By KRISTI ESSICK
Special to THE WALL STREET JOURNAL EUROPE
November 28, 2003

Search the pockets of a connected technophile, and you'll probably find a snazzy multimedia phone -- and a few wadded-up scraps of paper with notes scribbled on them.

Mobile gadgets are great, but most people haven't completely given up on Post-it notes and printouts, especially when they're on the move. After all, it's much easier to jot down the address of a restaurant than to enter it via your mobile-phone keypad, or to print out a map from the Internet than to search for it through a WAP portal.

PocketThis Inc. wants to get rid of the paper for good. The company's technology allows users to send information from Web sites and their desktops to their mobile phones, where it is stored in a special folder called a “pocket.” The idea is to make information found on the Web or stored on a PC -- including addresses, phone numbers, train departure times and real-estate listings -- portable.

“We stepped away from technology and looked at what people did to take information with them,” says PocketThis CEO Nancy Benovich Gilby. Some people are adept at downloading and entering information into their PDAs, but the majority still write simple things on a piece of paper, she says. “In 99% of the cases, those bits of paper hold addresses, phone numbers or shopping lists,” says Ms. Gilby.

Founded in 1999 by Ms. Gilby, John McNulty, Jay Sullivan and Jonathan Sheena -- who together had previously created and sold Firefly Network Inc. to Microsoft Corp. -- PocketThis was one a stampede of start-ups to predict the Internet would move away from the desktop and onto the mobile phone. But instead of thinking of a mobile phone as a miniature browser, the PocketThis team realized tiny devices weren't cut out for Web searching. Instead, people would continue to use their PCs and the Internet at work and at home, but would want to take select bits of information with them on the move.

Taking Action

Using your mobile as a storage device for bits of information is great for users, but not all that profitable for telecom operators, which need to drive mobile data traffic and transactions in the face of shrinking voice revenues. So the PocketThis technology goes a step further than just being a high-tech Post-it. When a user hits a “Send to mobile” button on a Web site, PocketThis' application, stored on the operators' network, notices what information has been selected and proposes “actions” that users could take around this information.

For example, if a user sends a classified ad for a used car to his mobile via the “pocketed” AutoTrader.com site, he would receive not only the ad, but also a few choices such as “find similar cars for sale” or “see a consumer review of this car.” If the person acts on these suggestions -- and PocketThis claims the average mobile user takes six actions per pocketed item -- he drives more data traffic on the operator's network.

“PocketThis allows users to act on the information stored in their pocket and that keeps our customers in the data space that much longer,” says Graham Cook, head of travel-life services at Orange SA, which began offering PocketThis 18 months ago in the U.K. and plans to roll it out in Belgium, the Netherlands, Denmark, France and Switzerland by the end of the year.

License Agreements

So far, PocketThis has signed license agreements with four mobile operators: Orange and O2 Ltd. in Europe and T-Mobile Inc. and Cingular Wireless LLC in the U.S. (If a person who is not a subscriber of one these operators sends information to his mobile via a pocketed Web site, he would receive it, but would not be offered further actions.)

The chance to suggest services based on information users have downloaded, instead of spamming subscribers with general offers, is what makes PocketThis so compelling to operators, says Rob Bamforth, a wireless analyst at Bloor Research Ltd., Bletchley, England. “PocketThis is like a sticky toffee in your pocket,” says Mr. Bamforth. “Operators can glue content and services onto data you have chosen.”

But it's not just operators who are set to profit from PocketThis, either. The Oakland, California-based company has distributed its free “send to my mobile” software, which was partly developed in London, to 350 European Web sites, including AutoTrader.com, Lastminute.com and Alitalia.com. These content and service providers are keen to reach customers via their mobile phones, and to keep them coming back.

“With PocketThis, we can drop offers into our customers' pockets and get them to enjoy more of our products,” says Dominic Cameron, director of voice at Lastminute.com, which deployed PocketThis a year ago on some areas of its site. “The actionable aspect is key to us.”

PocketThis is betting big on the European market. Back in 2000, when Ms. Gilby and her team were plotting the business plan for the company, they originally sought to work with U.S. Web sites. But it quickly became apparent the U.S. was years behind Europe in mobile awareness. Across the Atlantic, however, SMS messaging was taking off, and European telecom operators were poised to spend billions on 3G licenses to allow their mobile networks to carry data.

“The fact is, U.S. mobile start-ups need to look to Europe from the get-go,” says Greg Galanos, executive managing director of Mobius Venture Capital, one of PocketThis' venture-capital backers. “It was a risky bet, but one PocketThis had to take.”

PocketThis still has to turn its innovative idea into profits. The company's business model currently relies mostly on the sale of software licenses to operators, but sharing revenues with operators and content providers is the ultimate goal. When a person takes an action on pocketed data, such as downloading a restaurant review, the operator charges a fee that shows up on the user's phone bill. The content provider that provided the restaurant review gets part of this fee back, while PocketThis takes another chunk.

Sounds easy, but the revenue-sharing model isn't without pitfalls. First, everyone wants a piece of the growing data revenue pie, and operators are often loath to share. In addition, it remains to be seen if mobile users will take to pay-per-use services, especially after dozens of transactions start showing up on their phone bills each month.

PocketThis also faces another challenge: potential competition. For the time being, the company has a unique offering, but an Israel-based company called mPrest Technologies Ltd. is developing a similar Web-to-phone application. So-called SMS aggregators, such as Paris-based Netsize SA and Mobileway Inc., based in London, aren't yet direct competitors, but their focus on boosting SMS traffic means they're playing in the same field.

Still, what sets PocketThis apart from the hordes of other wireless wizardry out there is that users actually use it.

“This is the only mobile data service I use,” says Jeff Tupholme, director of London-based consultancy Open Methods Ltd., who has been using PocketThis from his Orange phone for the last 18 months. “It's much better than printing out a map or an e-mail and taking it with you.”

-- Ms. Essick writes about technology from Paris.