YOU ARE AT:Archived Articles$58M acquisition underscores interest in wireless content

$58M acquisition underscores interest in wireless content

ATLANTA-The U.S. wireless content industry continues to crackle with growing pains as Japanese gaming company Square Enix announced it will buy UIEvolution for a stunning $58 million in cash. The deal is the latest in a series of major mergers and acquisitions in the space, evidence that interest is heating up in wireless revenues.

“The industry is sort of starting to mature,” said Tom Trinneer, vice president of products for content billing and settlement company Qpass Inc.

Square Enix’s acquisition tops several months of consolidation within the content industry. Indeed, Square Enix’s news dropped on the same day that application distribution companies Power By Hand and Pinpoint Networks announced their plans to merge, and wireless e-mail company Seven Networks Inc. filed for an initial public offering. Such moves also come amid a range of new content products, games and deals at the CTIA Wireless show in Atlanta.

“It’s an exciting place to be,” said Adam Flick, director of marketing for Sony Pictures Mobile, which sells a variety of games and applications in the U.S. and European markets.

Square Enix said its UIEvolution purchase would allow it to rapidly sell games and content on embedded, mobile and broadband platforms. For UIEvolution, the deal extends its reach and gives it significantly more capital. Square Enix is the company behind the successful “Final Fantasy” franchise, and UIEvolution sells technology that simplifies the distribution of applications over various wireless platforms and networks. UIEvolution counts Disney, ESPN and others as customers. The company will now operate as a wholly owned subsidiary of Square Enix U.S.A. Inc. in Los Angeles, and all of its employees will join Square Enix but will remain in UIEvolution’s Bellevue, Wash., location.

Perhaps the most notable aspect of the deal is the price; the $58 million sticker is far higher than previous deals in the market. For example, Japanese content company Index Corp. purchased U.S. messaging and content provider Mobliss in January for about $15 million, and InfoSpace Inc. in October paid $25 million for ring-tone and content company Moviso. Although the companies play in slightly different areas, such numbers indicate a growing seriousness in the wireless content marketplace.

Separately, Power By Hand announced its merger with Pinpoint Networks, a move the companies said will create a premier global provider of content and applications to mobile devices. The merged company will be led by Power By Hand’s Ryan Wuerch as chairman and chief executive officer and Pinpoint’s Jud Bowman as president and chief operating officer. The combined company counts Verizon Wireless, Rogers Wireless, Qualcomm Inc., MmO2, Lycos, PalmSource, Tapwave and Franklin Covey as customers. Power By Hand has primarily focused on personal digital assistants, while Pinpoint has focused on mobile phones.

In other content announcements:

c Picostation launched a camera-phone blogging service that allows camera-phone users to post their pictures online.

c AT&T Wireless Services Inc. launched its new MapQuest Mobile application, built by Vindigo Studios. Separately, Vindigo announced a new photo-sharing application as well as a gaming review service for BREW handsets.

c Acotel Group and UrbanWorld Wireless launched a new portal at Urbanworldwireless.com to offer urban ring tones, games and wallpaper.

c Qpass announced new deals with Alltel Corp. and Triton PCS for its content billing and management system, and said Cingular Wireless L.L.C. and AT&T Wireless both renewed their licensing agreements with the company.

c Mobliss announced a new wireless game based around AT&T Wireless’ sponsorship of the TV show “American Idol.” The company also announced a PGA Tour golfing application and a premium voting application for Nickelodeon’s Kids’ Choice Awards.

c Ztango said it has a licensing deal with EMICMG, the world’s largest Christian music company. Ztango will offer ring tones of artists including DC Talk, Switchfoot and Orrico. The company also said it will distribute moodmessaging, an Australia-based content development company. Under the deal, Ztango will be able to distribute IamEmo content, which features Emo the Chameleon as part of an MMS message. Users can send a different version of Emo depending on which mood they want to express.

c Sony Pictures Mobile introduced a new Snoop Dogg boxing game as well as a range of content based on the upcoming “Spider-man 2” motion picture.

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