For more than a few mobile startups, MySpace has become MyObsession.
The most popular of a throng of new Web sites featuring user-generated content, MySpace.com has an estimated 55 million users and reportedly accounts for 12 percent of online advertising. Rupert Murdoch’s News Corp. bought the company last summer for a jaw-dropping $580 million in an effort to tap into the highly prized youth and adult demographic.
Other sites have attracted eyeballs, as well, allowing users to do everything from creating profiles (Facebook, Friendster) to posting video clips (YouTube, Break) to sharing digital music broadcasts (Mercora). Investors and software developers are hoping to expand the phenomenon from the PC to the mobile phone.
Traffix Inc. is the latest to wade into wireless. The publicly traded company has gained traction with nearly a dozen community-based, topical Web sites, and earlier this month launched its first offering for mobile-phone users. The site, Q121.com, offers both mobile content as well as social networking tools that allow users to send anonymous text messages and create mobile blogs.
Like other companies that have established a foothold on the Internet, Traffix looks at wireless as a way to extend its reach and complement its other online offerings.
“We look at this as almost a migration between mobile and online,” said Andrew Stollman, president of Traffix. “For us, this is more of an additional platform” than a stand-alone business.
The site, which was beta-tested for two months before being unveiled two weeks ago, has already attracted 50,000 users, according to Stollman. Past advertisers include Columbia House, BMG and Nickelodeon, and members can join wireless communities and access free ringtones, images and games in addition to user-generated content.
Other PC-based sites have recently ventured into wireless as well. Break.com recently inked a deal for placement on mobile virtual network operator Amp’d Mobile Inc.’s deck, delivering user-generated videos to subscribers through the phone. Facebook, which targets college students, allows subscribers from three of the four Tier 1 operators to update their profiles via text message. And Helio L.L.C. users can access MySpace Mobile, a free service that offers access to the popular site.
Of course, user-generated content is as much about production as it is consumption. Up-and-coming bands use the site to contact music fans directly, bypassing record labels and distributing content themselves, and corporations including Helio have created MySpace profiles in a kind of synthetic viral marketing campaign.
SMS.ac, a San Diego-based text messaging firm, launched its effort to tap the user-generated content space earlier this year, touting a self-publishing language dubbed xPML aimed at musicians and other artists. “This spells the beginning of the end of the record companies,” Chief Executive Officer Michael Pousti boasted at the time.
Traffix’ new site and its PC brethren will compete against a host of offerings from pure-play wireless startups, some of which have been online for more than a year. Intercasting Corp., a San Diego-based developer, has quietly gained ground with Rabble.com, a mobile blogging service available through Cingular Wireless L.L.C., Verizon Wireless and MetroPCS Communications Inc.. But the company has seen a flood of newcomers join the playground since its launch last July.
“We invested in Intercasting about a year ago; the field was admittedly far more open then,” said Stephen Tomlin of Avalon Ventures, an Intercasting backer. “The pack has sort of filled out now. VCs have a dangerous tendency to over fund particular categories.”
There is some justification for the influx of cash. Nearly 7 percent of U.S. wireless consumers use their phones to upload videos or photos to the Web, according to figures released last week from M:Metrics-outpacing the number of users who purchased a ringtone or downloaded a mobile game.
Such activity should increase as more capable handsets are deployed and established sites continue to expand into wireless, the firm said. “This is not just older groups catching up, but also the youth moving on to become creators rather than just the consumers,” said Paul Goode, an M:Metrics senior analyst. “Social networking is the most youth-driven category of mobile content.”
Even a drastic increase in uptake won’t support all the players coming to market, however. The field may get even more crowded as instant-messaging providers such as AOL Inc. and MSN move further into wireless, and established PC-based sites will have a decided advantage in sheer subscriber numbers as they work to leverage the platform.
Meanwhile, pure-play providers must build membership bases from scratch.
“We’ve already seen a number of startups,” Traffix’ Stollman said. “I don’t know how they’re all going to make money. I don’t know how they’re going to support themselves.”
But the handful of wireless developers who have established themselves may have strengths of their own, Tomlin said. Intercasting and others have built the infrastructures and carrier relationships crucial to survive in wireless, and Rabble has gained subscribers despite charging about $3 a month-even as many popular user-generated services are free.
In fact, the new platform may be an advantage in and of itself when competing against PC-minded giants, Tomlin opined.
“I think when there is a paradigm shift-just a reshuffling of the technology cards in terms of capabilities-you have the potential for some serious disruption; for the old guys not to make the transition well,” he said. “We certainly think that is the case here.”
