said before the acquisition, Wireless Services tried to create these relationships on its own, but carriers weren't interested.
Besides the new relationships that come with Mobile Media, Wireless Services will gain customers. Mobile Media powers transactions for TV voting, mobile chat, ringtones and wallpaper for customers such as Sony, Red Bull, New York Jets, Hearst Publishing and the Weather Channel.
The acquisition swiftly launches 12-year-old Wireless Services from its historic roots to the cutting edge of the mobile business. The company was spun out of McCaw Cellular Communications and provided back-end technology for pagers. As it evolved it started to manage text-message services for Nextel Communications and other carriers, and handled Internet browsing, anti-spam software, news, weather alerts and other services.Wireless Services is acquiring the North American portion of the Norwegian-based Mobile Media, and expects to merge it into its SinglePoint division, which focuses on delivering messages. It will maintain its office in Virginia, where it has 14 employees.
Wireless Services said it raised an undisclosed amount of capital from its investors to pay for the acquisition. It expects to close that round shortly.
"I think this immediately positions them to be in one of the top places for mobile media," said Adrian Smith, a venture capitalist at Ignition Partners, one of Wireless Services' investors. "The combined entity of the back-end platform and the premium content business is a powerful play. There's a powerful company that's being created here."
Tricia Duryee: 206-464-3283 or firstname.lastname@example.org
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