Jason Devitt

The big news from CTIA this week was that News Corp bought 51% (why not 100%?) of Jamba from Verisign.

I took this photo a little over a year ago in a small town called Fethiye in the south of Turkey. It was market day, and stalls were piled high with t-shirts: Mickey Mouse, Britney Spears, Homer Simpson … and Crazy Frog. Crazy Frog, one of a number of lunatic characters created by Jamba to sell ringtones, is not so well known in the US, but seems to be known in every corner of Europe. Jamba has done what no other ‘mobile media’ company has done - created original content that millions of people recognize and seek out. Even if it’s incredibly irritating.

If you want to be a big, rich, standalone media company, you have to own your own content or your own distribution. (Owning both may be a disadvantage. Fear of piracy caused Sony Music to block Sony Electronics from developing an mp3 player until it was too late to catch up with Apple.) Tom cannot build a major media company based solely around licensing Dick’s content and repackaging it for Harry’s channel.*

In mobile, you can’t own distribution, at least not yet. The carriers control what gets on to consumers’ handsets, and even if you market directly to consumers online you still have to defer to the carriers if you want to be able to bill your customers through their phones.

So if you want to build a mobile media company for the long term - as opposed to selling out early -  you have to own create original content. And so far no one has done this as well as Jamba.

Unfortunately, instead of investing more time and effort into developing new characters like Crazy Frog and new products to take advantage of them, Jamba seems to have spent all its time trying to extract as much money as possible from consumers through questionable marketing practices. I am sure that they did nothing illegal. But when regulators introduce new policies that are specifically intended to block your company’s business practices, and nobody comes to your defense, you have probably gone too far.

Jamba/Verisign never made sense to me. Shortly after the deal Verisign execs talked about shutting down Jamba’s direct-to-consumer business and concentrating on powering carrier-branded services. This would have been a better fit with Verisign’s other businesses, but barking mad.

Jamba/News Corp. does make sense. But I hope they do not treat the creative team at Jamba as a job shop, destined only to execute on whatever ideas come out of Fox in the US or UK (a 24-minute of version of "24" without Kiefer Sutherland that costs $10?). Because Jamba knows far more about creating original content for mobile phones than Fox does.

* Caveats:

(1) It’s a great way for Tom to start a media company - think HBO. But what made HBO big and rich was original content. (2) It’s a fine way for Tom to build a company whose revenues or profits are too small for Dick or Harry to care about - think lunchboxes. (3) It’s a wonderful way to build a big, rich company if Tom has a watertight patent on the process for repackaging the content. Gemstar tried this, but failed.

I got some feedback to my last post (and feel free to post comments, this is a blog after all) and have been doing some further research. Some new companies that strike me as ‘interesting’, because they have a novel product or a novel approach to the market or both include:

Obopay - a mobile payments system that people might actually use
Shozu - upload pictures from your cameraphone to your blog or favorite photo-sharing site, not the web site of your mobile operator
Admob - an advertising network for mobile phones that borrows from Google and Overture instead of Doubleclick
Musicgremlin - a music player that isn’t tethered to a PC or to your mobile operator

Obviously these are all consumer-facing companies. Any other suggestions? Right now I am interested in companies with innovative products and/or strategies, not new ringtone download sites, new games publishers, or - least of all - new names for old companies.

I have been away from the wireless Internet market for a little over twelve months; three spent planning our wedding, nine spent travelling the world. I checked in on sites like Moconews every so often, and I took a look at the services available in many of the countries that we visited, but for the most part I kept my distance.

Catching up now I am struck by how little has changed in the last year. Where are all the new startups?

About a year ago Tim O’Reilly wrote an excellent essay, What is Web 2.0, in the course of which he mentions "9.5 million citations" of the term on Google to illustrate how popular it had become. Today I see 57.5 million citations of the phrase "Web 2.0" on Google, and the list of so-called Web 2.0 startups has gone from the unwieldy to the unbelievable to the ridiculous.

On the other hand the list of exhibitors at CTIA has hardly changed at all in the last year.

Web 2.0 may be a bubble. But better to have bubbled and burst than never to have bubbled at all.