Interview: Lucy Hood, President, Fox Mobile; Stratton Sclavos, CEO, VeriSign
The announcement of a News Corp.-VeriSign Jamba joint venture left a lot of questions unanswered. We can fill in some of the blanks now thanks to a joint interview with Stratton Sclavos, CEO of VeriSign and Lucy Hood, president of Fox Mobile Entertainment. Hood will become CEO of Jamba when the deal closes; Sclavos was in her office on Maple Drive this afternoon.
Why a joint venture? Hood: What we’re all very excited about is designing the world’s first vertically integrated mobile entertainment company. You’ve got content and marketing and product integration in terms of advertising and so on from News Corp. VeriSign stands for technological excellence and Jamba is a great example of that, a platform that delivers content to 30 countries in languages that reach a billion people. Sclavos: We also believe this is the start of what’s going to be a great collaboration, many more new products and many more new opportunities are going to be in the future and we both have a lot to bring as a partner. We’ve worked long and hard on this and we’ve known each other for some time. …
Would you have been able to sell Jamba as a whole? Sclavos: Certainly. We had several other offers to do that; we were not interested. We really wanted to develop the integrated approach to the market and have what we believe was the strongest partner in the space given the assets that News Corp. is launching right now.
You had a vision for the company when you acquired it (in 2004) and things didn’t quite pan out… what will make this better for Jamba than the past couple of years have been? Sclavos: I think as Peter Chernin has said, News Corp. has a relentless focus on the consumer and they have great content creation, they have great ability to build brands and capture customer loyalty. Those were not strengths of the VeriSign corporation. We bring … the technology and the infrastructure and the ability to have the global footprint to deliver all these new and interesting ways and all these new handsets. If you put it together, it’s a pretty interesting combination.
You still see a lot of potential and a lot of growth in the market? Sclavos: I think what people have to remember is we’re only a couple of years into this and our expectation is most of the opportunity is ahead of us and probably for the next decade or so. Think of what’s going to happen on the network … with devices, and how entertainment on these devices is really going to be probably the main driver of what people use their mobile devices for. We think this is a pretty exciting time to have a front seat.
How was the value arrived at? Sclavos: There were many tangibles and intangibles … including News Corp.’s ability to bring additional value to the relationship through their content like The Simpsons and their other properties like MySpace … Certainly the financial piece had both some amount of traditional external metrics as well as what we believe were the intangible assets.
How is this going to set up? What brands survive? Does Fox Mobile disappear? Hood: The new company will combine Jamba, Fox Mobile Entertainment and Mobizzo. Obviously, what we would do is migrate all the Mobizzo content to the Jamba and Jamster portals. That’s how we’ll approach the branding. We’re working on developing areas like MySpace. We actually have Simpson’s content ready to go so that will be a very exciting launch, which you’ll see on a global basis.
A lot of people don’t understand the relationship between Fox Mobile Entertainment and FIM. Can you explain a little bit? Hood: Fox has three digital verticals: Fox Interactive Media headed by Ross Levinsohn; Pay TV/VOD headed by Pete Levinsohn and then I oversee Fox Mobile Entertainment. First of all, we’ve collaborated for years and we have more meetings together than we do apart because clearly you’re seeing a lot of convergence in this world. At the same time, my group has a laser focus on the mobile market and the way we describe that is reaching subscribers through carriers around the world. Since there are two billion of them, we think it’s a pretty sizeable market. … You’ll see specific collaborations, like the fact that Jamba will be MySpace’s m-commerce partner. Exclusively. … Any kind of content you want to get via your MySpace page on your mobile phone — and there’s quite a lot of it — will be sold through our platform.
Stratton, was that one of the appeals to you? The ability to tap right away into this large marketplace that Fox Interactive has developed? Sclavos: Of course it was. … First of all, it’s the pre-eminent community-based site and for the demographic that is going to be the mainstream demographic for mobile entertainment, they are today on MySpace … They are doing new things every day, they’re including things like user-generated content … I think that their expertise here and the community that they’re continuing to build, especially now that they’ve started to roll it our internationally, it’s really one of the most significant things we are hoping to learn from them.
You mentioned keeping Jamster and Jamba? How do you have those two co-exist? Will it be Jamster for the U.S., Jamba everywhere else? Hood: Jamba is one of the most recognized brand names in Europe. In countries like Germany and The Netherlands, it’s got 99 percent brand awareness so that’s very powerful. We also happen to really like the name Jamster, which is the English-language brand for Jamba. We’re strategizing and planning how these will roll out in the future. You’ve got two very strong brand names and that’s a great asset to bring to a partnership.
You were very excited about Mobizzo and the prospects for that? What happened? Hood: What happened is m-commerce is still in its early stages. We created a lot of good content for Mobizzo; Family Guy sold extraordinarily well. Our original product line did extremely well as well. But we really wanted to roll out faster on a global basis and, let’s face it, we were in one territory and Jamba is in 30. We wanted to be across multiple continents now.
If you hadn’t done this acquisition, would you have been in the position of deciding whether or not Mobizzo continues to exist? Hood: No. … The company’s very committed to building a direct-to-consumer business in the mobile sector … We’ve just accelerated our activities with this partnership with VeriSign.
More acquisitions coming from the JV or are you going to work with what you have for now? Sclavos: I think we should close the venture first. I think we both believe it’s a huge opportunity and the partnership gives us a platform to do great things.