US wireless communications giant Qualcomm has bought Irish mobile software firm Xiam for US$32bn.
Xiam specialises in delivering content personalisation and recommendations applications for mobile operators. Its MPOS (My Personal Offers System) enables mobile users to receive personalised offers of new and relevant content via wireless and internet. MPOS allows mobile operators to leverage demographic, contextual and behavioural profiling to deliver personalised mobile advertising.
Qualcomm plans to continue to offer MPOS as a standalone product through Xiam as a wholly owned subsidiary. It also intends to offer the targeting technology as part of its core solutions and products to present operators and brands with powerful subscriber intelligence and personalisation tools that help spur wireless data growth.
Last year, Qualcomm signed a deal to license Xiam’s products for integration in its own content management systems.
“As we worked with Xiam more closely, we saw the true value of personalised recommendations and personalised advertising. We felt it was very strategic not only to what we were doing in Qualcomm Information Systems but even strategic to other service businesses we were looking at. That’s what led us to the acquisition,” Mitch Oliver, vice-president of solutions and marketing at Qualcomm Internet Services, told Siliconrepublic.com.
“The rationale from our perspective for the acquisition is it enables us to very quickly get this technology into the hands of a far greater number of mobile phone companies, people who already have existing relationships with Qualcomm,” said Colm Healy, CEO, Xiam. “We anticipate this will dramatically grow the scale of our business and we anticipate that as the business expands the people needed to support it will grow.”
This is Qualcomm Internet Services’ third acquisition in Europe and the company intends to leverage the engineering expertise at Xiam to develop new products in the future.
The mobile advertising sector is estimated to grow in value to over US$11bn by 2011. Oliver said effective marketing will be driven by personalised services.
“We can’t just clone the advertising and recommendations experience that now exists on the internet due to the small screen and the low processing power of cell phones today. That will turn into the equivalent of a spam experience for the consumer.
“When we looked at Xiam, we were really impressed with how they do personalisation of their recommendations and targeting of their ads so they’re much more in tune with what the consumer expects to see and so are much more useful. You can place a small banner ad and it is more likely to be something the consumer will be interested in, instead of trying to lower four or five ads on to that small piece of real estate.”
Asked whether operators will use mobile advertising as an opt-in feature or use it to offset call costs as part of a price plan, Healy said a variety of approaches will be taken.
“Operators have lots of different approaches in how they generate opportunities for advertisers to target their customers. Our technology ensures that when they have those opportunities, they are maximised. They can offer customers things that are likely to be of interest to them and not an irritation to them.”
The US$32m acquisition will not affect Qualcomm’s earnings per share in 2008, the company said.
Xiam was founded in 2004 and funded with venture capital from Delta Partners and Enterprise Ireland. It currently employs 30 people in its Dublin office.
Qualcomm employs approximately 12,500 people worldwide.
By Niall Byrne