Mobile Not Getting The Cash, Social Media Is…
Posted by justin on Jul 14, 2008 in In The News, Mergers And Acquisitions, Mobile Marketing, Mobile News, Mobile Social, Predictions
An article in Online Media Daily this morning discussed a new study that may surprise some of you out there. It discussed where venture capital funding has gone in the fist quarter of 2008 compared to last year. More specifically, where the money went in regards to Ad-Network, Social Media, and Mobile startups.
According to the latest M&A report lead by Petsky Prunier- social media and user-generated-content companies acquired nearly $1.5 billion in funding during the first quarter, which triples the amount received in the same quarter last year. Similarly, over $760 million was poured into ad network and exchange companies during the same time. When it comes to mobile-based companies and startups however, the numbers aren’t quite as motivating.
Holding companies and VC firms funneled just $80 million into mobile marketing firms during the first half of 2008. While substantial nonetheless, it’s down from $291 million last year at the same time when it was considered the number one technology-based investment sector of the year. As speculated by Scott Wiggins, managing director at Petsky Prunier;
“investors were perhaps hoping that ‘if you build it, they will come.’ But the infrastructure hasn’t facilitated its use.” Even the new 3G iPhone wouldn’t spark increased interest (or investments) from financiers in the short term.”
Overall, I think the study is extremely skewed. To be fair, they did mention that a few large investments dominated the totals for social media and ad networks, such as the $850 million that AOL paid to snap up Bebo, but it still doesn’t justify saying that the “mobile infrastructure hasn’t facilitated the use” when it comes to creative mobile advertising companies and startups.
For some things such as Bluetooth marketing and proximity-based Wi-Fi marketing- yes, it’s still a bit early to determine where the market will go and thus, which technologies and companies will need funding. But, for tried-and-true mobile mediums like SMS and strategic WAP marketing, the infrastructure is more than adequate to foster continued growth. With nearly every consumer worldwide carrying around a mobile device, I’d say that’s about the best infrastructure one could work with.
Eric Litman | Jul 14, 2008 | Reply
I think we’ll see the lines start to blur in the next 24 months as devices like the iPhone and upcoming competitors drive social media into the mobile space. In many ways, phones like the iPhone are inherently more social than a desktop computer - we carry them everywhere, trust them with our complete contact list and history, and overlay significantly more context into their use (location, reason for being somewhere, etc.) than is relevant on the desktop.
The App Store is the biggest change agent in this mix. Google’s going to do something similar with Android and we’ll probably see MS and Nokia move to centralize discovery and distribution as well. With the platform, distribution, payments (something the social platforms haven’t gotten right yet), and opportunities for virality baked in, mobile platform vendors begin to look very competitive with Facebook, MySpace et al.
I wonder if app developers will write for the undoubtedly upcoming mobile versions of OpenSocial/F8 or bypass them altogether and write directly for the native mobile platforms…
justin | Jul 14, 2008 | Reply
Eric-
I think you’re absolutely right. The app store introduced a distribution channel which should motivate the virility of social apps and services to a level that’s vital to its growth.
I would guess app developers will write directly for the mobile platforms they’re familiar with, and can make the most money with…