The Mobile Bubble Is About To Burst

For the last year or so, I’ve been wondering how much of bubble the mobile content industry (apps, web, ads, etc) has been living in. I started my computing career in the early 90s, so I’ve lived through the original dot com bubble. I remember the days when doing simple HTML sites was considered "complex". And companies like Shopping.com were paying US Web amounts like $100,000 just to do a 10 page HTML work-up of a site idea.
Of course, later in the bubble when web applications began to take hold, ecommerce became the "big thing"… and the emergence of a reinvented EDI model redirected the industry’s focus bit. It went from content and browser/server applications to platforms where servers could talk to other servers using web protocols. And leverage not only the dedicated function of uniform services, but take advantage of a common business model as well–reducing costs for everyone. Ultimately, when a new and disruptive concept comes at the end of a bubbly cycle, I believe it causes the bubble to burst. Of course 9-11 and a down-market cycle didn’t help either. But you get the idea.
So, today I was reading about Glu Mobile announcing lower-than-expected earnings for Q308. Unlike the Web 1.0 burst, there are a lot fewer public companies–thanks to Sarbox and other regulatory policies. (How ironic, given the talk lately about not enough regulation). However, a down-market combined with the credit crisis is creating a similar effect as it did in 2001. What does this mean for mobile content companies? Well, we’ve seen a similar content push in the genesis of this industry (making stuff), followed by a "buying of apps and ringtones" cycle (ecommerce), and now we’re seeing a platform-ish phase where mobile ad companies are inserting themselves into the mix to help these companies monetize on a standard set of ads and formats.
Sound familiar at all? If you agree with my premise and listen to what Glu had to say, then one can easily deduce the mobile content industry bubble is about to burst. The question now becomes, how many business will be fail because of this burst? Do you believe the analysts’ predictions when they say, "The Mobile Advertising Industry will be worth _____ billion dollars in 20__"? If there are no content companies around to serve ads… and less ad platforms to provide ads… and less consumer spending to buy things… and less businesses advertising to get consumers to buy things… then this burst seems inevitable.
By Kevin Perkins






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