The deal announced this week for News Corp to acquire the remainder of Jamba from Verisign, makes good on a long term investment in mobile content.
Back in 2004 VeriSign spent $270 million acquiring one of the most promising mobile content businesses with interests in mobile applications, games, ringtones and wallpapers, at the time it was said to be operating in 40 countries worldwide, but today it is closer to 25. Among other things Jamba is responsible for the most irritating ringtone in the world, known under the name of the Crazy Frog, and it has offices in the US (where it trades as Jamster), Berlin, Germany, the UK and China. The company also sells insurance for mobile phones and runs online gaming and online dating sites.
It came out of a period when hundreds of VCs chased the mobile content business, and is one of very few that scaled. This week News Corp paid a further $200 million to Verisign to take complete control. There were various put and call options built into the original contract, up to $350 million if Versign sold the remainder as far out as 2012 and revenues at Jamba, although not broken out are thought to be in the $100s of millions.
News Corp has been in control of Jamba since the deal to buy over half of it was struck in November 2006 and has combined it with its Fox Mobile Entertainment unit. News Corp rarely makes a financial move without both commitment and heavy investment, and has already released MySpace Mobile Store where Jamba has become MySpace’s global m-commerce partner. News Corp originally paid $188 million for its controlling stake.
Every one of the major US broadcasters now has a strong mobile offering, but this is mostly made up of a mobile streamed video bouquet, and few of them have games, gaming and ringtones like Fox.
VeriSign’s Digital Content Services, which provides infrastructure and connectivity for rich mobile content is likely to continue delivering the Jamba offerings. Verisign said early this year that it would exit all businesses that it considered non-core.