Wired about the wireless Web
Public, private companies join the revolution
By Bambi Francisco, CBS MarketWatch
Last Update: 9:30 PM ET Jun 30, 2000 Commentary
SAN FRANCISCO (CBS.MW) -- "I think there is a world market for maybe five computers."
-- Thomas Watson, chairman of IBM, 1943.
"There is no reason anyone would want a computer in their home."
-- Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977.
It's easy to criticize these comments in hindsight, but amazingly we've gone from those views to holding robust computing power and rich information in the palm of a hand.
A CBS.MW
special report
Industry revolution: The Web goes wireless
Japan: Where the Web is already wireless
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Talking wireless: From the message boards
In the past year, the market turbulence withstanding, investors have embraced the many wireless Internet-related companies that have gone public. There are also a flood of privately held start-ups waiting in the wings for a liquidation event or in the very early stages of raising capital.
"It's very crowded right now," said Warren Packard, a partner at Draper Fisher Jurvetson, a venture capital outfit based in Redwood City, Calif. "We saw about 500 wireless-related deals so far this year. That's double what we saw last year."
Here's a small list of public and closely-held companies to watch. Some information was provided by Peter Friedland, a wireless analyst at W.R. Hambrecht.
Recent offerings
Phone.com (PHCM: news, msgs): Went public in June 1999 at a split-adjusted IPO price of $8 per share. Credit Suisse First Boston led the offering. Provides wireless Internet infrastructure software based on wireless application protocol (WAP). Sells WAP gateways to wireless carriers and licenses its WAP browser for free to handset makers.
Aether Systems (AETH: news, msgs): Went public in October 1999 at $16. Merrill Lynch led the offering. Mobilizes Web-based applications and content by providing an outsourced middleware solution packaged together with connectivity service. Focused on financial industry, specifically brokerage firms. Clients include Charles Schwab.
Interview: The Wireless Fund
Jeff Provence started a new fund in a tough market three months ago. He talks about the three kinds of companies the fund invests in and where wireless is headed with MarketWatch.com's Bambi Francisco.
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7/24 Solutions (SVNX: news, msgs): Went public in January 2000 at $26. Credit Suisse First Boston led the offering. Mobilizes Web-based applications and content by providing middleware software solutions. Focused on e-banking.
Nuance (NUAN: news, msgs): Went public in April 2000 at $17. Goldman Sachs led the deal. The company develops, markets and supports natural voice interface software that enables the content and services of the Internet and telephone networks to be accessible from any telephone.
AT&T Wireless (AWE: news, msgs) Went public in April 2000 at $29.50. Goldman Sachs, Merrill Lynch, Salomon Smith Barney were the bankers.
I3 Mobile (IIIM: news, msgs): Went public in April 2000 at $16. Deutsche Banc Alex. Brown led the offering. Delivers personalized information to users of mobile phones, pagers and PDAs, primarily through short message service or SMS.
Go America (GOAM: news, msgs): Went public in April 2000 at $16. Bear Stearns led the offering. Mobilizes Web-based applications and content for mobile workers and small to midsized businesses. Reseller to consumers of wireless service access.
Recognized names making inroads
InfoSpace (INSP: news, msgs): Wireless Internet infrastructure company. Has relationships with more than 25 wireless carriers, including Vodafone and AT&T Wireless. Has location-based, merchant services and other applications to provide the infrastructure platform behind wireless carriers branded-services.
Inktomi (INKT: news, msgs): Scalable Internet software infrastructure company. Has a stake in privately-held AirFlash, a location-based service provider. Has partnered with privately-held AlterEgo to deliver scalable infrastructure solutions for wireless Internet. Had partnered with Nokia to deliver infrastructure software for wireless carriers
Pumatech (PUMA: news, msgs): Formerly Puma Technology. As a result of two acquisitions, ProxiNet and NetMind Technologies, Pumatech has Web-rendering, browsing, change-detection, notification and personalization technologies used to deliver Web content and e-commerce to the mobile marketplace.
Critical Path (CPTH: news, msgs): As the dominant provider of outsourced e-mails, the company is moving quickly to establish itself as the leader in messaging solutions for wireless devices. It recently struck a partnership with Aether Systems. Some believe instant messaging and e-mail will be the killer app on a mobile device.
According to Peter Friedland, a wireless analyst at W.R. Hambrecht, Phone.com currently trades at 30 times calendar 2001 sales of $229 million. This compares to an average price-to-2001-sales multiple of 50 times for its peer group, which includes Aether, 724 Solutions, Puma and InfoSpace.
Net wireless start-ups
According to Draper Fisher's Packard, the business models from the wireless start-ups run the "spectrum." The only business model he shys away from are advertising-supported models. "It's difficult to believe that someone would subject themselves to listen to ads," he said. Some companies that are ad-based include Buzme.com or EVoice.com.
Packard also believes that application providers, which is where the bulk of these new companies fall, will need ties with wireless carriers. "It's hard to do really creative applications over a network you don't control."
Many of the companies listed fall into the category of wireless application providers. These companies provide middleware software to mobilize Web-based content or are application service providers that mobilize content.
AvantGo: Filed on June 9 for an IPO led by Credit Suisse First Boston. Provides wireless data solutions that enable businesses to extend Internet, intranet, and extranet applications to handheld devices based on Palm and Windows CE operating systems.
OmniSky: Filed on June 16 for an IPO to be led by Credit Suisse First Boston. Wireless service provider for consumers and small to mid-sized businesses. Focused on PDA and larger form-factor devices. Has no current plans for phone handsets.
Evoke: Filed on Feb. 18 for an IPO to be led by Salomon Smith Barney. Provides mobile Web conferencing and talking e-mail technology.
AlterEgo: Redwood City, Calif.-based AlterEgo is a wireless infrastructure start-up with technology to adapt and deliver Net content, services and applications for mobile and other alternate Internet access devices. Focused on scalable, robust infrastructure. Has backing from major strategic angel investors.
Everypath: Mobilizes Net applications and content. EveryPath, in Santa Clara, Calif., pulls data off a company's Web site, unlike Aether which ties into a company's back-end. Has mobilized 30 sites, including E-Trade and Best Buy. W.R. Hambrecht's venture arm has invested in EveryPath.
LiveMind: San Francisco firm devoted to mobilizing e-commerce applications for merchants, wireless carriers and solution provides. Has received funding from Angel Investors L.P. and Technology Crossover Ventures.
Viafone: Devoted to specializing in mobilizing commerce applications for retailers, e-tailers or any form of corporate commerce. Has received funding from Draper Fisher Jurvetson. Based in Redwood City, Calif.
Quios: Aggregating a strong member-base of mobile users through instant messaging services based on short message service, or SMS. San Francisco company has backing from Draper Fisher Jurvetson.
Xypoint: Seattle provider of E-911 calls and location-based services.
Tellme: Mountain View, Calif. firm that provides access to Internet content, such as news, sports, weather, through any phone. Funded by Benchmark Capital, Kleiner Perkins, The Barksdale Group and Brad Silverberg of Ignition. AT&T invested $60 million for a minority stake.
Inidcast: Unlike Tellme, Indicast is focused on outsourcing the delivery of Internet content, such as news, sports, weather to any phone. It's based in Carlsbad, Calif.
Ignition Corp.: Bellevue, Wash. venture capital firm dedicated to wireless Internet. Holding company building a collection of affiliated companies for software, services and devices for mobile Internet users. The company is funded with $140 million from Qualcomm, Softbank Venture Capital and Madrona Venture Group.
Google: Popular consumer search engine recently launched a search service for wireless devices. Based in Mountain View, Calif. |
