Today we can see businesses using SMS for different purposes - marketing, notification, news, text to win campaigns and so on. In those cases usually SMS is a small part of a big project. However, there are plenty of businesses where SMS is in the middle of the business case and sometimes gives the competitive advantage. I will introduce four innovative SMS-based business cases that have been extremely successful in Nordics during the past years.

1. SMS-auction

An SMS-auction is where user’s text in a bid for an advertised item. The system can be set for “highest bid wins” or “lowest unique bid wins” mode. Either way, the user receives a reply message acknowledging the bid and advising them of its position. There are different variations on that business model, which all have their own advantages. Get a general idea of SMS-auctions.
* Bimbaso is a good sample of lowest unique bid auction
* sms2bid is an Australian version of highest bid auction
* Sendioksjon is an Estonian neat version of SMS-auction, where every SMS increases the price per 0,006 EUR and extends the auction by 2,5 minutes. Last person who sends the message gets the product.

2. SMS-loan

It is probably the most profitable SMS-based business, which has also raised some ethical issues. Many countries have already regulated their market for SMS-loans and some countries are doing it right now. Business case is simple - give out loans for small sums with big interests in a really quick and easy to use way. Before creating your own SMS-loan office, read those two stories as well: SMS-loan sharking and loanshark 2.0.

3. Browser based games

Browser based games are quite popular among youth. Believe me, there are plenty of people who want to do something besides shooting someone or playing flash games. Business case here is this - if you want to get advantage over other players, use paid services. Get cool widgets, more money, fame, train yourself etc. Many Fortumo clients have said that for micro-payments SMS is the best one. Every player has a mobile phone these days and they are using it impulsively.

4. Social Networks

Who isn’t a member of some social network nowadays. Some of them have a strong business case behind the solution; some of them don’t have a business case at all. Smaller local social networks have solved it really easily. There are 5 simple steps:
1. you have a social network where people love to spend their time
2. think what could be the extra feature for what users are willing to pay small sums
3. monetize these features with SMS
4. let people know about new opportunities
5. start earning revenue even while you are sleeping

Some things that have been monetized: sending presents, changing the background theme of your profile, getting fame, giving higher points to users, highlight your account/ad/picture etc.

Today, when credit card frauds have increased significantly and even moved to social networks like Orkut, it is wise to consider extra payment forms. It all depends on the service you are running, but the overall trend shows that people are thinking seriously before they are providing credit card data. Obviously it is difficult to substitute credit cards, but it is possible to give people alternative payment forms. People who tend to be suspicious or recently read about credit card frauds would like to use something more secure or at least something that seems more secure to them.

For smaller payments I would suggest SMS-billing as an alternative. It has its own disadvantages, but studies have shown that people sense it as secure, anonymous and easy to use payment method.

Here are some points why web based company should consider SMS-billing:

• almost everybody can use it - over 95% of people in most of the developing and developed countries carry a mobile phone,
• people can use it despite the location or time,
• you are able to target young people and reach those who don’t have a credit card,
• people are using it impulsively - SMS-payment is simple and doesn’t take time,
• smaller prices drive people to consume more,
• no chargebacks - people don’t have to worry that something extra is taken from them,
• it supplements the existing revenue stream - our experience with web based companies have shown that while integrating SMS-billing as an extra option, revenues have increased,
• people sense it as more secure measure, because they don’t have to share their personal data.

Usually people picture SMS-services as part of web 2.0 or just web based solutions, but actually it is just one side of the SMS-services. Since the number of mobile devices in increasing all the time, SMS-billing has become a value adding solution. Cell phones are always with people and that is why people can pay for park, pay in shops, order a lightening to ski-track etc all the time notwithstanding how much cash does they have in their wallet.

Finns have came out with a great idea (read a whole article). From January people who are driving along highway 1 can open public toilets by sending a SMS. They explained that as a result of continued and endemic vandalism, the Finnish Road Administration has developed a system which allows travellers to open the doors to roadside toilets only by sending a SMS message to the number given by the Road Administration. So if you want to smash the toilet you’ll have to pay for that, the best part is that it is also possible to find out who as behind the vandalism. But if it was me I would use prepaid card

A few days ago social networking site Facebook announced mobile extension to its popular developer platform. Great move, as mobile is definitely where things are going these days. However, it seems that it’s not very stable yet, and they have rushed a bit to get this news out.

In addition to showing snippets of information on the Facebook mobile page (m.facebook.com), application developers could use the API to add SMS interaction to their applications. SMS is great for allowing instant communication with the users wherever they are. However, it has also proved of being one of the most accessible and convenient ways to collect micropayments from users. There are several success stories of social networking sites in Europe, that have made fortunes using one or two simple premium SMS services neatly tied to the otherwise free website. For example, you can make your photo appear on the front page for some time, by sending premium SMS costing let’s say €1. This amount is then added to your phone bill and mobile operator is sharing the revenue with the website.

Eric Eldon from VentureBeat wrote:

Mobile apps may be a good way to monetize, though, Shen [RockYou co-founder Jia Shen] tells us: “Lots of people are thinking about how to run micropayments through phone bills” as high schoolers don’t have access to credit cards for doing things like buying Facebook’s virtual gifts.

At its current version though, Facebook Mobile API does not seem to support premium priced SMS, nor do they share any revenue with application developers, but I’m sure they’re thinking about it. As contextual advertising does not work, I think that SMS could become one of the easiest ways to monetize Facebook apps.

I was surfing around other day and found an interesting startup called trutap. Usually all the fancy apps and innovative solutions are for wider audience, but actually they are only available in bigger countries like US, UK, Germany etc. Cool is that people for example in Malta can also easily use tartup. Trutap should be available in 210 countries across the world at the moment.

Trutap is a free mobile service that combines all the elements of people’s social life into one application. With trutap users can connect and converse with friends and family, wherever they are, whenever they want. Users have the ability to use IM, group message, upload text and pictures to blogs and send pictures via a mobile phone. It leaves all the the doors open for the future, i wonder when will we reach to the point where there isn’t any difference whether you are talking to a person face to face or via computer, cell or with something else. At the moment tartap is in closed beta, so it is possible to show your interest and maybe they will let you in.

What is trutap?

* Combines all elements of your social life into one application, for the first time
* Offers the ability to IM (MSN, Yahoo!, AIM (AOL) and ICQ), group message, upload text and pictures to blogs and send pictures via a mobile
* Instant Messenger (IM) - access all accounts and converse with everyone at the same time
* Blog and Photo Sharing - supports Blogger, Blog.com, Livejournal, Flickr, Friendster, Xanga and others so text and pictures can be uploaded
* Messaging - picture messaging, online status and group message with ALL-Reply functionality
* No need for special configuration and easy to download
* trutap offers privacy - restrict access and even block users
* trutap will also be available via a web browser from a computer shortly
* trutap is free, fun and it works. Go on, you know you want it!

Google launched AdSense for mobile 7 months later than Yahoo! its mobile display ad system for its Mobile Web service. When Yahoo! started with 19 countries Google replied with six fewer, they are offering AdSense for Mobile in 13 countries: US, England, France, Italy, Germany, Spain, Ireland, Russia, Netherlands, Australia, India, China, and Japan (available in the coming weeks).

It was just a matter of time when AdSense was developed for mobiles. Since there are about 6.6 billion people in the world and about half that many mobile phone subscriptions and there are currently more mobile devices worldwide than personal computers and televisions combined so it could be a promised land for Google. But the best part is that ad blocking on mobile handsets isn’t an issue. No worries it will be pretty soon.

Google’s ability to profit from mobile advertising will depend largely on how much it knows about those viewing its mobile ads and the extent to which it can convert that knowledge into ad targeting data. While telecom companies typically know a great deal about their subscribers, they tend not to share that information without compensation, if at all. That leaves Google to either make deals with telecom partners or to deepen its own data about those using its services both on the Internet and mobile devices.

We will see how it goes, meanwhile you can keep an eye on AdSence blog.

Payforit is the name of the new UK mobile payment service, started jointly (1st of September) by Vodafone, Orange, 3, T-Mobile and 02.

The scheme standardizes the way phones can be used to make payments so the process is the same no matter which operator a customer has signed up for or which handset they are using.

Mike Short, chairman of the Mobile Data Association explained that PayForIt is for those customers who have not felt comfortable with mobile transactions or payments. So it is so called mark of quality, whenever customer is paying for goods with PayForIt he/she will see an information screen that lays out what they have bought, who it has been bought from and how much it will cost and customers can be sure they haven’t been tricked.

The Trusted Mobile Payment Framework allows customers to buy goods and services from content retailer and charge the cost to their mobile phone account, which is operated by customers mobile operator.Content retailer will use the service of payment service provider to facilitate a cost effective cross operator charging mechanism that is described below in the diagram.

How to use it

First, you need to read the terms and conditions that come up on screen. After that, here’s how it works:

*Customer goes to a website on phone and wants to buy a ringtone or something else. A button on the screen will say either ‘Buy’ or ‘Pay’.
* Next step takes customer to the Payforit page where he/she gets details like price, links to terms and conditions and a helpline number. When customer subscribe to a service, it also tells how often the customer has to pay.
* Customer can still change his/her mind - just have to press ‘Cancel’.
* Customer gets the ring tone. Payforit applies the cost to his/her next phone bill (or takes it out of customer’s Pay as you Go account

The framework has even made success and failure screens compulsory and fixed a lot of other things. To get a thorough view about the conditions have a look at the scheme rules. It seems to me that fixed conditions to all of the content provider will improve the quality in deed. Customers can always be sure when dealing with PayFotIt everything is honest and clear. In the worst scenario they have only one thing to blame and it makes things much more easier.

When time passes it gets harder to draw a straight line between different
communication channels. The borders were a bit hazy but Yahoo! managed to make
it quite blurry.

According to press release Yahoo Mail service, allows users to send real-time messages to
wireless handsets in the United States, Canada, India and the Philippines via
the IM platform. Users can also send instant messages from Yahoo’s e-mail
program to Yahoo Messenger and Windows Live Messenger. The service is free of
charge to the Yahoo user.

This solution gives a lot of opportunities for interesting services, it is
difficult to predict how crazy things can go, i hope that we don’t have to
integrate spam filter to our cellphones.
But i sincerely hope that google will somehow response to it and rest of the
world will also be able to benefits from this solution.