Mobile social networking firms fight for pocket space

In fact, carrier relationships may actually be a disservice to the customer, as they often breed exclusivity, Aldort said. Rather than a proprietary agreement, she said the key to success for mobile social networking companies is a global presence – across carriers, handsets and across the world. “A community is only as valuable as its size,” she said.

AirG’s Ghahramani agreed that scale is the first and foremost priority of mobile social networking companies. As he said, these communities are all about meeting new people and making interesting friends, and no one wants to go to a nightclub or bar with no one it. It doesn’t matter how nice the upholstery or the furniture is. That doesn’t mean scale is an easy goal to accomplish, however.

“Because of the fragmentation in the mobile world, we’ve built up this network globally, and that has been the hardest part – really weaving together across technologies and then across all the different networks globally to get that scale,” Ghahramani said.

One market sector that believes strongly in the market’s potential to scale is venture capitalists. Upwards of 100 of these start-ups are backed by some form of investors. Just last month, Juice Wireless, maker of the mobile community JuiceCaster, received its latest round of $6 million in funding. Yet despite the capital flowing in, the return on investment is not a guarantee. Most operator revenue, about 80%, still comes from voice.

“The wireless carriers are really going to have to chase after every revenue stream they possibly can with mobile social networking,” Aldort said. “We’ve done a rough back-of-the-napkin estimate on what revenues the carriers sort of brought in with mobile social networking, and we had that approaching $600 million, so it’s a pretty small market at this time.”

The majority of this $600 million was from monthly subscription services – a $2.99 per customer per month revenue stream that may become void as more services become lumped in to the monthly data plan of the carrier. If this proves to be the case, advertising-based business models – a format Ghahramani said AirG is experimenting with – may become more of the norm. From his perspective as a software company, regardless of the means of achieving profitability, the mobile market has the potential to be a multimillion-dollar enterprise.

“In our software world, this is going to be as big as games, if not bigger,” Ghahramani said. “In many networks, it is already bigger than games, so the potential is definitely there. For carriers, the potential is there, but it might not be as big of a level of materiality. It might just be another application.”

Ghahramani is not alone in his optimism. Many in the industry – analysts, vendors and carriers alike – are quick to jump on the mobile social networking bandwagon. It’s an undeniably popular topic right now, and most are hopeful there’s potential to take social networks on the go. Why is this? Aldort said it might just be because they don’t know any better yet.

“It is a very sexy and hot topic, and it’s hard to ignore all the relative success that social networking has had in the fixed Internet world,” Aldort said. “It is a very mainstream concept; it just hasn’t translated well over to the mobile phone at this point.”