IPhone Spurs Funding in On-Device Portal Market

Media companies, device manufacturers and handset operators looking to improve consumer experience on cellular phones are relying on interactive mobile applications to foot the bill. Not just stand-alone apps, but ones that interconnect and serve up ads alongside search queries.

Action Engine, which provides a platform for developers to build and deploy suites of mobile applications, expects to announce Series E funding on Monday. Company CFO Bill Glynn declined to confirm the sum until next week. Baker Capital leads the latest round, along with Northwest Venture Associates, and The Spangler Group. All are original investors in the company's four prior rounds that total $45 million since 2000.

Funding for "on-device portal" companies like Action Engine has remained healthy. Dow Jones VentureOne estimates on-device portal company venture capital investments rose to 36 deals totaling $429 million in 2006, up from 29 deals at $266.5 million in 2005. In the first six months of this year, 14 deals were funded at nearly $130 million.



Burton Group senior analyst Richard Monson-Haefel expects an explosion in connecting applications, specifically designed for the Apple's iPhone. "The number of options you'll have to find the cheapest gas or movies will only increase," he says, explaining that some are stand-alone while others interconnect.

Action Engine has plans to introduce applications later this year aimed at search and city guides, community/social networking applications, news, streaming audio and video through its Mobile Applications Platform.

The platform offers developers the ability to build suites of branded applications that cross-reference information. Consumers can search for information on their mobile phones, like finding their way in the maps application once they've located a restaurant for dinner. Customers can insert advertisements into the apps and then run reports to monitor impressions per ad through the built-in reporting features.

The development platform supports Java, Brew, and Windows Mobile. There are plans to launch an upgrade for Windows Mobile 6.0, and add support for devices running Research In Motion within the next month--at the request of an unnamed media company that wants to offer access to news, podcasts, stocks and video from one application. The majority of its customers carry RIM devices.

Companies also can embed mobile banner ads and video commercials in any application built on Action Engine's platform. It supports behavioral advertising. Consumers can deploy an on-device application to create a search request for a local coffee shop, and the platform inserts an ad for Starbucks delivered to the cell phone screen. The consumer then clicks on the ad to call the local Starbucks and place an order for a latte, all before the results of the search request are brought up on the screen.

It's done by assigning keywords to advertisements. If the consumer performs actions related to that keyword, Action Engine serves up the related ad to the device, making the ad more relevant to the actions the consumer performs on the phone.

MSNBC.com selected Action Engine to build the MSNBC.com Multimedia on Mobile service, and in March became one of the first companies to subsidize the cost of the mobile services with advertising. Other clients include TiVo and Verizon.

Next story loading loading..