(Open+Musi).WAVE=?

Thomas Husson | September 30, 2005, 08:26 AM

I wondered in a recent post, which company would be the next target of the M&A fever. The answer was Musiwave. Bought by Openwave for 100 M euros (+15 if the performance is there).

It was no secret Musiwave was for sale. The question was rather when and by who ? I was a bit surprised by the name of Openwave. It was traditionally focused on technology platforms. With this acquisition, Openwave will also be able to provide content & services on top of the technology applications. They will also benefit from an existing customer base (mainly the Vodafone contract for full-track music downloads) and from established credentials with record labels. The guys at Musiwave have a strong marketing know-how and it is a very innovative and dynamic staff.

However, the current revenues of Musiwave derive mainly from the ringtone market which is increasingly under pressure. Margins are decreasing, but Musiwave's marketing has some ideas on how to bundle music with ringtones and RBT. The big challenge is now to compete at an international level with the big players : Nokia-Loudeye (which btw lost the Orange France contract against...Musiwave), Ericsson/Napster, Sony and sooner or later RealNetworks.

I have a briefing scheduled in the next few days with Openwave, so I'll let you know some more in October.

This deal illustrates perfectly the current change in the mobile content value chain. I am currently conducting a research on this topic, so I you want to share your views, feel free to drop me a line at thusson@jupitermedia.com