Mobile Point View by Paul Ruppert

Velti Invests in CASEE & Chinese Mobile Marketing

Velti Maneuvers into China's Mobile Marketing

Chinese mobile advertising startup CASEE has closed an investment from London-based mobile marketing company Velti plc. The investment was worth up to $6 million, according to the announcement from Velti. CASEE operates an on line mobile advertising marketplace at CASEE.cn  Riding on the success of AdMob neutral off-deck posture, some have characterized CASEE as the AdMob of China. Here's the value proposition: Wireless application protocol (WAP) site operators go to CASEE and sign up to run ads on their sites, while advertisers can bid for ad space through CASEE. So within the vernacular they provide inventory to those interested in mobile marketing campaigns.

This caught my interest for all the obvious reasons--a Chinese company again leading a mobile initiative and gaining western attention, a mobile marketing play, international M&A--but mostly since I know Velti, the company which invested in CASEE.

Velti is run by CEO Alex Moukas who I had the chance to interview at CTIA in April. Velti is the leading mobile marketing company with over US$60 million in revenues--not the start up AdMob; a listing on the London AIM exchange makes it a far more robust public company. How many other mobile marketing companies are public?  None other that I know of. The company's been around for 8 years, starting out in the mobile messaging space and migrated up as the market has evolved. Mobile advertising is one of the most effective ways of driving fuller branding efforts especially within emerging markets such as China, where most access the Internet via a mobile WAP page. Good play for Velti.

Listen to my interview here with Velti CEO Alex Moukas: (x1, 10:30)

Mutual Utility
Velti's investment is a good play for them to enter into the fastest growing Chinese mobile market. CASEE is serving over 500 million ads a month on over 3,000 WAP sites in China. The company currently has 25 employees, but expects to reach 45 by the end of 2008. The company's publishing partners include Sina, Sohu and QQ.  The announcement said that Velti will be able to extend CASEE's mobile advertising technology outside of China and that the two companies will cooperate on product offerings and development. CASEE's founder and CEO is Xin Ye, former CTO of Linktone (NASDAQ: LTON).

GOOD BONES  & SMEs

CASEE was founded in 2006 by a local Chinese team headquartered in Beijing. Advertising clients span MNCs such as Kodak and General Motors to local, small and medium-sized enterprises. These Chinese SMEs are the real value here since that will be the primary source of advertising growth via the mobile channel in China for the future. Using their special sauce, it matches bids for advertising space against inventory offerings through targeting to maximise the price received by over 2000 content publishers from their WAP sites from advertisers. In short, the basic mobile marketing advertising model currently employed across the globe.  The real value here is the access the CASEE founders have in the Chinese market, including it's CEO, Xin Ye, who was the CTO of  Sohu. The founders and board have extensive experience in the local market, having held senior executive positions at US-listed Chinese companies like Sohu, Baidu and Linktone. CASEE serves more than 500 million ads every month to mobile phones in China and receives its revenues from advertisers.

I think both companies will fare well from the linking investment. Clearly it provides both a complimentary and substantial leg up, into mutually interested markets: one to go outside of China, the other the chance to get into China. Looks like a: win-win. Watch both.

Interview with Laura Marriott, Mobile Marketing Association

Here's a an audio (scroll down) primer on the Mobile Marketing Association from its President, Laura Marriott. I had the distinct pleasure--and fun--of meeting and interviewing the President of the Mobile Marketing Association at CTIA which you can listen to here.

Laura's s view of CTIA

...not much emerged at the show from the mobile advertising segment. Although there was increased interest and attendance from the agency and advertising arena reflecting a growing understanding and recognition of the importance of mobile in the marketing mix. Meaning: good things to come in mobile marketing.

What is the MMA?

Good question--a laurel which Laura tossed my way twice in the interview. MMA is a global trade association across the entire mobile marketing ecosystem with regional representation in the US, Europe, Asia and Latin America reflected by 600 companies in the business drawn from across the world. The Mobile Marketing Association is the premier trade association that strives to stimulate the growth of mobile marketing and its associated technologies. It's membership is comprised of drawn from the worlds of advertising agencies, advertisers, hand held device manufacturers, carriers and operators, retailers, software providers and service providers, as well as any company focused on the potential of marketing via mobile devices. 

Listen to Laura describe the differentiating aspects of innovation and creativity development across the world.  (1x, 11:51 min)

Is the MMA important?

Yes. As consumers increasingly use their handsets to browse the Web, it's no wonder that advertisers see mobile screens as valuable turf. In the US, cell phones haven't yet proved to be the same kind of advertising bonanza as the Internet, mostly because of the wireless industry's more controlled nature and the slower adoption of text messaging and mobile Web services. But momentum is gradually building, especially behind text-based marketing campaigns, which are more prevalent in Asia and Europe.

According to research firm eMarketer, worldwide spending on mobile advertising totaled $2.7 billion last year and is expected to hit $4.6 billion in 2008, rising to $19.1 billion by 2012. In contrast, eMarketer projects that Internet advertising in the U.S. alone will reach $25.9 billion this year. Global brands drive much of it since the advertising business is driven by global brands, while the types of marketing varies region to region. More text based in other parts of the world than the US, with use of sponsored Peer to Peer messaging for example in places such as India and Africa.

MMA Boards in each region set the regional focus while following global advertising guidelines and policies. Overall goal of the MMA is to provide ease of use of for global brands to enter the market on a global basis, not a carrier to carrier, country to country basis. Part of this is promoted through 8 events across the globe sharing as a best practice identification and inspiration process source. For those who are interested in pursuing the MMA best practices, there are also lots of white papers and other free downloads at their website.

The Elephant's Legs

MMA dances between the legs of two industry elephants, advertising and mobile. Through the deft leadership of Ms. Marriott she's been able to wrangle these beasts and have them cooperate successfully. Challenges exist such as extending reach and fully using the feature rich phones for advertising, but through education of brands as well as consumers on leveraging the technical sophistication of mobile phones the conversation around mobile advertising has made great strides.  As Laura rightly concludes: "Mobile advertising is going to be hot this year!"

GestureTek: CEO Interview

While at CTIA 2008 in Las Vegas I ran into to William R. Leckonby, CEO of GestureTek which you can listen to here (scroll down).

Bill Leckonby doesn't look like your EZ Bake CEO so often seen at fledgling companies. Bill is in his 60s, a silver haired Yale trained engineer and has over 22 years of CEO or President experience. That's reflective of GestureTek's heritage, a going concern launched in 1986 when they invented and shaped the field of ‘applied computer vision’ for computer-human interaction. The company’s multi-patented video gesture control technology (VGC) lets users control multi-media content, access information, manipulate special effects, even immerse themselves in an interactive 3D virtual world – simply by moving their hands or body.  Think either CNN anchors on election night changing screens with the movement of a hand or Tom Cruise in Minority Report--all their handiwork.

Listen to my interview with GestureTek CEO (1click, 5:38 mins)

GestureTek now has jumped to mobile. Through the camera on your mobile phone, any handset device  device can be enabled to control the device through gestures such as shaking, rolling, or banking.  Minimal software embedded on the camera pre-distribution by the operator, and that's it. Alternatively it can be downloaded via a game program which incorporates the GestureTek software. Very low calorie high impact solution. GestureTek already has their software on applications within NTT DoCoMo and Telefonica in Spain.

Watch GestureTek. They are about to become a long term, overnight success story.

Monetizing Never Ending Friending: Hook Mobile

CTIA Innovation Sighting: Hook Mobile

At CTIA I've been examining the Social Networking Services space, sometimes referred to as Social Network media, and came across Hook Mobile, and their CEO Terry Hsiao.

Hook generates additional revenues for social networks and their application developers by offering an open API that delivers a "low calorie" multimedia experience using MMS. They essentially serve as an enabler by sitting at the center of a pyramid formed by the SNS providers such as Facebook and MySpace, operators such as ATT or Vodafone, the application providers that are riding on the open APIs fostered by the SNS portals and the subscribers.

Hook provides an innovative technical solution heightening "interoperability" between SNS and mobile operators.  Technically they simplify the delivery process of mobile multimedia by universally rendering to the handset, providing the back end billing solution, all enabling the capture of incremental revenue opportunities of the volume of rich media user generated content. The expectation is that much of the content consumption will from big branded content to the application level, or UG (user generated) content. So Hook will be well positioned and prepared for that shift. It already has gotten significant industry attention including being selected by IDC as a Top 10 Mobile Company to Watch in 2008.

Listen to my interview with Hook Mobile CEO Terry Hsiao (13 mins)

The company is founded by veteran entrepreneur Terry Hsiao, who co-founded the immensely successful Inphomatch--which grew to Mobile 365--providing SMS messaging interoperability thus feeding the explosion of text messaging, especially in the US. Mobile 365 was sold for $417 million in September 2006, so Terry is a well tested entrepreneur. He's secured funding for the company through Accel Partners and IDG Ventures, both which closely invest in mobile.

Besides the technical solution provided, unlike many Web 2.0 companies Hook pursues as strategy close to the carriers, so they are well positioned with the American operators, as well as in close trials with Facebook, MySpace and others. It is critical to note that Accel also was early (pre-Microsoft) investor in Facebook. So don't be surprised if Hook is soon to be a solution on Facebook.

SMS Globalization and Growth: Interview with Sybase365 CEO, Marty Beard

10 billion SMS a month and growing

Ever hear of Sybase 365?              

If not, it plays a major role in the mobile messaging value chain for the globe's wireless operators as well as premium messaging providers supporting ring tones, mobile commerce and advertising. It is one of the largest mobile messaging aggregators and interoperability provider whose core value proposition is managing the ever growing complexity of passing SMS and MMS messages around the globe. Sybase purchased Mobile 365 in September of 2006, thus combining the worlds largest messaging enabler (2006 revenues of $110 million) with one of the leading enterprise software providers, Sybase, to create Sybase 365.

Listen to my interview with Sybase 365 CEO Marty Beard (16 mins)

In my interview we cover a wide range of topics including:

• 10 billion SMS per month for operators through the Sybase365 network
• Managing the world of difference between flat ARPUs in developed markets, versus low ARPUs in emerging markets
• Sybase365's foray into mobile banking from their banking software experience
• Balancing the larger international revenues against US domestic text revenues especially with strong growth driven by the Middle East, Africa and Asia
• Sybase 365's efforts to innovate the traditional SMS through the development of more secure SMS, natural language interfaces for messaging as well as user generated content within the realm of text messaging

MWC Podcast: Mobile Transactions & Bharti Telesoft

Mobile Payments, Mobile Transactions, mCommerce, Pay by Mobile, Mobile Money Transfer, mMoney, however you call it is becoming a very crowded space  and it all comes down to the Mobile Financial Services Market .

I've written about  it in the past in "Mobile Payments: Top 10 Issues between Banks & Operators" and "Mobile Payments Tipping Point" and "Text M for Money" and "$1.1 Billion passed in Chinese Mobile Payments" and "Hawala Money"...well you get the picture, this is a space I'm sharpening my perspectives on.

Clash of the Titans--and the under-card-- Rumble of the Developed & Emerging Economies

At the Mobile World Congress there was huge attention to the Mobile Payments market. The GSMA's Pay by Mobile and Mobile Money Transfer briefings were oversubscribed by 5x !  Beyond the obvious titantic clash between MNOs vs. FIs, there is the conflict between technologies such as simple SMS vs. other bearer access points such as USSD, GPRS or even IVR in the mobile transactions space. Of course the really big conflict is going to be services already becoming available in emerging markets affecting the development of mobile transactions in developed markets. Who will lead and shape this space, the unbanked or the overly banked?

Some quick data points picked up in Barcelona:

• Mobile payment usage via a mobile enabled payment mechanism is expected to be used by 1.4 billion people by 2015, or 26% of the user base
• In a survey by EDC, mobile money transfers is considered to be the most strategically important mobile financial service in the future
• By 2012 it is estimated that 12% of subs in developed markets and 9% in developing markets will  use domestic money transfers, which translates into 504 million users globally.
• SMS is viewed as the preferred channel for mobile money exchanges                                                                                                                               My friend, and emerging markets mobile payments specialist, Michele Scanlon suggested I take a look at Bharti Telesoft, so I cornered a conversation with Kresh Goomany, Vice President of Bharti Telesoft's Africa Region.

Bharti Telesoft's Mobiquity platform embraces the mobile phone as a convenient payment  and transaction medium. They have open APIs to both banking and credit card gateways enabling operator services providing a high level of security, making it highly a flexible service delivery platform utilizing a multi-bearer access utilizing SMS, USSD, GPRS or IRV platforms. The Mobiquity platform is a swiss army knife of mobile banking initiatives covering mobile banking, ticketing, money transfer, bill payments, pre-paid airtime top-up, micro-credit transactions, credit card interfaces. Seems to do it all...although from a US centric perspective, I've yet to see any of these presentations which cover the mobile as a "gift cards" mechanism.

Listen to my podcast with Bharti Telesoft's Kresh Goomany (9 mins)

The value proposition of Bharti Telesoft is their genetics and the geography they're focusing on. Bharti Telesoft is a spin off of Airtel with roughly 40 million subscribers in India, providing value added services for the Indian market for some years. Now they are moving into the high growth, low ARPU, unbanked markets in middle Asia and Africa for the mobile transactions business. They open with their "Pre Top" (pre-paid top off) services for operators, and then move up the value chain to FIs or operators offering Roaming Re-charges, Mobile Banking such as balance queries and alerts, money transfers such as domestic or international remittances as well as mobile payments covering utility bills. Clearly they have the right strategy in entering the emerging markets, especially Africa which Kresh covers their market strategy in depth in the podcast. If Bharti Telesoft is defining the development of the mobile financial services markets in developing economies, what's next?

Bharti Telesoft: Big player to follow in the Mobile Payments / Mobile Transactions space.

What do you think of Bharti Telesoft's prospects? Why aren't any western vendors of this size so well positioned as Bharti Telesoft? Will they eventually control the mobile payments play globally or is this likely to be a market structured along regional differences? Tell me what you think.

 

MWC Podcast: GSMA's Innovation Outpost

Last year the GSM Association launched the GSMA Mobile Innovation Marketplace to assist fledgling companies developing innovative mobile services and products in their quest to "crack the carrier barrier" and bring their value to mobile consumers.

The purpose of this arm of the GSMA is to identify, foster and highlight innovative companies within the mobile communications ecosystem. While in Barcelona I had the chance to learn more about what I'm calling their "Innovation Outpost" (which Andy seemed to like) in an interview with Andrew McGuire, GSMA VP for Mobile Innovation, who runs the program.

Listen to my podcast with Andy McGuire of the GSMA (10 mins)

Looking to raise the profile and bring attention to the initiatives of innovative companies, the GSMA has crafted a GSMA "endorsement" process to take mobile technology, application or service ideas from concept to launch through a unique, high profile audience of Operators, Investors and Media. It's a great  idea providing a tool which enables the mobile operator community to be more of a center of influence within the mobile industry ecosystem. Something that has been lacking in the past, although some operators have corporate venture arms such as Orange FT's Innovacom or Swisscom which serve similar purposes.

Besides the Mobile Innovations Awards at the Mobile World Congress events in Macau and Barcelona, they are developing a "match-making marketplace" for innovators, investors, operators, stategic partners, and corporate interests to stimulate and facilitate research, introductions, discussions and, most importantly business development.

Mobile Innovation Market Place conference

Look out for some of the world's leading mobile innovations to be highlighted at the Mobile Innovation Marketplace conference in Atlanta, June 3 & 4, 2008.

MWC Podcast Interview: Mobile Monday's Jari Tammisto

Mobile Monday is a global community of mobile industry visionaries, developers, influentials and other interested parties fostering cooperation and cross-border business development through virtual and live networking events.  The interest to share ideas, best practices, mutual utility and talk trends in the the global mobile industry is the 'glue' that keeps the group together. Consider it Face to Face Social Networking around the mobile campfire one Monday a month all around the world.

Listen to my conversation with MoMo CEO Jari Tammisto here (8 min)

Physically meeting, making face to face connections, this is an off-line, 'open source' grass roots organization that has taken the mobile industry by storm.  Every first Monday of the month, mobilists gather at over 70 local MoMo outposts around the world. MoMo communities convene to encourage innovation in the mobile sector, facilitate networking between individuals drawn from small and large companies, as well as between local and foreign contributors. As a volunteer organization it promotes mobile innovation through the organization's monthly events, organizational awards and international conventions,-- there is a global convention in the works for May in KL, Malaysia.

As Jarri relayed to me off line after our conversation: "We plan to host over 700 Mobile Monday events in 2008 in 70 different cities around the world, and we expect to see more than 90,000 participants. This makes MoMo the world’s leading event organizer in the mobile technology industry.” Besides running the Mobile Monday Global Peer Awards here in Barcelona co-located at the GSMA World Congress, where Luis Jorge Romero, Standards and Innovation Director at Telefónica O2, and Pekka Ala-Pietilä, CEO and Co-Founder of Blyk were keynote speakers, he was also working forwarding a project with the GSMA, so look out for word on that soon.

Check out whether there is a Mobile Monday in your corner of the mobile world. If there isn't one, start your own!

MWC Podcast: Hawala Money & Mobile Remitances

   

For the past five hundred years "mobile" money transfers in the Islamic world were accomplished through the Hawala or Hundi.

The Hawala is an informal money transfer system with a huge network of money brokers which are primarily located in the Middle East, Africa and Asia.  The transaction takes place entirely on the honor system. The unique feature of the system is that no promissory instruments are exchanged between the hawala brokers. No records are produced of an individual's transactions, no records of individual users are kept; only a running tally of the amount owed one broker by the other. Settlements of debts between hawala brokers can take a variety of forms, and need not be direct cash transactions.

If you think mobile remittances are a modern phenomenon, think again. Modern Mobile remittances are but one of several such systems. Another well known example is the Fei Chien, meaning flying money system indigenous to China, also used around the world. These systems are often referred to as 'underground banking', which isn't entirely accurate since they operate in the open with complete legitimacy (sometimes the ends are illegal), and often these services are heavily advertised within immigrant communities.

Jumping to Mobile transactions of the 21st Century

Mi-Pay Ltd. was established in 2003 by executives who stepped out of Logica, the SMSc and messaging innovator. Originally it had a focus on outsourced pre-paid top off services for mobile operators which enables consumers to safely and securely add to their acounts from their handsets. Mi-Pay has initiated a pre-paid recharge solution for mobile operators concentrating on Europe and the Middle East.  It is looking to help modernize the traditional Hawala/flying money system by providing the mobile payments processing solutions to network operators interested in money transfer services such as remittances. Mi-Pay has been sharpening their technology over the last three years and is now bringing the solution to market focusing on the emerging markets of the Islamic crescent of central Asia, the Middle East, Africa and Latin America. They currently provide the payments switch to the new market entrant in Dubai, du.

Learn more about Mi-Pay and listen to my interview with Mi-Pay CTO, Simon Cavell at the Mobile World Congress. (8 min) 

VCs in Mobile: Tim Chang, Norwest Partner, Podcast Interview

Mobile Point View's First Podcast !  Readers--now listeners--here is the first Mobile Point View podcast with my friend Tim Chang of Norwest Partners, a 'silicon valley' venture capital firm with a strong emphasis on the mobile / wireless segment. TIm's a true 'Mobile Influencer' and I couldn't have a more knowledgeable guest for my first podcast.

Here's an overview of our 28 minute conversation.

                                                      Click on the arrow below to listen to my podcast with Tim Chang

For you traditionalists, here are my 'show notes' from the podcast:

• How to become a Venture Capitalist
• How Does Norwest Partners Differentiate itself from all the others in the mobile or wireless venture game?
• Are venture cycles aligned with the mobile industry development period?
• Where does the N. American market rank globally?
• What are the hottest segments of mobile right now, i.e., advertising, LBS, search, etc.?
• Why is mobile a 'mid-tail' development period, and what is it's hype cycle
• What is "mobile social placecasting"?