Airborne Entertainment to benefit from acquisition by Japanese suitor Cybird

Mobile phone content provider Airborne Entertainment has agreed to a $90-million acquisition by Japan-based Cybird Co. Ltd., a deal that was announced on June 21. Financial aspects aside, which were an important part of the deal for management and for the company’s venture capital partners, the deal-breaker, says company CEO Garner Bornstein, was that Cybird was going to allow Airborne to continuing operating as is. Airborne’s existing management team and staff won’t be changed as a result of the acquisition. Bornstein and president Andy Nulman will remain with the company. This element wasn’t to be underestimated, he says, because the company was at one point in discussions with four firms. "For us as management, what was truly important was that it was to be a company that saw synergy – the value in the management team – that was not going to break up the company and what was working well. That was a large part of why we decided to go into serious discussions with Cybird because we feel very good about them as a company and as a cultural fit, they are very similar to us," Bornstein tells Report on Wireless. Airborne will have the opportunity to explore the new Asian market opportunity, but that will be on a limited basis because of the cultural differences between the North American and Asian markets. The synergies from the acquisition were less about distributing existing products into Japan and more on learning about new technologies. "The real synergies (that we saw) were taking advantage of their technology to be able deliver products in new technologies as they’re developed here (in North America)," Bornstein explains. New delivery platforms and different forms of video and interactive features are just some of the technologies that Airborne will get an advanced look at. There are also other applications and technologies that can be exploited because of the high penetration of next-generation devices in the Japanese market. This will bring tremendous value to the company as it progresses under its new ownership, explains Bornstein. The Cybird acquisition of Airborne is just the latest in a number of key acquisitions in the North American mobile content market. Bornstein cites recent acquisitions made by Japan-based Index Corp. and Korea’s WiderThan. "What you’re seeing is that the countries where (mobile content) is most evolved see the potential of what’s happened there and they realize the massive potential of North America in this space and want to get in on the ground floor before the market becomes too mature," he says. While there has been an influx of Asian mobile content companies into the North American market, Bornstein says there are still a lot of domestically owned operations in the market. But he doesn’t discount the possibility of further acquisitions. "You’ve had most of the major acquisition from Japanese companies, but I don’t think they’re taking over the market. There are still major players owned by local players," he says. Mobile gaming increasingly important to content In a recent note, IRG Research indicated that there are three key drivers behind growth of the wireless content and applications market. "We believe subscriber growth, network deployments, and handset advances are going to help drive adoption of the next generation of wireless games and other multimedia content," reads the June 22 research brief. Singling out games, IRG says there is significant opportunity as mobile gaming is in early stages of high-growth adoption. "The market for mobile gaming has grown rapidly over the past several years, and we expect strong growth of this nascent market to continue for the foreseeable future…The number of wireless game downloads reaches 60 million in 2004, up 160.9% from 23 million in 2003. We forecast 84 million downloads in 2005, for year-over-year growth of 40%. By 2008, we expect the total number of wireless game downloads to reach 159 million, representing a CAGR (compound annual growth rate) of 42.7% between 2003 and 2008." Airborne is a mainstay in the North American mobile content industry having sold millions of games, ringtones, wallpapers and other entertainment applications. The company is known for having created mobile initiatives for brands such as MAXIM and Fox Television’s Family Guy, animated television program. The Montreal-based company is also improving in-house deployment capabilities, having inked an agreement with mobile content technology provider Tira Wireless, of Toronto. The deal allows Airborne to speed time to market and introduces cost savings for the mobile content company. Tira’s product suite automates the mobile content management process, helping to ensure a high quality, consistent and controlled deployment. It also automates the creation of "multiple builds" using a portable reference design.

Airborne Entertainment to benefit from acquisition by Japanese suitor Cybird

News | 06/29/2005 4:00 am EDT

To keep reading, get a free trial.

Already a Subscriber?

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us