News Corp has reportedly shelled out $187.5m to buy 51% in Jamba (Jamster in the US), the mobile phone ringtone company who came to prominence with the Crazy Frog ringtone.
What!, was the cry around the Digital-Lifestyles offfices. How much …. and for what?
Many had the same reaction when Murdoch bought MySpace for $580m a year ago. These same people had to quickly readjust their view as member accounts rose to 100m and they signed a deal with Google that brought in $900m.
Here’s a few of our theories as to why they might have splashed so much cash on this.
News Corp are very gun-ho about content to mobile … well actually all platforms now. It may be that they hoping to buy large amounts of Jamba’s already-paying customers. We saw Jamba at IFA in Berlin (where they’re based) and the stand was indeed filled with eager young-things, trying to look cool, in their self concious way – ideal clients for content.
The WSJ is reporting initial offerings are expected to be ringtones, wallpaper and short clips from the popular Fox animated series The Simpsons.
With this purchase, you could assume that News Corp want to move into this space very quickly, as building an infrastructure to deliver content to mobiles isn’t exactly beyond the realms of achievability. Jamba obviously have a lot of expertise in delivering content, primarily ringtones, to mobile phones.
Verisign bought Jamba for $266m in 2004 at the height of the Crazy Frog promotion. We thought at the time it was a very strange fit for a company that provides services.