Reuters Reports ‘Media Money Moving Into Mobile’

Journalist Alexei Oreskovic writes that while media are hurting from this sluggish economy companies have found another way to advertise by creating mobile content. In his article, Media Moving Into Mobile (9 July, Reuters), Oreskovic states,

Media conglomerates, hardware makers and telecommunications carriers are all eyeing the nascent wireless media market, spurred by smartphones like Apple Inc’s iPhone and Research In Motion Co Ltd’s BlackBerry. Highflying start-ups with strong mobile credentials, such as microblogging site Twitter, have increasingly become the subject of acquisition rumors even as their unproven business models mean a deal is unlikely at this week’s Sun Valley media and technology conference organized by Allen & Co.

Partner with Highland Capital Partners (a venture capital firm) and digital media specialist, Bob Davis believes that traditional media companies will be scrambling to purchase start-ups “‘gain the mobile expertise they need.’”

The article posits that the mobile mobile deals are “gaining steam.” Examples cited:

• Mergers and acquisitions involving mobile media and technology jumped 46 percent in the first half of 2009 from a year ago, for a total of 16 deals, according to Jordan Edmiston Group.
• M&A in the broader media, information, marketing and related technologies sector fell 30 percent.
• Amazon.com Inc and IAC/InterActiveCorp both acquired companies developing iPhone applications this spring, and in June, Amazon bought mobile advertising service SnapTell.
• Silicon Valley venture capital firm Kleiner Perkins Caufield & Buyers’ $100 million fund focused on start-up companies developing apps for the iPhone.

“The one that’s probably positioned the best on this is Google,” said Roger Entner, senior vice president for telecom research at The Nielsen Co.

Oreskovic continues by questioning if consumers will be willing to pay for mobile applications and if not, how will companies make a profit.

Adapting to the mobile wave, rather than getting crushed by it, is an increasing priority for media companies. But, as with the broader changes affecting traditional media in the Internet age, the path remains murky.

Sounds like valid questions to ask.