Scott Rafer at Winksite

Update: Oh, Oliver, Oliver, thank you too (read the comments, particularly).

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Don’t worry, I still lean so far left that on a clear day I can see Maui. I’m talking about Fox Interactive and Sky Dayton, not Fox News or British Sky Broadcasting.

MySpace, the largest and most successful social network on the planet, just announced the exclusive way it will enter the mobile arena. It’s worth noting that existing MySpace users effectively include every single mobile-savvy young adult in the US. And, Enpocket’s research finds that 30% of respondents age 18-24 prefer to access information from mobile phones rather than TV, newspapers, the Internet, radio, and magazines. So, does MySpace repeat its initial success by keeping the barriers to adoption as low as possible and giving their users a highly social, highly flexible environment in which to express themselves? Nope, MySpace cuts an exclusive deal with a yet-to-be-launched MVNO named Helio whose current installed base is zero. Further, this MVNO only offers the latest, coolest phones, and “’MySpace Mobile On Helio’” will leverage the devices’ advanced capabilities.”

Danger, Will Robinson. In September, I praised News Corp for taking the long view and investing big on the web but wondered “whether a [big] media company can avoid screwing up the innovative technology approaches of [startups they acquire].” Only time will tell, but this news doesn’t look promising.

Helio is the brainchild of Sky Dayton, who built more value at Earthlink than I’ll ever approach. To my mind, he did it by selling users a solid service at a solid price, which was especially effective as a contrast to AOL’s offers at that time. Then with Boingo, he went upmarket, trying to sell a premium Wi-Fi roaming service to users seeking freebies and discounts. It didn’t work, and Helio sounds like more of the same market myopia. People aren’t going to be excited about their phone bills going up. That’s why MetroPCS and Virgin Mobile do so well in the demographic that Helio is targeting. For those two carriers, both their services and handsets are value-priced, and monthly bills are easy to control. If Helio’s post-paid-only, technology-aggressive offers cheap phones and flat rates, then Helio will be losing a huge amount of money on customer acquisition.

The good news is that there is a wide open field for the social network startups that get it right on phones.

[via MocoNews]

This entry was posted on Thursday, February 16th, 2006 at 1:42 am and is filed under Carrier Futures, Mobile Music. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.