With a plan to build on its delivery of mobile services and content in the United States, Motricity announced on Monday it has agreed to acquire GoldPocket Wireless.
As U.S. mobile subscribers use their phones to consume greater amounts of media such as text and picture messaging, analysts see content and infrastructure providers becoming increasingly important. Educating users is also a big part of growing a young industry.
Terms of the deal were not disclosed, but company officials said Durham, North Carolina-based Motricity will fully integrate Los Angeles-based GoldPocket, a mobile content and management provider, into its operations.
The deal gives wireless marketplace specialist Motricity access to GoldPocket’s list of big-name media customers, including CBS, NBC, Fox, the Food Network, and TV Guide. GoldPocket has done mobile marketing for major television shows including Big Brother, The Apprentice, and The Biggest Loser.
Big BrotherThe Biggest LoserMotricity’s Fuel platform, used by customers like Cingular, Palm, and Europe’s O2, provides customers with services including digital storefronts, content portals, and communities. A Red Herring 100 winner in 2005, Motricity has raised more than $120 million since its start from investors including Advanced Equities, New Enterprise Associates, and Technology Crossover Ventures (see Motricity Grabs $40M in Funds; The Hottest Private Companies in North America).
According to GoldPocket CEO Steve Leonard, the acquisition comes as greater numbers of consumers are getting content from somewhere other than their carrier. Mr. Leonard believes the demand for services from providers such as his company will only continue to grow.
Small Subset
While the number of U.S. mobile users consuming non-voice content is increasing, such users are still a small percentage of the population. Americans’ use of text messaging, the most popular non-voice application among mobile phone users around the world, still lags behind other countries.
According to research firm M:Metrics, nearly 70 percent of French, 80 percent of German, and more than 84 percent of U.K. mobile users send text messages each month. In the U.S., that figure is little more than 36 percent.
An even smaller percentage—15 percent—of U.S. wireless subscribers consume mobile video and music, said David Chamberlain, a wireless analyst with research firm In-Stat. Among the majority of people he surveys, they view phones as little more than devices for making calls.
“Aggregators are probably the most important part of this market,” said Mr. Chamberlain of the future of mobile content. Wireless carriers want to work with a small number of companies when bringing services to their subscribers, whether it be games, ringtones, or text messaging.
“That middle man position is extremely important,” said Mr. Chamberlain.
While acquisitions such as this one are vital when it comes to growing his business, Motricity CEO Ryan Wuerch said the biggest challenge facing the young market is educating consumers about wireless services. “[It’s] enabling customers to see they can do more,” Mr. Wuerch said.
According to Mr. Chamberlain, the market will continue to increase gradually. Fifteen percent is still a large pool of users, he said, but changes to the price of devices, services, and increased carrier openness will further increase demand.
“There is no single app,” Mr. Chamberlain said. “This is… something that’s going to build gradually.”
Contact the writer: ROlson@RedHerring.com