Mobitween bought by Zed

Every reader of this blog will have realized for some time that I am a fan of mobile Flash and the good folks at Mobitween (just see here and here), the mobile Flash pioneers from Paris. And, boy, would I have wanted to work with them some more but, alas, it seems this will remain wishful thinking as they have been the first prey of D2C giant's Zed M&A fund: yes, they have been acquired.

The deal - unfortunately for me, I guess - makes a lot of sense to Zed, who have been raising their revenue numbers to heights so dizzying they would nearly make the initial investments comprehensible... (if only the initial investors had seen anything of that success; but well...): Zed famously claims to make up to 85% of their revenue with

 predominantly in-house produced generic content, and when it comes to speed and efficiency, mobile flash in general and the guys at Mobitween in particular have no match.

So, well done them, and let's hope Flash will continue to roll as it started to promise, so that we can all marvel at dramatically reduced time to market and, consequently, hopefully a vastly improved content offering all around (oh, and buy Zed shares if you can).

Super-Glu!?

It is the conference season, so I am falling a little behind but this is one that needs to be recorded here: The good folks from Glu announced that they would acquire AIM-listed 3D games specialist Superscape for $36 million (which however includes $11m in cash Superscape is still having in its savings account). On $7.2m revenue for the 6 months ending July 2007, this would equate to a revenue multiple of c. 1.7 (based on flat sales and a purchase price from which the cash at hand is deducted) which should be substantially higher than Glu's c. 0.6 (awaiting the announcement of their 2007 results).

Glu has been hit brutally following their announcement of their Q3 results, falling from somewhere around $10.40 per share to $4.19 tonight based on worse than expected growth and earnings. They had recently announced expansion into China - a market with numbing growth numbers but also hard commercial parameters - through the up to $40m acquisition of MIG, which however failed to help their share price.

Now, Superscape adds market share in more familiar pastures, namely in the US where 98.4% of its revenue are generated, and this may well have been the main reason for the buy: it will cement Glu's position in this key market. I am however not sure if there is more to this deal than that because the remaining parameters of Superscape do not look too good: the company focussed on the niche 3D sector, which did not fly as predicted (or should one say demanded) by the carriers. It is loss-making (and has been for a while if not forever). It grows less than Glu (as remarked by an analyst (report courtesy of MoCoNews).

Even if the deal rationale was synergies (reducing headcount as all they would really need from Superscape is their Moscow development facilities [which are a rather impressive operation as I could learn a few years back during a visit] and shut down their US and possibly UK offices), one would have to ask if this was the right deal. Superscape lost more than $2.8m on $7.2m revenue, so it is rather questionable if they could swing this into profitability quickly. I would posit that Glu would be rather capable of fighting for revenue and market share if it would not have to look at cost (their roster of titles is pretty impressive and they have been on an aggressive growth path), so would they not have been better advised to look for a profit-boosting acquisition as this seems to be their Achilles heel? Prove me wrong, Greg, please!

Handmark gets its hands on Astraware

One is a leading content provider for the niche smartphone market, the other a leading games developer for the niche smartphone market (Palm, Windows Mobile, Blackberry, etc), now they will become the leading content publisher for the niche but quickly growing smartphone market. Enter the reported acquisition of Astraware by Handmark.

Handmark publishes smartphone versions of e.g. Tetris and Scrabble and also runs the Pocket Express mobile news service. Astraware does the same for Bejewelled, Zuma and Chuzzle but also has a sizable portfolio of generic games and applications. They also have their coding hands in iPod games. As a lot of high-end smartphone stuff is retailed through shops where Handmark has a decent footprint, the two should improve margins on Astraware titles immediately. Presumably their distribution footprints for the remainder (e.g. is Astraware a Microsoft Gold Partner and embeds lots on Windows Mobile devices) also provide for some synergies.

Unfortunately nothing was reported on deal terms but, on the merits, this makes sense. Good luck, guys!

Nokia pockets Enpocket

Nokia has agreed to buy ad-platform provider Enpocket for an undisclosed sum. The deal is expected to close later this year. This, coupled with Nokia's recent announcements concerning Ovi, shows the Finnish giant's push into other parts of the mobile content value chain.

Nokia's CTO Tero Ojanperä highlighted just that: “Nokia has already announced its intention to be a leading company in consumer Internet services and we believe that mobile advertising will be an important element in monetizing those services for our customers and partners. [...] This acquisition is a [...] move to bring the reach and depth of Nokia to organize the market across the world, and make it easier for an ecosystem to develop.”

Nothing much to add, I guess. It'll be interesting if they will manage to leverage Nokia's might to extend the reach of Enpocket or if the latter will simply be absorbed by the sheer size of the former...

D2C consolidates: Buongiorno buys I-Touch

eSo following LaNetroZed's acquisition of the majority of Monstermob earlier in the year, Buongiorno now played its part in consolidating the face of mobile D2C by acquiring I-Touch, the previously London-listed player (PDF press release here).

Of course, I-Touch had gone through an M&A spree of its own a couple of years back (it bought Spanish Movilisto and Finnish Jippii [meanwhile split up and perished]) before being gobbled up by Japanese giant For-side.com. Then of course all seemed to have gone a bit pair-shaped: when For-Side bought it, it cost a sweet £ 184m. Earlier this year, the management bought it out from its owner for allegedly $100m. Now, Buongiorno only had to pay about half that, namely €141m (incl. €12m in debt), which equals c. £ 95m or $190m. Someone did make money after all...

After the acquisition, the combined company apparently boasts more than 1,100 people in 20 countries and business in more than 40 countries.

What will this mean for the D2C sector? That with LaNetro and Buongiorno, there are now two more multi-national giants to compete with Jamba/Jamster? I wonder... All of these three had territories where they were/are strong and others where they weren't/aren't. The consolidation basically means that the offering will be less scattered and the players involved will stand a better chance to be recognised in the market, reducing volatility of their business.

Buongiorno is said to have been doing reasonably well in the more recent past: as per their last available quarterly report, revenues, EBITDA and profits were all up and rather healthily. But whilst they are amongst the big spenders in e.g. Italy or the US D2C markets, they were more or less absent from some other markets (the UK for instance). I-Touch and the markets it brings to the deal will help to strengthen their market position and they will be able to push their D2C model even harder now. The added footprint will allow them to get a better grip on pricing (which is something their board was sensitive about).

And here I was thinking that they were balancing it out with B2B, namely platform provision, master aggregation and, more recently marketing (Mitsui JV and acquisitions of Flytxt and HotSMS). But Buongiorno clearly has evolved with two equal columns to stand on. Congrats!

Update: Buongiorno CEO Andrea Casalini is certainly not shy: He said in the FT that they "had looked at other targets, including Jamba [...] and [...] LaNetro Zed, too.

Oberon plays mobile with I-Play

Finally... I-Play and Oberon today announced that the former would be acquired by the latter, allegedly for $110-120m. A deal involving I-Play had been rumoured to happen for quite some time, so good for Gosen and his team that they found a suitor. And not a bad one either: Oberon is an online gaming powerhouse, so a move across to mobile makes sense (and they had probably realised that their acquisition of Blaze (which itself was the combination of Synergenix and Kayak Interactive) last year wasn't getting them anywhere close to where they need to be). I-Play with its CEO David Gosen certainly showed stamina. They published some pretty cool titles (including Gamevil's critically acclaimed "Skipping Stone" and hit series "The Fast & The Furious") and in spite of oft rumoured shortage of cash just hung in there.

Oberon also raised some fresh money from investors Goldman Sachs, Oak Investments and Lehman Brothers, so all looks good for them, I suppose.

UPDATE: Today (12 Sept 2007) I-Play announced 11 new games all drawn from Oberon's back catalogue. They are Hexic and Mozaki Blocks (apparently from the creator of Tetris), Flowerz, Slinky, Fish Tycoon, Spin & Win, Bricks of Egypt, Bricks of Atlantis, Magic Match, Bubble Town and Saints & Sinners Bingo. It will be interesting to see what will win in the current battle of big brands and casual games; both are frequently cited as two of the key components of breaking into the mass market.

Buongiorno buys Flytxt... and it goes on...

Consolidation of the mobile marketing sector seems to happen faster than people can blog: Italian mobile content distributor Buongiorno has acquired UK and US operations of Flytxt for c. $ 5.4m. With Buongiorno's platform and D2C focus and Flytxt's background (they provide a tool that allows marketing types to run their own campaigns), this is a somewhat different twist to the approach Microsoft, Google, Yahoo! and others have been taking. A D2C player should really be better positioned to bridge the gap between advertiser and consumer as they are much closer to the latter.

Here's what they say: "Mobiles allow marketers to reach individuals in new ways, which are not possible with other media and open up dramatic new opportunities for marketers to interact with consumers. Flytxt's work with Orange on its 'Orange Wednesdays' campaign is testament to how powerful the use of mobile can be as a marketing and advertising tool". By way of background: Orange Wednesdays are a BOGOF cinema service that has mobile ticketing components (i.e. you can sign up/participate via mobile), and if we get this right, the mobile component is based on Flytxt's propositions...

No numbers on usage and/or take-up though, and that is a pity... Other than that, this combination could be intriguing. Bring it on, folks!

Smart negotiations OR headaches with widget economics...

Not really mobile but rather noteworthy and juicy, so here goes: According to TechCrunch, MySpace pockets Photobucket, the web's #1 photo site (ahead of Flickr) for some $250m + earn-outs. Photobucket has 40m users, much more than YouTube had when they were acquired by Google. Therefore, TechCrunch contends that MySpace made a killing. So far interesting but not really out of the ordinary. Now, here comes then:

There have been consistent rumours that MySpace briefly flexed its muscles when in later stages of negotiations with Photobucket. In short: it shut the Photobucket links on its sites down (see here). All this was about, well, $$$: MySpace would not benefit from ads that are embedded on Photobucket's widgets. This constitutes a violation of MySpace's terms (rather understandable). So: Shutdown! ... A brief reminder on just how much Photobucket depended on MySpace's platform in order to sustain its user based and value. The site generated lots of traffic for Photobucket-hosted content: according to the Photobucket co-founder and CEO, Alex Welch, quoted in the above posting, 50%+ of all MySpace pages contain Photobucket content... They were between a rock and a hard place as the position of widget makers and their "hosts" is uneasy at best (see the interesting post of Andrew Chen here).

In any case, at that price, it was certainly a deal that looks much healthier than YouTube did ($13 vs. $67 per user) - the numbers again are as per TechCrunch - and I would applaud MySpace on some nifty piece of negotiating! Given the whole interdependancy in the widget world, it was probably a proper win-win, too. Halleluja!