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blackberry app world could have been a contender sm3What are the odds that Blackberry App World will emerge as strong player in the App Space? 

It is us, or did the big news out of last month’s CTIA (i.e. RIM’s announcement of Blackberry App World) didn’t really get much attention?  Instead, what we heard most was a great collective gnashing of teeth over the absence of new Android handsets, and of course everyone and their mother getting all lathered up over something iPhone-related.

Could this be the moment when Blackberry became irrelevant?  The moment when we’ll all look back and say, “Yep kids… before we had the iThisOrThat, we all had these funny little Blackberry dodads… they had these pesky scroll wheels and track balls and we pecked email out with our thumbs.” Perhaps so.  Here at mobilestance, however, we think the ‘Berry’s not going anywhere, anytime soon… and that their “App World” is an important development that deserves its proper due.

That said, with competition in the Smartphone space getting so fierce, so fast, we thought it would be a good idea to take a step back and attempt to forecast whether App World has real legs or not.   Our system uses a “thumb scale” of one to five thumbs (OK, the thumb metaphor breaks down a bit when we get to five thumbs, but who cares? We can have five thumbs, can’t we?).

The Experience (weak thumbs-up: 3/5).  App World’s failings, when compared to the Apple App Store, have been well covered elsewhere, but the long and the short of it is that while App World isn’t half as slick, robust or easy to use as Apple’s App Store, it does the job well enough to satisfy your average user.  Entertainment-starved BBery users are voting with their thumbs, downloading apps such as the ClearChannel iheartradio app over 257,756 times in two short weeks time – a positive sign to be sure.

Developers, developers, developers (strong thumbs-down: 1/5).  Developing for Blackberry has always been a less than ideal experience.  In addition to universally-panned, couldn’t be more cumbersome developer tools, RIM has a certification process akin to the old BREW system or Carrier model.  Sure… once your in, you’re in – and access to those sweet device API’s must be fantastic (seamless add-to-cal, push notification, etc), but having to jump thru hoops just to be an “approved developer” is a little much…  in light of *ahem* – much more open platforms… and especially since nowadays Android and Apple can match most of what RIM is offering in terms of API integration (except that pesky calendar integration – Cupertino, are you listening!?!).

Pricing (weak thumbs-down: 2/5). I’m sorry, but anyone who’s taken Economics 101 can tell you that artificial price floors like what RIM is doing with the $2.99 floor for paid downloads only serve to deflate consumption, clumsily pushing the market off the organic price/demand curve.  Yes, yes… we are aware of the argument that $0.99 iPhone app downloads have eroded the value of mobile applications to the point where the paid model is no longer viable.  To that we would say, “Come on!  How much is iFart really worth (to users)?  Let the developers charge what they want, already. Consumers will pay more for the good stuff.”

User Base (thumbs-up: 4/5).  In terms of scale, Blackberry’s clearly got the edge over Apple and Android here (I’m ignoring the Nokia app store for now, because… well, mobilestance is published in the US, and let’s face it… ignoring Nokia is what Americans do).  Even though BBery users need to be running version 4.2 or higher to use App World, that’s still a lot of Bolds, Storms (both come preloaded with the new OS), as well as those with relatively newer models that can handle the firmware upgrade.

On-device Competition (Strong Thumbs-up: 5/5).  The dark horse in all of this, and the primary reason why I believe App World will be relatively successful right out of the gate, is the simple fact that the Blackberry default browser is just terrible… and that our assumption is that Blackberry users will jump at the chance to have ANY positive on-device experience with the brands they love – and this means downloading applications from App World.  Comparatively speaking, Blackberry apps are simply MUCH better than the comparable browsing experience, far more so than on any other smartphone platform (and I’m including Microsoft here).  Quite simply, for many Blackberry users browsing is so poor an experience that (relatively) few bother with it at all.

Final score: (Weak thumbs-up / 3 out of 5 “thumbs”) . So there you have it.  When you average it all together our quick and dirty handicap on whether App World will be successful is a somewhat lukewarm “yes.”  Not exactly a contender, but a long term player that deserves our attention, and respect.

Now… anyone want to take a stab at the over/under for total downloads in the first six months?  Medialets?  Pinch?  comScore?  I’m looking at you, Eric.

Android Wobbly Shaky Ground MobilestanceWhat’s Behind What Some View as Android’s Growing List of Self-Inflected Problems. Conspiracy? Complacency? Or Raw Genius At Work?

At first glance, it might appear that things are going pretty well for Android.  The free-to-license mobile OS has quickly become popular among many cash strapped mobile OEMs (original equipment manufacturers). Heavyweights such as Samsung, Sony Ericsson, LG and Motorola, along with handset newcomers Garmin and even Dell (hold for laughter) have all announced plans to develop handsets for the Google-run platform.

Supposedly, T-Mobile even managed to sell roughly one million Android-powered HTC G1’s last quarter… a respectable, yet not exactly iPhone-worthy performance (but to be fair, Apple and AT&T set an impossibly high standard with iPhone 3G, accomplishing in three days what Android did in three months – who knew AT&T would deliver on their promise of “Raising the Bar” so literally!).

Yet a quick peek below the surface reveals a conflicting scenario emerging for everyone’s favorite “Little (open-source) engine that could.”  Depending on your point of view, the OS is either plagued with systemic flaws, or designed with a profound sense of Machiavellian perfection. The exceedingly real threat of viruses, worms and other forms of malware, combined with a system seemingly “design to fragment” (read: seriously frustrate application developers) leaves one wondering if (as the conventional wisdom would have you believe) that Android’s model scales so well, and its backers so powerful and smart, that it can’t fail to become a serious contender over the long term…  or what we’re really looking at is nothing more than “Yet Another (seriously flawed) Google Beta Product.”

The issue of Android’s well-publicized “open door” security policy reared its pathogenic head again last week in the form of an all-out malware scare, and although the jury’s still out on whether or not the now infamous “MemoryUp” application did (as was accused) take over a user’s mobile, spam out its contacts and wipe its memory, or is just (as was suspected by cooler heads), merely a poorly designed, near universally-panned app… the frightening fact remains that the only thing standing between us and just such a dark reality is the relatively low profile group known as the Android Security Team.

Unfortunately for Android users, this team (of which whose public presence appears to consist entirely of one message board post dated August 18, 2008) seems to operate in a decidedly passive capacity: rather than vigilantly seeking and tracking down security flaws wherever they might appear in the system, the model works more like a ticket-based complaint counter, addressing user-submitted security threats when (and only when) the Goog Squad is alerted to their presence by the public.  It would be as if the local police force was replaced by an automated 911 system (and we all know how efficient that system can be). While it wouldn’t be 100% accurate to say that “no one’s minding the Android App store” (er, market) – there’s far more truth in that statement than many are willing to admit.

Moving on, the other significant issue facing the Android system – that of the looming threat of OS fragmentation – has (unsurprisingly) garnered scant attention in the trade press.  I say “unsurprisingly” as so far the threat of OS fragmentation is fairly complex and has yet to be an issue as, with only one Android handset on the marketplace (so far) – the HTC G1 – there just isn’t that much of a marketplace to fragment.  That said, this issue seems to have some real legs, not to mention real intrigue, and is, in our opinion, very likely to seriously impede Android application development over the long term.

Before we get into all the wide-eyed intrigue and half-baked conspiracy theories, a little background information on the subject of OS fragmentation is in order.  At its core, the issue revolves around the fact that Android, as an open source software platform, freely publishes its source code to the world under the general assumption that under “the eyes of the world’s” constant viewing, tinkering, and deploying – the software will ultimately become more robust, stable and efficient than any system created and maintained by a finite number of (paid) employees.  As is the case with a great many subjects, the devil is in the details.  It seems that when Google formally launched the Android project back in late 2007, it chose the to advocate a licensing model (Apache) whereby third parties could maintain private ownership over any modifications made to Android’s publicly-available source code, and would not be compelled (as in other open source licensing models) to turn over said software modifications or enhancements back “to the public domain” – so that (among other reasons) these modifications could (potentially) be incorporated into future versions of the software… thereby making the whole system more unified, and less “fragmented.”

So here’s where things can really get messy.  As said, mobile handset manufactures designing smartphones are turning to Android in large numbers, driven mainly by its price point (free), as well as its many innovative design features.  That said, not all of these “Android” devices will be running the same version of Android, as handset manufactures will be under extreme pressure to modify Android in order to maximize the performance of the particular hardware components making up each of their individual handset models.  This means that Android developers will soon have to create multiple versions of each Android application they develop in order to insure that their apps will run correctly on each “version” of Android in the marketplace (i.e. all the different handsets running “Android”).  This time-consuming and labor-intensive process, known to overworked software developers the world over as “porting,” significantly drives up the cost of software development.  Ultimately, Android developers will need to limit the number of Android handsets they can support as simply a matter of cost/benefit.  This well-known problem has been identified as one of the primary barriers that has held up mobile software development to date, as the current crop of Java, Symbian and BREW feature phones are simply fragmented beyond belief.

We’ve already seen the beginnings of fragmentation in the Android system, as differences in handset specifications play out over the various geographic regions – and with the sheer number of players about to enter the space in the coming year this issue is bound to accelerate dramatically.  That said, it is inevitable that that this scenario will negatively impact the development of innovative, new applications for Android over the short term.  The only real question is to what extent will Android innovation be stymied?

What makes this issue to interesting to many is that, due to advocating the Apache licensing model for Android, Google seems to be actively encouraging Android fragmentation.  Ironically, this apparent paradox was first identified by Sanjay Jha, Chief Operating Officer of Qualcomm’s chipset division (ironic in that Qualcomm is one of the founding members of the Open Handset Alliance and the Android initiative!)  who, in a  Register story that emerged out of last Spring’s CTIA conference, was quoted as saying that “Google wants fragmentation in the [mobile] industry.”

Here’s where the conspiracy theories start kicking into overdrive.  Keeping all of this in mind, some have speculated that – in a thinly veiled strategy against its old desktop rivals (Microsoft), Google would potentially benefit from Android fragmentation in that it would be prohibitively expensive for any one developer to dominate any fragmented system with a mainstay-like platform such as Microsoft Outlook or Office, both “heavy clients” that rely on sophisticated software applications running on the device’s (local) hardware (e.g. the desktop PC, or the mobile handset).   A fragmented system would ultimately favor companies like Google that favor thin client / “cloud computing” models (e.g. Gmail and Google Docs), where all the application’s heavy lifting is done on the server side (via the network), rather than on the client side (i.e. the mobile handset) – in this case the actual applications on the client/handset side usually reside in nothing more than a decent web browser.  All of this poses a very intriguing question: Could Google be subtly sabotaging device-side Android application development in favor of its browser-based / thin-client model?

Bringing this post full-circle, it is possible that both these two issues (fragmentation and security) may cancel each other out, sort of… again, ultimately resolving in Google’s favor.   The theory goes a little like this:  The folks that write software viruses, worms and other such programs do so primarily for the notoriety that comes with affecting many systems/users all at once – either with benign or malicious intent.  Platforms that don’t scale simply are unappealing to most virus writers.  Similar to the natural virus protection afforded by using a niche desktop system such as a Macintosh (sorry guys, I love ya but you’re still using what I would consider a niche product), few developers will waste their time writing a virus that only affects a (relatively) small number of people, when they can get better “bang for the buck” elsewhere.  The same forces that make it prohibitively expensive for (most) application developers to support a wide range of devices in a fragmented system will also similarly affect virus writers.  In affect, by encouraging fragmentation, Google could be enhancing Android security while simultaneously crippling many of its former rivals in the desktop space (or is this giving Google just a little too much credit?).

Thoughts?  If you have an opinion, share it… as there’s nothing like a good conspiracy to spice up the industry some!

j


mobilestance 2007 year in reviewThe slow news week after Christmas is notorious for the oft-derided “year in X” reports, but rather than take time exploring the value of such “Remembrance(s) of Things (less than a year) Past,” mobilestance.com would like to take the time to indulge in our own year end recap of the most notable US Mobile Marketing developments in 2007 (and yes, the illustration on the left depicts “Old Man 2007″ knowingly handing an iPhone to “Baby New Year 2008″).

And what a year 2007 has been. Between the flurry of VC and M&A activity, the reality of a declining global ringtone market and the re-orgs that followed, the explosion of ad supported business models, growth in consumer use of key mobile data services, notable marketplace exits, divestitures and bankruptcies, new entrants in the wireless space (yes, I’m talking about Apple here), and the aggressive moves on the part of the internet portals (most notably Google, but also Yahoo and even AOL and IAC), 2007 may yet be remembered as the year mobile finally “happened” -much to the delight of the Business 2.0 crowd.

After reviewing the list please take a second and weigh in on what you feel was the most important Mobile Marketing event of ’07 by participating in the poll at the end of the piece. Also, since 2007 was such a busy year no doubt there’s plenty more that could be added to this list… that said feel free to leave a comment if you’d like to add some additional insight or if you feel something crucial has been overlooked.

Thanks much… and now without further delay, mobilestance.com proudly presents “The 2007 US Mobile Marketing Game Changers.”

  1. Google Steps it up. Not content to merely sit on the sidelines and play by the rules set forth by the US carriers, the search giant spent much of 2007 re-writing the rules of the US wireless industry. With their conspicuous “open access” lobbying effort, leadership in the Open Handset Alliance, the launch of their open Android platform, and their plans to enter the upcoming 700 MHz US wireless spectrum auction has a legitimate player, Google has stirred the 2007 US wireless pot like no other single corporate entity. While it remains to be seen as what will ultimately come of its aggressive moves in the space (although it seems Google has single-handily forced the biggest hole to date in Verizon’s vaunted walled garden) , it is clear that Google is determined to usher in a far more flexible (read: marketer-friendly) US wireless marketplace… a market that will likely be a boon to innovative third party mobile application developers, hybridized business models, and – most importantly – accelerate consumer adoption of “beyond voice” mobile services.
  2. The Rise of MMS. 2007 was the year that US consumers finally got behind MMS in large numbers, exiting news for marketers not satisfied with the simple Joys of Text. In November of 2007 the MMA reported 33% of all US mobile phone users reporting monthly use of “Picture and/or Video Messaging” – that’s up dramatically from a paltry 16% in 2006. In the younger demographic segments the numbers are even more attractive, with monthly usage peaking in the 18-24 year old group at an astounding 55%. So what does this mean? Bottom line, now that MMS has reached critical mass in the US marketers are free to (finally) capitalize on the expanded interactive and multimedia prowess of the enhanced messaging channel. The possibilities are endless… everything from moblogging, MMS-based couponing, photo contests, video alerts, pattern recognition, html email-type CRM communications and so much more. Sure, there’s nothing actually new with all of these tactics… but now we’re talking about the difference between MMS-based marketing campaigns with real ROI back to the brands, versus the eternally frustrating”test campaigns” of earlier years.
  3. Enter the iPhone. So much has has already been written on the sleek Apple device that it’s become extremely difficult to assess its actual impact. Never mind the recent eye-popping stats released on the iPhone’s disproportionate share of the overall browsing universe, or recent efforts (while fascinating and seemingly quite worthwhile) by marketers to leverage the device to deliver hypertargeted messaging to the forward-leaning, early-adopting, free-with-the-dollars demographic. No, the real impact of the device lies in it serving as a “showroom model” for the full potential of the mobile marketing channel. An independently sold (from the carriers, mind you) Wi-Fi/GSM hybrid with a beautiful touch screen, snappy web browser (snail-like AT&T EDGE network speeds notwithstanding), usable video, music and photo management options… and coming in February, a public SDK for the development of third party applications and a (rumored) flash plug-in for the device’s browser – a first for the “mobile” web (and hey just because it’s the holidays let’s not get into a debate on what is or is not actually the “mobile” web – for now let’s just go with it). It’s amazing how quickly the standard for what is “possible” in mobile has been raised since the release of the iPhone less than six months ago – and how what once passed for cutting edge has so rapidly become not simply dated, but altogether irrelevant. More than any other event in the mobile marketing industry’s short history, the entrance of the iPhone has fueled a frenzy of interest in the space – both from brands and agencies alike. The motivational equivalent of the ‘69 moon landing… with all the junior rocket scientists that followed.
  4. Mobile Advertising Comes of Age. After a few years of luring in the shadows of the mobile marketing industry, the mobile advertising market became incredibly hot in 2007, punctuated by major acquisitions by leading interactive and mobile firms, as well as a dizzying array of venture-fueled deals in the space. The two leaders in the nascent mobile advertising industry, Third Screen Media and Enpocket were promptly acquired by AOL and Nokia, respectively – while Microsoft, once again outmaneuvered in the interactive ad firm acquisitions game, was forced to settle on European Mobile Ad Firm Screen Tonic. The remaining independent mobile ad firms were also firing on all cylinders, with Amobee, Millennial Media, AdMob, Greystripe, and Quattro Wireless all expanding on the heels of fresh investment capital raised in ‘07. Newspaper giant Gannett made a major investment in SMS-based ad firm 4INFO, while Google and Yahoo played a bit of small ball (we can gut Google a little slack here… they’ve been busy rewriting the rulebook for much of the rest of the mobile industry after all). The former taking the much anticipated step of expanding AdSense into the “mobile web,” while Yahoo! announced mobile publisher services and plans to integrate mobile inventory into their Panama ad platform. As for the internet display advertising giants, DoubleClick (soon to be Google) launched their publisher platform, while aQuantitative’s Accipiter Unit (now owned by Microsoft) tied up with NYC-based MoPhap to bring mobile capabilities to their publisher-side interactive ad serving platform. Add daily press releases by major web publishers bringing mobile inventory online, and I think you get this picture: 2007 was the year that nearly everybody in the space simply had to have a mobile adverting play. Sure, there was a bit of herd mentality going on, and no doubt we’re in for… shall we say, a bit of a “correction” in the coming years (this kind of activity surely cannot be sustained indefinitely) – but regardless, the business and technological systems are now in place for brands to reach out and communicate directly with consumers via the mobile handset. Keep in mind this is very different than previous (primarily SMS-based) mobile marketing activity that simply leveraged mobile as a direct response channel activating other forms of media such as television, print and radio (as so eloquently described by Jeff Minsky of OMD in a then accurate but increasingly outdated assessment of the channel – sorry Jeff, but I couldn’t take that one lying down!). Using mobile as a broadcast-type media may be a bit controversial to some, but as long as there remains checks and balances with regard to consumer privacy (yes, the carriers seem to be pulling their weight here, although some needed to be prodded a bit on the subject) an effective system of reaching consumers via their mobile devices should flourish in the months, years and decades to come.

 

Reader Poll – 2007 Mobile Marketing Game Changers

What was the biggest game changer in ‘07?

  • Enter the iPhone (50%, 24 Votes)
  • Mobile Advertising Comes of Age (33%, 16 Votes)
  • None of the Above (10%, 5 Votes)
  • Google Steps it Up (4%, 2 Votes)
  • The Rise of MMS (2%, 1 Votes)

Total Voters: 48

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Zumobi’s (formerly Zenzui) much anticipated launch of their widget-based mobile content application was announced yesterday (beta version). The then Zenzui was spun off of from Microsoft in March of this year, and has been busy attracting third party content developers, such as Flickr and MTVN to provide content to its application ever since.

The application features a unique user interface, with content widgets are arranged in “tiles” so that users can “zoom” in and out of content areas by using the familiar “9 up” arrangement. Reviews of the application have been mixed, in that the interface has been viewed by many as slick, but ultimately overly complex. The company anticipates a hybrid pay-for-distribution (a la cable television) / ad supported business model, although I have my doubts that the application will reach the critical mass needed to attract major advertising dollars.

A few months ago I was asked to draft a POV on the business prospects on the application. Below are some excerpts from this report that (should be) OK to share publicly:

  • While on its face the ZenZui application seems to offer an elegant mobile browsing-like experience, it is faces many severe challenges from both a product and business-model perspective that would seriously put into question the firm’s prospects for success (both in the short and long term).
  • ZenZui’s decision to target “Heavy (mobile) Users” is likely born out of necessity, and one should not assume that the ZenZui product will follow the usual technology-adoption curves. Several key factors render ZenZui exclusively a “Heavy User”-only product in both the short and mid term. Optimistically, one would need to look out beyond 2010 before the product’s scale would appeal to even the least risk-averse national brands.
  • As of today the application is only available on Windows Mobile devices (<2% of current handset market). Unspecified plans to expand to J2ME devices (roughly 60% of handset market) and BREW (roughly 25% of handset market) would do much to alleviate this, but lack of any (even approximated) release dates in either of theses two environments leads one to assume they are very far from even an alpha launch (update: the J2ME version has been slated for release in “2Q 2008.Not exactly a hard release date).
  • Also somewhat surprising was that fact that Palm was specifically identified as an unsupported format (with no development plans), despite the popularity of the platform among Zenzui’s identified “heavy (mobile)-using” consumer target.
  • Without regard to specific memory requirements, the main challenge from a handset resource allocation perspective is that in order to function properly the ZenZui application would need to be “always on” (running in the background) on the end user’s device. It is well-known among mobile developers that multithreading on a mobile device is fraught with challenges, and that other than the most expensive Windows Mobile, Apple and Blackberry handsets, other (more common) handsets would likely suffer severe performance issues if the ZenZui application were “always on.” In the short term this issue would seem to reinforce ZenZui’s decision to target “heavy (mobile) users,” as they would likely be the only ones with handsets that could support the application, regardless of development environment (Windows mobile, J2ME or BREW). This limitation could be overcome over the long term once handsets “caught up” to this requirement (an unlikely scenario in the next few years due to the 18-24 month handset replacement cycle).
  • ZenZui’s non-standard coding environment assumes that developers will be willing to learn a new programming language in both a new / untested medium (mobile) and an application space that has yet to reach any legitimate level of consumer acceptance (ZenZui). As it is, brands and digital publishers are just beginning to embrace the need for “mobile-dedicated” sites in general, and when they do so are overwhelmingly choosing to code in resource-saving standard XML, or parse their standard web pages through a web-to-mobile “auto rendering engines,” which essentially remove page images and parse the (online) page into a standard mobile style sheets on the fly.
  • Numerous high-profile research studies relating to consumer adoption of mobile data products and services identify price sensitivity as the top barrier to adoption. Other than the severe handset requirements detailed above, Zenzui’s other major price-related barrier to consumer adoption is the requirement that, due to the Zenzui application’s need to refresh its (local) content over-the-air via the carrier data networks, the user must subscribe to an unlimited (“all you can eat”) mobile data plan. As of 3Q 2007 the majority of wireless subscribers have balked at unlimited data plans, which (notable AT&T iPhone bundled voice/data rate aside) can cost consumers a hefty $15 to $30 per month.
  • By pursuing a pay-for-distribution / advertising revenue-share hybrid business model, ZenZui seems to be following a model highly similar to that employed by the Cable Television Industry (Cable System Operator model). While clearly brands are comfortable “paying for placement” (even in the advertainment space), most digital content providers are not. High profile digital publishers will likely balk at paying a CPM and/or CPC on use of their content (on the contrary, many content brands would insist on payment for allowing Zenzui to gain distribution on the back of their content and brand equity). In the short term ZenZui has circumvented this issue by giving their product away to their content providers, but over the long term this will likely become a barrier for many premium content brands.

You can watch the Zumobi youtube promo video here:

msn mobile jaguar adMicrosoft has opened up advertising inventory in the US on its MSN Mobile homepage (mobile.msn.com), Reuters reported today. This follows similar moves by Microsoft in Belgium, France, Spain, Japan and the United Kingdom. Currently the MSN’s homepage is rotating banners from Bank of America, Paramount Pictures and Jaguar in an above-the-fold position, just below the search window.

In my testing of the new, ad-enabled MSN Mobile home page, I found that Microsoft seemed to be serving ads from an internal ad server, and is clearly not optimizing the ad size for all handsets, as MSN served the same 215 X 34 ad unit for both my Blackberry 8830 (Verizon), Samsung A717 (AT&T) and Samsung A900 (Sprint)… while a broken image was served to a Motorola V3T operating on T-Mobile (perhaps due to the fact that the handset screen width is smaller than 215 pixels!). Also, it seems that MSN is unfortunately not supporting “Text Under” links below the banner, which have been shown to significantly increase click-thru by adding an additional “clickable” call-to-action.

In addition to serving the mobile ads internally, MSN appears to also be (in some cases) hosting the post-click advertiser mobile microsites. In the case of the Jaguar ad shown, clicking on the link takes you to a Jaguar mobile microsite hosted (and possibly even created) by Microsoft. I’ll leave the site criticism for another day, but if you visit the site you can see for yourself that the most critical image asset – the advertiser logo – doesn’t even render correctly.

Bloomberg.com published a piece today about how the carriers are keeping the cost of mobile advertising artificially high due to carrier revenue share. Google, Yahoo and Microsoft are apparently upset that they must pay the carriers a percentage of ad revenues generated by carrier referral traffic (i.e. traffic coming from the carrier portal, or “deck”).

I’m a bit neutral on the topic myself. The carriers have every right to charge for what is a pretty big value add in mobile – generating traffic. If the portals feel they don’t need the traffic, let them try to survive on a 100% off deck model (as opposed to the hybrid strategy currently employed by most major mobile publisher brands). Obviously the portals value the traffic generated from their presence on the carrier deck, or they wouldn’t be there in the first place. What I do take issue to is the artificially high CPM “price floors” set by the carriers, but that’s a topic for another day.

I must (partially) disagree with Chad Stoller of Organic, who is quoted in the piece as saying that “the carriers are too busy trying to protect the money they are making now to look at the next way to make money.”  In my view the carriers are simply grabbing the money now while they can. Most agree that their walled gardens are on borrowed time, and with the open handset alliance and other initiatives, it’s only a matter of when – not if – the carriers iron grip on the mobile spigot will come loose. Until then, it’s hard to begrudge a company for leveraging their position for immediate gain, just so long as the long term prospects are not jeopardized.

Long term, the carriers face a bleak scenario anyway – one of the dreaded “dumb pipe” syndrome (ad integrated location data notwithstanding). But let’s face it, that’s really what they are… they’ve just been damn good at pretending they’re providing value in other business value chains (media, entertainment, commerce) for the purposes of immediate revenue streams.

And for those that are willing to do some digging…  quality off-deck inventory is available for way less than the $50 CPM often quoted in the industry press.