It’s good to see a firm that actually thinks that there may be a few mobile sites generating mobile traffic.  I had this conversation yesterday with a pretty senior analyst at a major money manager who was telling me that he is equally baffled by the whole notion of 1 web.  He said when he first got his iPhone he surfed websites, but has now switched to mobile because….they actually are better on mobile.

I also was lucky enough to attend a luncheon yesterday where Jim Spanfeller, the CEO of Forbes.com, spoke.  He was discussing digital media, and more specifically the web, but what he said holds true in my opinion for mobile as well.  Simply put, taking content from other mediums and pushing them onto new mediums isn’t the answer.  Forbes.com shoots something like 30 made for Web clips per day.  Based on his experience and success, you need to create content tailored to the medium.  Conceptually this is simple, but the execution of course is not obvious.  I don’t think the mobile code has been entirely cracked, but it will be.

In any case, here’s an cool chart Hitwise put out.  My only problem with it is that MocoSpace isn’t #1:

I was disappointed to hear about Mowser’s demise this past week, but nearly shocked to read the parting blog from one of its co-founders, Russell Beattie.  For those who haven’t read it, I summarized it in the title.  According to Russell the mobile Internet is dead, “…I think anyone currently developing sites using XHTML-MP markup, no Javascript, geared towards cellular connections and two inch screens are simply wasting their time, and I’m tired of wasting my time.”  He goes on to state that the traffic isn’t there and really won’t be until iPhones and other HTML browser-enabled devices become the norm.

Personally, I don’t know Russell, though I’ve met his other co-founder Mike Rowehl.  Both are clearly mobile savvy guys, and I’ve enjoyed reading their blogs and playing around with Mowser.  I always hate to hear about entrepreneurs failing, unless they are competitors.  In Russell’s case it sounds like he’s endured some pretty serious financial hardship.  Still, I’m surprised by how jaded his view of the mobile Internet is given the early success of many companies he’s familiar with such as Admob, Getjar, MyWaves, Radar, yours truly (MocoSpace).  Each of these sites are  generating 10’s of millions, and in MocoSpace’s case over 1 billion page views per month off of a unique audience in the low millions.  Those numbers may not stack up well to the Web…yet, but the trend certainly appears to be our friend.

The obstacles to mobile Internet adoption are substantial and include handsets, awareness, operator data price plans, and more.  But again, the trend is our friend here based on what I see everyday, ie better, cheaper handsets, growing awareness, and operators moving more aggressively to make the mobile Internet happen.  In fact based on the impressive traffic that some relatively small operators such as Metro PCS generate thanks to their open garden and simple, affordable data pricing, I spend a lot of my time salivating about what the next 2 years will bring.

Ever since my first foray into the mobile consumer industry, mobile game publisher JSmart, which I co-founded with mobile engineering guru Jamie Hall, I’ve been very suspect of people trying to predict US consumer behavior based on what happens in Japan.  So I agree with Russell, we won’t be Japan.  However, I also remember people scratching their heads here in 2001-2002 wondering if SMS texting would ever take off.  And many thought not.  In December 2007, over 1.5 billion messages were sent per day! Technologies may take longer to cross the chasm here, and take different shapes along the way, but in my opinion there is no doubt that the mobile Internet is both here and on its way.  Americans and consumers around the world will use the Internet on their phones, and it will be different in all sorts of ways than the wired Web.

People who argue for this notion of 1 Web make me feel stupid because frankly I have no idea what they are talking about.  Russell pulls out some M:Metric stats to support this idea that the iPhone proves there’s no chance for success.  “It would be easy to say that the iPhone “disrupted” the mobile web market, but in fact I think all it did is point out that there never was one to begin with.”  Without getting into why I think M:Metrics data are biased towards smart phones etc., I just have to wonder how he arrives at this conclusion when so much of what I read about are companies building iPhone-ready sites, applications, games, etc.  Aren’t the best iPhone sites ones that were built for it? If you’re building Internet sites to look great on a mobile device, isn’t it reasonable to call that site a mobile Internet site? Doesn’t it mean that even the coolest device, with the coolest HTML browser needs mobile Web sites to offer the best experience? Facebook thinks so, ESPN does, and so does a whole slew of other well run consumer Internet businesses.

Simply put, I don’t buy that a 2, 3, 4 inch screen is going to ever deliver the same experience as a 20inch screen, any more than I expect my friends to invite me over to watch the SuperBowl on their new MacBook Air while the 50inch hi-def flatpanel from Sears stays dark in the other room. Then again as a Giants fan in Patriots territory, I may not get invited to next year’s Super Bowl party anyhow.

People will expect, and they will get different content, formats, features, etc. for different devices.  Unless you expect the wired Web to stop improving and taking advantage of the horsepower that desktops and flatpanels deliver, I don’t get how someone could ever think there will be a unified Internet experience across such a range of capabilities. In my opinion, the bottom line is that people are and will continue to develop new sites, services, applications, etc. specifically for mobile devices, and they will be different than those browsed on machines with 5-10x larger screens and orders of magnitude more power and bandwith.  Just as Walmart had to build a website as a distinct experience from its bricks and mortar experience, it will build a mobile site.  In fact, just the other day I noticed that Sears now offers mobile phone alerts.  It’s very safe to say that Sears has not been considered an innovative company in my lifetime, though prior to it they did reinvent American commerce through the mail-order and catalog business.   Now, if Sears is tipping its hat to mobile on its homepage, I think you may want to think twice before putting any nails in the mobile Web coffin.

For Russell and all fellow entrepreneurs, I end with one of my favorite quotes from Theodore Roosevelt:

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat

The other day Compete posted a chart showing the top 20 social networks in the US. Not surprisingly, none of them were mobile as they, nor does anyone I’m aware of track mobile Internet sites yet. Actually Nielsen & M:Metrics do, but in a flawed manner that really only counts Internet sites surfed by smart phones with html browsers. I’ve never really understood from either of them how this is representative of the 200million + non smart phones in the US, but that’s another story. Anyhow, using Compete’s data on MocoSpace’s web traffic we mocked up our own chart to see how we would rank based on our web traffic alone. Moco would be #26 based on visits and quite a bit higher based on uniques:

However, we then added in our mobile traffic and this is how things shook out:

From this chart, it looks like mobile is starting to matter, and I believe will matter more and more to everyone from consumers to advertisers over the next 2 years. As the chart shows, reach is still an obstacle as mobile is in the early adopter phase, but once hooked, consumers are active on their phones.

btw - if anyone knows of any third party sites that track mobile traffic, please share

We just announced our second round of financing along with some updated stats.  MocoSpace’s traffic is now at 1 billion page views per month driven by over 2 million members.  It’s a great milestone for us, and a tribute to the hardwork of Moco’s team to deliver on our mission to offer our members the best place to find friends, have fun, and stay connected on their mobile phones…for free.

Since founding the company at the end of 2005, Jamie and I have believed that the mobile Internet, like its PC counterpart, should be free and ad supported.  Today, the tremendous community we have at MocoSpace reinforces our belief, and demonstrates the untapped power of the mobile Internet.

Some people I speak with question the potential, and in some cases even the existence, of the mobile Internet.  Others believe that the only sites that will enjoy any significant traffic and success are websites with mobile extensions.  I believe that there millions of people in North America that don’t sit in front of a computer all day, don’t have broadband access at home, but want and deserve a great way to find friends, have fun, and stay connected.

In 2008, I believe MocoSpace will eliminate any doubts about the potential of the mobile Internet.

In case you missed it, Herb Greenberg picked Eddie Lampert (ESL Investments) as the worst CEO of 2007 here.  In his own article, he lists much more appropriate candidates but choose Eddie probably to make some more headlines and come across as a bit savvier than the rest of the crowd.  Frankly, I think Herb should be embarrassed.  By all accounts Sears has had a bad 6 months, with it’s stock getting cut in half from a high of nearly $200/share, and a 99% drop in profits in the most recent quarter…..wait did I say profits? Yes! And here’s what makes Herb’s pick such a bad attention getting joke:

Sears this year will turn a profit all 4 quarters, as well as generate cash (Herb couldn’t find a company that may actually lose money to be a candidate?)

• Sears unlike dozens of lenders & banks will not undergo the 10’s of thousands of layoffs announced by failed and struggling players in the housing & finance sector.  In fact, Sears & Kmart continue to hire in every store I’ve seen.
• Sears actually had a very solid first 1/2 of the year
• Sears continues to make improvements, but the results will take time

So some how despite many companies going under, others laying off 10’s of thousands, and others bleeding cash, Sears which is doing none of these things has the worst CEO. Oh wait there’s more, Eddie Lampert isn’t even the CEO!

Herb, do you really crave the spotlight that much, that you’d make such a stupid pick just to get people to talk about you more? I guess there’s no such thing as bad press when you write for an ad supported blog.

I keep coming across this question about if or when mobile will create it’s first billion dollar mobile Internet consumer brand.  Last month, I was on a MITX panel in Boston where an analyst from the Yankee group asked if mobile would produce one.  This week, I was supposed to participate on a panel for Rutberg & Co. (weather prevented me from making it out there) where this question was also going to be posed.

First, I’ll say that I consider a little bit of an honor that they are asking me because in some ways the question implies that MocoSpace could be one.  The short answer to that is, I sure hope so!

I think it’s funny how easily people throw out the billion dollar number.  Maybe it’s just Vermont, but where I live a billion does seem like a lot of money.  And didn’t MySpace get sold for about half that?

The long answer is that I have no reason to believe that mobile will be any less successful than radio, tv, or the Internet.  One could make a lot of arguments that it will be even more successful then them.  Personally, I think there will be a lot of successful companies that make the crossover from tv (think American Idol), the Web (Yahoo, Google, etc.), and radio (I’m sure if Howard Stern wants to do mobile, he’ll pull it off in a big way. Not to mention NPR already has a mobile site).  However, the success of those and many others doesn’t mean that pure mobile plays won’t also find success.  In Europe & Asia they already are.  In the US, we’re starting to see substantial growth driven by favorable trends that should continue to accelerate including the iphone, Verizon opening up, Android, Nokia’s N95, more economical data plans, etc.  I don’t want to say it’s going to play out exactly like the Internet did circa 1994-99, but then again if it looks like a duck, acts like a duck, and quacks like a duck….suffice it to say there are more similarities than there are differences.

So who will the billion dollar mobile companies be? Well, probably similar to the Web, I think there will be billion dollar portals, m commerce sites, and communities.  These are sites that will, like the other mediums, be able to build, engage, and down the road monetize large audiences.

So while Moco is certainly building, engaging and monetizing a large and growing audience, I don’t spend my time thinking about theoretical valuations.  I’m too busy trying to make sure the next person who signs up for Moco has a great experience…

MocoSpace is a mobile community that is entirely supported by advertising.  While it’s still early days compared to the Web, it’s proven to be a viable business model for us.  It wasn’t always so obvious.  Back in 2005 when we started Moco, there were very few companies that enabled businesses like ours to monetize.  Today that’s changed.  Mobile advertising is definitely a hot topic with major players like Google, AOL, & Nokia moving quickly into the space. So far most of what I’ve seen is mobile versions of what’s happened on the Web, ie banner and text ads.  While the dollars are growing quickly, mobile is still a  relatively  small line item on agency budgets.  The fact that it’s on everyone’s radar is a big improvement from 2005, and I think the future gets nothing but brighter from here.

Why do I think mobile advertising works and will continue to work:

1. People like free services in exchange for ads, ie radio, tv, Internet

2. Most of the mobile ads I’ve seen are fairly relevant to the audience so whether its coupons, store locators, ringtones, etc. I think most people find them much more interesting than much of what’s on the Web.

3. Mobile phones are so personal, and surfing on them is such a focused activity that it’s a great platform for branding building.

4. Because Moco has over 1.5 million members and nobody has complained yet

Here’s a list of some of my favorite partners, and a good place to start if you are thinking about advertising or monetizing your mobile site:

1. Admob is an easy to use platform with good reach and lots of ad $$.  It supports CPC and CPM ads. Omar Hamoui (ceo & founder) is a class act as is the rest of the team.  That means you’ll get good service from them, and paid!

2. ThirdScreen, now AOL, is a bit more complicated to use, supports only CPM advertising, but the platform is very rich and lets you do and know a lot about your site, campaigns, etc.  They just got acquired by AOL, but the new team has been cool to work with.

3. Medio is another good choice.  They offer a good, easy to use platform, and have proven to be a reliable partner since as long as we’ve been doing business with them.

There are lots of other companies out there including Yahoo, Google, and Nokia.  I haven’t worked with all of them, so I can’t really recommend them yet.  Yahoo and Google will certainly be players in the space.  If you want to advertise, both Yahoo and Google have good mobile reach, but if you want to monetize your own mobile property I’d recommend giving them a few months to further refine their offerings.

Citi got downgraded today by Goldman Sachs from neutral to sell.  There are two things I find amazing about this.

First of all, how did Citi get into the predicament they’re in?  Between the SIVs, CDOs, MBSs, LBOs, and god only knows what acronyms I’m missing, it’s truly astounding to me that none of the guys & gals making millions thought to hedge any of their positions, increase reserves, limit their acquisitions, or generally practice anything closely resembling common sense! The word stupidity doesn’t even begin to describe the incompetence of Chuck Prince and his team.  Now, I’m no banker, or in Chuck’s case lawyer, but rather just a middle school teacher turned entrepreneur/investor.  Yet even I know that lending people $500k to buy a 1 bedroom winter vacation condo in Miami with nothing but their word that they can afford the interest only mortgage is not really a good idea.  Furthermore, I know that if I do loan them that money for their 2nd or maybe 3rd home (I once heard one of these real estate gurus on CNBC tell a middle class woman she should buy a few condos in different markets to “diversify” her portfolio!) I want to sell that loan off and have no recourse for it.  Maybe it requires a law degree or an MBA (neither of which I have) to understand how being on the hook for billions of $$ of securities backed by no doc loans, subprime arms, and the like is consistent with creating shareholder value, good risk management practice and the like.  Personally, I think a bit of common sense and responsibility would’ve gotten them much farther.  Seriously, you would really have to try, and try hard to create the mess Prince has left behind.  He thinks he was doing the “honorable”  thing to do by resigning.  How about a public letter of apology to all the shareholders, and retirees who depend on Citi’s, now in danger, dividend to make ends meet? How about donating the $40 million exit pkg? Nah, instead he does the honorable thing, resigns, and heads off to lunch at Tavern on the Green. It’s a wonderful life!

Second, as if the Citi debacle isn’t enough to make me think maybe I could run a small international bank, but Goldman comes along after Citi’s shares have dropped from over $50 to the low $30’s and tells us all we should sell Citi with a 12 month target of $33/share, essentially the price it’s been trading at for weeks.  With analysts like that who needs enemies?! Where was this analysis when the shares were at $50? Does this mean I too can be an analyst at one of the most revered firms in the world? Let me give it a shot.  MocoSpace founder & mobile Internet entrepreneur Justin Siegel has issued a neutral/hold rating on shares of Microsoft with a 12 month price target of $34 per share.  Wait, let me check….holy cow I’m good.  Microsoft closed at $33.96 today!

Here’s the good news for Citi, Goldman, and shareholders:

For shareholders - I think Citi is probably a pretty good buy if you are willing to hold it for at least 5 years.

For Citi - I know you probably wanted Thain, but for the right pkg I could be gotten.

For Goldman - Though I’m gainfully employed, a little wining and dining could get you a foot in the door because unlike Mark McGoldrick the first $70 million gets me and I’ll even sign a non compete!

This week I attended and presented at the Under The Radar conference at Microsoft’s campus in San Jose. I saw some very cool presentations by Jangl (social voice), Hovr (mobile games), and Frengo (mobile widgets). I also had the very cool opportunity to meet Marc Andreessen (yes, the Netscape guy now chairman of Ning ) He seems like a very nice guy, and someone whose brain would be fun to pick.

For some reason MocoSpace was considered a graduate circle company. I guess because we’ve already raised some financing, and have traction in the mobile community space. So unlike most of the other companies, I didn’t get grilled by VC’s after my presentation, which is sort of a shame since I would have been curious to hear their feedback. Well maybe not.

In general, the feedback given to presenting companies was good, but not unexpected, ie “don’t try to be all things to all people”, “you’re too early”, “i don’t think it’s a big enough market” etc. etc. It’s not that VC’s aren’t smart, they are, but just because they are smart doesn’t mean they are right. Some of the people in the audience probably passed on Google way back when, as well as helped drive Friendster into the ground though I’m happy to see them make a bit of comeback.

If you are a technology startup looking for funding, you should give Under The Radar a shot. They do a nice job organizing the event with good food, drinks, and a solid crowd. Plus, my sense was that the VC’s there were serious about looking for companies to fund. A few tips for pitching:

1. One guy I saw pitch was argumentative, arrogant, and rude. Let the VCs have those qualities, but they aren’t likely to get you far with them. Be respectful, a good listener, and all the other things your mom taught you to be around people with hundreds of millions of dollars at their disposal!

2. Be able to summarize your company’s goal in 2 sentences or less. If people can’t figure it out in the first few seconds, then chances are they’re going to check their blackberries until the next company comes up to pitch.

3. It’s ok to say “I don’t know” especially when you don’t!

4. Demo, demo, demo - Demos are worth a thousand words, and they demonstrate bravery since they ALWAYS fail when you need them to.

5. Keep your presentation short & simple. Focus on 3 areas. First, the team. Who are they investing in. Second, the market opportunity. Social networking, microwaveable popcorn, buggywhips, etc. In other words, what’s the market opportunity. Third, what’s the product. Why will your product work, matter, etc.

6. Don’t pitch. I think way too many people think they need to raise money to start their business. The longer you can go without taking money, the better off you’ll be in many cases. If you want to build an oil refinery (btw - we need a few new ones), then you need money before breaking ground, but if you want to build a consumer Internet site you can probably get pretty far along without taking money.