However, recent developments cast some doubt about the long-term viability of the present business models.  VeriSign, just sold a controlling interest in its Jamba and Jamster business units to conglomerate News Corporation who plans to merge them with its Mobizzo unit, which sells short video clips of TV programs.  The sale was for $ 187.5 million for 51% of the company originally bought for $273 million in 2004.  Additionally, Real Networks just announced that it will buy Korean based provider of ringback tones, music-on-demand, and other mobile entertainment services, WiderThan for $350 million.  Finally, content intermediary Mobile365 will be procured by Sybase for approximately $ 400 million.

With such high valuations, a casual observer would think that the future prospects of MoCo companies are great.  The reality is that we are witnessing the initial stages of consolidation of assets that will later lead to evolution of the entire MoCo business model.

Currently, MoCo companies depend primarily on both subscription services and purchase on demand for games, graphics, and music.  The future business model will consist of a mixture of paid content and advertiser supported content as part of a mobile marketing and wireless advertising business model.  Mobile is no different than any other media or service throughout the world in which a relative proportional amount of content is balanced between paid and advertiser supported.

MoCo will also become multimodal and converged with other media such as television and online as a means for conglomerate media companies to reach consumers anywhere, anytime with a consistent and appropriate message, programming and merchandising.

Successful companies will be those that recognize this trend and work towards evolving rather than dying as the business model of the last five years begins to dramatically change.

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