Why is AOL buying Wildseed?

AOL’s purchase of Wildseed represents an interesting development in its overall mobile strategy. Put simply, AOL is getting serious about the mobile market. Wildseed will be integrated into a new division – AOL Wireless – which also includes its existing AOL Mobile operations and Tegic predictive text input offering.

For those of you who are unfamilar with Wildseed, the company was originally known as Gitwit (as in ‘Get with it!’). Thankfully they disposed with this rather unfortunate nomenclature before the company became too well known, arriving at the 2002 3GSM World Congress armed with the their new corporate identity and a prototype handset to show operators and manufacturers.

Wildseed’s concept is based around the use of ‘SmartSkins’, which snap onto a base handset platform and customise look and feel of the device. This includes the physical appearance (e.g. branding the SmartSkin with a company logo) and the software, which is customised through code burned onto a chip in the SmartSkin.

The result is an integrated offering which enables mobile operators or handset manufacturers to target a range of segments using the same underlying technology, but still offering the benefits of deep customisation. Wildseed likes to use the example of a band or a baseball club issuing a SmartSkin, which the operator then sells to the subscriber for between USD 25 and USD 40.

Back in 2002, when I first met the company’s founder Eric Engstrom (who previously led multimedia DirectX development at Microsoft), it was a concept some way ahead of its time. Wildseed targeted the US market first, forming a partnership with Kyocera to develop the handset required for its solution. However, the deal feel apart, leaving Wildseed without a device and Kyocera with a law suit.

Flash forward to 2004 and Wildseed finally launched a commercial offering, working with Korean manufacturer Curitel for the handset and second tier US operator Dobson Cellular as the carrier partner.

To be frank, it hasn’t been a huge commercial success. There are about 20 SmartSkins available, including some interesting ones with integrated gaming controls, and a handful of brand partnerships with media companies, but it is a concept which has never really fulfilled its potential.

However, in developing this solution, Wildseed also created a full Linux OS optimised for mobile handsets and sophisticated handset customisation platform. It is these key assets which AOL is interested in. Armed with this technology, its own extensive media libraries, the AOL mobile instant messaging franchise and Tegic’s existing customer base in the mobile industry, AOL has all the elements of a rich mobile user experience.

It can sell these to carrier and handset partners, as well as potentially launching its own mobile offering. Did someone say AOL MVNO?

It’s not just AOL that’s looking at these opportunities either. Yahoo and Google are both actively expanding their mobile operations and recruiting user experience experts.

As consumer demand for mobile media accelerates, these companies are realising that their existing brand assets and subscriber bases can be married with virtual or alternative mobile networks to establish a new channel direct to consumer’s handsets.

These ideas will be covered at MEX in the session entitled: “Media opportunities, MVNO partnerships and alternative business models.”

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