Mobilizing the Shared Wealth

Caught off guard by the explosive growth of online social networking sites like MySpace and Flickr, many companies are racing to replicate this success in the mobile space. However, building mobile social networks to meet the needs of diverse user communities requires business models and platforms that encourage user acceptance and participation.

The technology exists. However, the current range of business models and strategies is limited by a lack of imagination and vision. Essentially, too many companies focus on monetizing eyeballs when they should be thinking of new ways to capture them.

Granted, advertising will drive its share of revenues. The research firm eMarketer reckons ad spending on online social network sites will reach $865 million this year, and will rise to $1.8 billion by 2010. While no figures exist for mobile social networks, it’s likely to be a significant portion of the $11.35 billion that Informa Telecoms & Media forecasts will be spent worldwide on mobile advertising by 2011.

Against this backdrop, companies that build their models on advertising alone could be short-changing themselves and their users. A much more lucrative and sustainable approach is one that enables users to connect around an eclectic mix of content.

Mark Donovan, SVP and senior analyst at M:Metrics, which specializes in measuring consumer consumption of mobile content and applications, recently pointed out to me that any of the current high fliers are likely to “crash and burn as it becomes obvious that communication, not technology, is the killer app.” In his view, too many companies seek to build mobile communities around merchandising or things like games and music. “It’s not what creates sticky and robust communities.”

Indeed, the core of a strong community is communication. Case in point: the phenomenal success of Twitter, which empowers users to publish their ideas and musings to community members using short messages of 140 characters. The service, which ties together IM, social networking, and wireless, as well as open APIs to encourage the proliferation of widgets and innovation around content delivery, is the talk of the blogosphere.

Mobile IM is another communications platform companies should harness for community-content distribution. This is the approach of eBuddy, a Dutch company that provides users free access to all IM services, if they agree to view advertising on their mobile phones at the beginning of each IM session. The company recently welcomed its five-millionth member.

In Germany, Nico Lumma, who founded, a provider of universal messaging combining mobile, web, and desktop IM, told me his company has similar ambitions. His service, which includes functionality to deliver alerts and bursts of content at prices lower than SMS text, has already attracted interest from content companies eager to connect with members one-on-one.

In a nutshell, Mabber allows content real-time distribution by creating “nodes” and attaching the publisher’s content to them. Users subscribe to the node and receive fresh content each time Mabber updates the node. Similar to RSS feeds, Mabber delivers a message to subscribers’ mobile phones. But there’s a twist: This ticker-like SMS alert content comes at no cost to the publisher because Mabber “reverses the cost structure” through its network of nodes.

The approach is receiving interest from content companies eager to cash in on Mabber’s ability to deliver content alerts via a new scheme that “works like a mobile newsletter, but a lot faster,” according to Lumma. He’s in discussions with several major German newspaper publishers, as well as niche-content owners who want to deliver SMS alerts on specific sports and entertainment events.

Two-way communication and content distribution is also high on the agenda for Soonr, which uses desktop search to let road warriors access all content on their PCs via mobile. The company, which recently made Business2.0’s influential Next Net 25 list, is branching out to make a bid for a consumer audience. In this scenario, users could access content stored on their PCs and a special share function built into the solution would allow them to distribute their content to buddies.

The advance of mobile social networking enhances more than community interaction; it provides content companies and mobile service providers with a new, personal, and extremely effective channel to the customer. This focus—and their deep belief in open standards—gives them the clout and the cost structure to provide content to a loyal mass audience.