Archive for September, 2008

Nokia acquiring Oz

Tuesday, September 30th, 2008

Today Nokia announced that it is acquiring Oz, the mobile IM and email provider. First things first: Congratulations to Skuli and team. Secondly, one must pose the question: Is there no stopping Nokia? In the midst of a worldwide financial crisis that has all sources of cash completely ferklempt, and even as its own stock price takes a beating, Nokia brazenly forges ahead with non-trivial acquisitions, confident in its market position, its strategy and its fundamentals. And why shouldn’t they? NOK, like many telecom sector companies, (and one might even say all companies ex-financial sector) has strong fundamentals, and while the contagion of fear may certainly affect them as investors (who are all on some level speculators) run for the door, this is exactly the time when acting out of fear paralyzes companies. And so Nokia will probably pull farther out in front as its competitors succomb to fear at exactly the wrong moment.

But I digress - I am not a financial pundit, and what I really wanted to talk about is the Software and Services strategy in the mobile space and what the acquisition of Oz means for the incumbents competitive to Nokia.

Nokia bought Oz for an obvious reason: They have been sending out 200mm feature phones a year with no 3rd-party messaging capability. Baking consumer email and IM into those devices solves that problem, and serves well their Software and Services strategy. As devices become less “discreet hardware” and more “service-delivery platforms,” the importance of filling the void for consumers increases. Companies like Oz fill that void for IM and email very well.

In fact, there are a lot of platform companies that fill similar voids. One need only look at Nokia’s history of acquisitions to identify those voids:
Navteq – location services
Enpocket – ad serving
Plazes – social mapping
Loudeye – music
Twango – social networking
Avvenu – desktop sync

Now all they need is Search, Games, News, Weather, Sports, Photo Upload, VoIP and Contact Sync and they effectively become a mobile media company likely to rival, in the long run, AOL, Yahoo, MSN, etc.

I frankly expect to see no slowdown at Nokia and wouldn’t be surprised if they kept ticking off “need to have” verticals with more acquisitions. Of course, near and dear to my heart is the social networking vertical. Just as Nokia can now provide 3rd-party IM and email, so will they eventually provide 3rd-party social networking. (If consumer trends continue in this direction.) Twango became Nokia Share, which is not like “an Oz for social networking.”

But that means that everybody else has to continue, as well. Really interesting to me is what happens when Nokia makes an acquisition. There is a not-small universe of companies around Nokia that, to remain competitive, has to move in a certain direction whenever Nokia moves. Any competitor to their handset or infrastructure division has to now be looking at the Oz acquisition and planning a move into 3rd-party messaging, no? And which private companies are “Oz-like”? Certainly there are a slew of platform companies that provide vary types of similar services. It will be interesting to see what happens next.

Mostly, I am interested to see which companies rise to challenge Nokia during this generally fearful moment in history. I personally think Nokia is making bold moves and showing resolve to win at a time when other CEOs might be forced to pursue a more conservative approach.

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In Europe now, thinking about business models

Wednesday, September 24th, 2008

My most recent RCR Wireless column is about mobile social networking business models. Here is a link to it on the RCR site, and since I think that link will eventually expire, the text is below. The point is that every participant in the mobile social networking ecosystem has a different strategy, and so there is no single business model that works for everyone.

I happen to be in London at the moment, then I’m off to Germany and some other fine countries, visiting customers, etc. Coming here is a good way to maintain perspective on business models, because the mobile consumer experience is so different compared to in the U.S. Flexibility is key when dealing with a worldwide customer base. One thing that remains constant across all of our customers around the world is the increasing importance of integrating 3rd-party communication service providers into the mobile communication experience.

Anyway, here is the text of the RCR article…

On social networking business models

I have a good vantage point of the mobile social networking opportunity: The largest social networking providers, wireless carriers, content providers and OEMs are using my company’s Anthem platform as the backbone of their mobile social networking strategies and roadmaps. I more or less know what everyone is planning in this space up to about 18 months out. Everyone is doing something similar, yet everyone is approaching it very differently, (if that makes sense) and the end result is going to be a very rich user experience.

Mobile social networking is one of the highest priorities among carriers, OEMs, social networking providers, and content providers because it essentially redefines the personal communication experience. It may be a bit difficult to envision, but as simply as you click on a friend in your address book or shoot off an SMS, the word “social” is being wrapped around the consumer experience in exciting ways. You will soon find that there is no “WAP site” or “application” per se in the mix. Rather, you will find access to your favorite social sites baked into the very UI of your device.

It makes perfect sense, of course, that wireless carriers would embrace what is essentially an evolution of their core business model, which is providing communication services. (And social networking is simply a communication service, on the same continuum as voice, SMS, email, IM and so forth.) It also makes sense that social networking providers would embrace the mobile consumer: Social networking was established and flourishes on the Web, which is limited to a 500-million-strong consumer base (roughly the number of PCs that are connected to the Internet). Compare this to the roughly 3 BILLION mobile consumers worldwide, and it’s no wonder the largest social networking providers in the world are rushing to the mobile space to grow their numbers.

But here arises the question of business model, which is the intended subject of this article. There is a natural tension between wireless carriers and social networking providers because the former has built a business around getting paid for providing communication services while the latter has built a business around providing communication services for free while advertisers subsidize the experience. That they are both basically in the same business of providing communication services, and are therefore on some level competitive, would only seem to add to the issue as the opportunity grows. However, the very size of the opportunity is the thing that is encouraging cooperation among all parties, and I am glad to see it. All that is left is the question of business model.

And here is where I am truly amazed at how differently everyone is viewing the future. The basic consumer-facing models being discussed are:

- Subscription.

- Day pass. (Typically for pre-paid carriers).

- Bundled with data package or tier.

- Paid via defined rate plan.

- Free and ad-supported.

- “Free” and indirectly monetized. (Such as through SMS and MMS).

- “Free” as part of an all-you-can-eat data plan.

There is no one consumer offering that will work across the board, because carriers worldwide operate under very different economic realities.

The presentation paradigms are:

- WAP.

- Downloadable application.

- Preloaded application.

- On-device portal (to the category).

- Integrated into the native UI.

On presentation, we are seeing a resurgence of focus on applications and on-device portal (ODP) supplanting the recent reliance on WAP. Ultimately, I expect for the paradigm to shift entirely to a device-integrated view of communication services, including social networking.

The dimensions that drive adoption are, in order of impact:

- Discoverability overall.

- Search marketing and slotting.

- Placement.

- Brand.

- Promotion (across the board, but cross-promotion in the store is most effective).

- Friction (lowering of).

- Functionality (more and more useful).

- Virality.

- Price.

In various combinations, the three lists above equal success or failure of the category. I would like to point out that contrary to popular belief, something that is free and ad-supported on the Web does not necessarily have to be free and ad-supported in the mobile space (IM is a good example of this). Remember that we are dealing with different consumers, (and 2.5 billion of them) many of whom have never seen MySpace on a PC because they don’t own a PC. For all they know, everything on the Internet costs a dollar. Be careful about your business model, because we have some carriers charging for the category but with superior discoverability that are outperforming others which provide it for free though it is impossible to find.

In the future, there will be one best presentation of social functionality, and it will pervade and extend the usefulness of the device. In many cases today, the carriers are essentially competing with themselves by offering two versions of a social networking site — a “free” WAP version and a paid-application version. For the moment, this is fine since the functionality differs significantly and appeals differently to various consumer segments. As active user interfaces evolve, we expect to see WAP fade in popularity because A) the interface will be transparent, and B) will offer far greater functionality than WAP ever will be able to. I can further predict that this pervasive functionality will drive the business model as well. All but the most cost-constrained MVNO will make social networking “feel” as “free” as SMS or even voice feels today — sure you know it is costing you something, but the thought of that cost does not stop you from sending the next SMS or making a call.

Lastly, let me say that while the advertising model in the mobile space certainly faces its challenges today, the basic dynamics of monetizing an audience have held true for centuries: Where there is a gathering crowd, there is a marketplace to sell them something. Carriers, OEMs, content providers and social networking providers are keenly aware of this fact, and with some hard work and cooperation, this space is going to flourish in a way that will satisfy all interested parties.

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Excitement and confusion this week in Mobile Social Networking

Friday, September 12th, 2008

Here we go. This week the “mobile social networking gateway/platform/aggregator/whatever” category officially exploded in perceived size/value/opportunity.

This was a great week for Intercasting Corp as Verizon Wireless and AT&T announced at CTIA that they launched their social networking categories around our ANTHEM platform! Awesome, very happy. We are proud to be serving the largest carriers in North America.

A slew of other companies also announced that they have a mobile social networking gateway/platform/aggregator/whatever, including Newbay, Verisign, Visto and Yahoo!. Wow - we’re in good company.

On one hand, the arrival of would-be competition from such respectable companies to the mobile social networking space clearly validates our model and approach, and so I welcome it. On the other hand, the language of press releases and spin creates some confusion at a time when clarity would be preferred by large companies needing to make decisions. Naturally, everyone is claiming that their solution is the best. And, of course, every solution is different from every other one. I am friends with the CEOs of some of those companies, so I wish them all luck and good fortune, but at the same time I realize that while we are the top company in this space, they will sometimes be taking shots at us to paint themselves in a more positive light. We will never do that, preferring instead for our technology and approach to stand on their own.

While I would never presume to speak intelligently about another company’s specific approach, I do know enough about this space to provide some thoughtful insight. Yes, I have an enlightened self interest in doing so, but I promise you my primary objective is to cut through the bullshit so you can, too.

“Push” vs. “Integrated”
Most web-based social networking providers have APIs that enable third parties to create applications. This strategy positions companies like MySpace and Facebook as “platforms” on which other companies can create useful tools and applets. It is frankly a brilliant strategy, and creates a lot of value for the ecosystem around them. To be clear, the goal is to build value around them, not outside of them, and the bulk of the publicly available APIs are designed in such a way that the user is in fact sent back to the website at some point. As a simple example, you may be able to receive alerts such as friend requests or messages via an API that a mobile “aggregator” may be able to display in an application, but to respond or reply, the user has to go to the website because there is no “reply” API available. A truly “integrated” solution like the ANTHEM platform differs in that the social networking providers have enabled full and complete two-way integration to the core functionality of the social networking service that enables a mobile representation of the experience.

Commercial license
Take a look at the terms of use of publicly available APIs. As an example, if a platform company does not have an explicit agreement with Facebook to represent Facebook functionality in the mobile space, they are in violation of the Facebook platform policy, and the service, while potentially technologically viable, may not be commercially viable. Simply put, if you are a carrier or OEM looking for a commercial-grade solution for which you will not be sued later, demand to see a signed copy of all explicit agreements that an “aggregator” has with the social networking providers, and be sure that your lawyers deem that they survive the test of commercial viability as the service is represented.

Here is an excerpt from the Facebook Terms of Service section B, Presentation and Distribution:
5) You may not sell, resell, lease, redistribute, license, sublicense or transfer all or any portion of the Facebook Properties, or use or store any Facebook Properties for any purpose other than as specifically authorized herein.
6) Your Facebook Platform Applications may not be designed or implemented a way that might mislead a user into believing he or she is interacting directly with the Facebook Site when interacting with any of your Facebook Platform Applications, or that any of your Facebook Platform Applications were created by or are endorsed by Facebook, as determined by Facebook in its sole discretion.

Now, one might ask why a company would make APIs available if they did not expect some creativity to be employed in their use and deployment, if, after all, the value ultimately accretes to the social networking provider anyway. This is a thin-ice argument that does not pass our test of a legally viable commercial product. Simply put, we would never place our valuable partners in the position of even having to have the conversation about whether our platform and the way that it enables the social networking ecosystem is completely legal and respectful of the rights of everyone involved, both in spirit and to the letter of the law.

Our adherence to this basic principle is the reason why Facebook is currently conspicuously missing from our list of ANTHEM partners. While we could use their available APIs to build a somewhat lighter “read only” version of Facebook, it would not faithfully recreate their experience to a mobile-only user, would not be in compliance with their stated terms of service and would not pass the legal hurdles at the carriers and OEMs. We only work with social networking providers with which we have a direct and future-proof development agreement.

Ultimately it seems logical that Facebook would want to reach every consumer and not just every web consumer, so they will probably at some point provide the level of integration required to provide their carrier partners with a mobile-centric experience, and when they do, I suspect they will make it available to everyone as democratically as they have always conducted themselves. In the meantime, any “aggregator” claiming to have the ability to provide a mobile version of Facebook should be examined with scrutiny.

Here is what I can say about Intercasting Corp and our ANTHEM platform: We have been subject to the scrutiny of the largest carriers in the world and have passed with flying colors.

Do you have any idea how rigorous the review and vetting process is at our great partner Verizon Wireless? Do you know how long it takes to get from first sales pitch to final deployment? Can you imagine how strenuous the legal process is at Verizon Wireless, especially when it comes to this category? Trust me: It. Is. Thorough.

That some of the largest carriers in the world have selected the ANTHEM platform is at least an indication of the depth of our approach and our ability to satisfy the needs of the industry in this category. While I do not expect to win every deal in the world, I do know that the number of deals we have makes us the leader in this space, and that status is a testament to the quality of our technology and the viability of our platform. The confusion created this week is unfortunate, but with some rigor you can cut through the nonsense. Oh, and contact me for more information – I would be happy to help. ;-)

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Verizon, AT&T and MySpace on ANTHEM

Tuesday, September 9th, 2008

Today Verizon Wireless and AT&T both announced they are using Intercasting Corp’s ANTHEM platform to provide their subscribers a single interface to the social networking category. Also, I am happy to note that MySpace is now also part of our social networking partner lineup, as is Photobucket.

Verizon Wireless has chosen to brand their one-stop social networking category “SocialLife” while AT&T is calling it “My Communities.” There are some differences between the two deployments, and they chose to offer slightly different social networking sites, (AT&T is offering more, while VZW is more focused) but overall the concept is to leverage the ANTHEM platform to provide a single interface to the social networking category.

Why ANTHEM and why this approach? There are a few reasons carriers, OEMs and social networking sites around the world find our platform valuable. Here are a few:

1) Critical mass means lower effort – For carriers and OEMs, we have already secured technical relationships with a large and growing list of social networking sites, which simplifies business development and deployment for them. For social networking sites, we have secured a broad distribution footprint, which means a single integration to our platform establishes a presence instantly to over 200 million mobile users.

2) Roadmap – Putting the whole social networking category in one place enables social communication to evolve into its role as part of the native mobile experience. The first step for most deployments is a downloadable application, then as the category becomes more important, our platform enables the entire category via a single preload. Beyond preloading, the social networking category is important because the core functionality is being treated less as an “application” and more like “integrated functionality” and that is where the OEMs come in to embed social features from third parties through our platform to high-value areas on the device like the PIM, Camera, and Active UI. (If you want to see some examples of this while at CTIA, send me an email.)

3) Flexibility – The whole ecosystem in the mobile social networking vertical wants to be as engaged with the consumer as possible. Finding an application and downloading it is a high-friction experience, and while ANTHEM can represent social networking in this way to satisfy this mode of interaction, the true value of the platform is that it enables third party functionality decoupled from its presentation layer and broken down into component parts so that it can become part of the differentiated consumer offering by different carriers, OEMs and infrastructure providers, all to the benefit of the social networking providers and consumers because this drives deeper engagement.

4) Functionality – The vast majority of access to web-based social networking sites is via WAP, so why offer an application at all? There are several reasons, and not least is functionality. Here are a few things you can do on, say, MySpace, through ANTHEM that you cannot do via WAP: You can register as a new user; you can take a picture from inside the application and upload it to your gallery or use it in a post; you can share content you find on MySpace with your friends who may not be on MySpace through our integration to the address book on your phone. It is simply a richer experience, and it is more mobile-centric. This is not to say that WAP is not currently an important part of MySpace’s offering – it is. So is a robust messaging and alerts offering. In the near-term, ANTHEM provides one more important consumer interface for a certain type of power user, and in the long run ANTHEM is the invisible DNA that enables device integration and a transparent experience that is easier to access than WAP and is simpler to use.

As we add more carriers, OEMs and social networking providers to the mobile social networking ecosystem, the consumer experience will evolve, as will the flexibility to offer more services and functionality across more and different business models. We are excited about the future of mobile social networking and our place in it as an enabler of the category.

I thank our friends at Verizon, AT&T, MySpace and Photobucket for joining the growing ecosystem that is using our platform to build a more robust mobile social networking user experience. Over the next few months I will share details of more carriers, OEMs and partners, and will eventually give a glimpse of the revolutionary technology we will be releasing soon.

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Intercasting at CTIA 2008

Thursday, September 4th, 2008

Ah, the fall CTIA show. Smaller than the spring conference, it is more intimate and focused.

Spring is in Vegas. The parties are big. The dinners are lavish. The expense reports are ridiculous.
Fall is in San Francisco. The parties are really get-togethers. You drink wine, not gin. There are no strippers.

This is a time for conversations, not sales pitches. Spend the week maintaining relationships, not crassly trying to build new ones. Remember there is a CTIA Party List to dial you in.

Enjoy.

We will be there. I am speaking at Mobile Web Strategies.
9:45 – 10:30 SuperSession Discussion: Mobile Social Networks

Come heckle me.

Also, there will be some good news (for us) next week, so I am excited about that. More on that later.

We won’t have a booth, (I don’t think I have ever gone to the actual show floor, come to think of it) but if you are interested in meeting, send me an email and we’ll get together.

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