Amobee Media Systems

Name: Amobee Media Systems

Offers software that allows telecom operators to insert text, graphic, and video advertisements into applications running on mobile devices such the iPhone and BlackBerry, creating a new revenue stream for operators and content providers. Amobee was chosen by the World Economic Forum as one of its Technology Pioneers 2010.

URL: www.amobee.com
Location: Redwood City, CA
Telephone: (650) 802 8871
Year Founded: 2005
Number of Employees: 50-100

Executive Leadership:

CEO: Zohar Levkovitz

Bio: MBA from Northwestern’s Kellogg School of Management and Tel Aviv University. Levkovitz was the former CTO of Comverse, a mobile network technology firm. Prior to that, he was the general manager of Smartshopper.com

President and COO: Gary Schofield

Bio: Attended Fitchburg State College and Worcester State College. Previously Schofield had been vice president of world field operation for SEVEN Networks and president of the networks at Digital Chocolate, a mobile games company.

Board Member and Advisors:

Venky Ganesan, Globespan Capital Partners

Judy Gibbons, Accel Partners (advisor)

Bruce Golden, Accel Partners

Amit On, Chief Architect

Haim Sadger, Sequoia Capital

Funding:

Amobee raised $5 million in a round of series A funding in November 2006 from Sequoia Capital and Accel Partners. $15 million was raised in a series B round in January 2007 from Globespan, and $22 million was raised in Series C funding in August 2008 from Sequoia Partners, Accel Partners, Globespan, Vodafone, Telefonica, Motorola, Cisco, and Amdocs.

Technology:

At the heart of Amobee’s business model is a technology called the Handset Application Programming Interface (HAPI) for Apple’s iPhone and Google’s Android operating system. HAPI also supports a number of other popular software platforms for mobile devices–BREW, J2ME, Blackberry, and Symbian.

With HAPI, telecommunication network operators can insert text, graphic, and video advertisements into applications running on most of the available mobile operating systems, creating a new revenue stream for operators and content providers. Software based on HAPI can also manage advertising campaigns across multiple channels including games, video, and SMS texting. HAPI can continue to serve ads while offline from the network. Advertisements can be enabled to facilitate direct responses such as click to call, click to SMS, and click to browse.

Market:

In its Q4 2008 results, Nokia estimated that global industry mobile volume in 2008 was 1.21 billion devices, or a shipment of 3.3 million units per day. As mobile penetration rates are close to or even above 100% in many markets, the mobile advertisement space has seen a huge wave of activity and investments. AdMob, after receiving $47.2m in venture funding, was recently acquired by Google for $750m, and AdInfuse, with $17.6m in funding, was acquired by Velti for an undisclosed amount. According to a recent Gartner report, mobile ad spending is estimated to grow 74% to $913 million in 2009, and will strongly accelerate in 2011, reaching $13 billion in 2013.

Most of these venture-backed start-ups, including AdMob, provide an advertisement network technology for mobile content that is typically accessed by users using a phone-based web browser. Mobile carriers would like to partner with publishers to offer advertisement-supported content on phones without the need to go through a web browser. Amobee’s technology enables them to do this.

Strategy:

At the core of the company’s strategy are its relationships with the mobile carriers. Amobee has entered into exclusive agreements with some of the large telecommunication companies, such as Telefonica and O2, according to CEO Zohar Levkovitz. Vodafone and Telefonica participated in Amobee’s C series financing.

According to the company, it wants to provide a scalable one-stop solution to help make mobile a more attractive media channel, easy to use for advertisers.

Challenges and Next Steps:

While industry experts agree on the great potential of the mobile ad market, there are several hurdles which will have to be overcome. Consumer acceptance is still questionable, especially given the fact that communication laws prohibit carriers from using user data without prior opt-in consent, which restricts their ability to target ads to consumers. There is also a need to improve metrics, allowing advertisers to see the effectiveness and impact of their ads.

Amobee’s biggest competitor is Google, which has made major investments in mobile technology and has a sophisticated geolocation technology which allows for targeting ads based on the location of the user.

Overall, Amobee is well-positioned, with partnerships with some of the leading mobile carriers. Its success will depend on how effectively these carriers will use the technology to attract and defend market share in mobile advertisements, especially compared to mobile browser-based solutions.

Compiled by Rene Reinsberg