Mobile search and advertising start-up JumpTap has received an additional $26 million in funding and has expanded its relationship with U.S. operator AT&T, the company said Tuesday.
JumpTap, based in Cambridge, Mass., provides search technology and advertising services for mobile operators such as AT&T and U.S. Cellular. The company also provides advertising for carriers and content owners such as NBC Universal and Fox Mobile.
JumpTap, which, competes against search and advertising heavyweights such as Google, Yahoo, and Microsoft. The new funding, which completes the company's fourth round of financing, brings its total cash raised to around $72 million.
AllianceBernstein led this round of funding. It also included funding from previous investors, including General Catalyst Partners, Summerhill Venture Partners, Redpoint Ventures, and Valhalla Partners.
The cash infusion will help the company continue to develop its technology and expand its sales force to take on the bigger players.
"It's really a David and Goliath story," said Paran Johar, chief marketing officer for the company. "And we aren't Goliath. It takes a lot of investment to compete against Google, Yahoo, and Microsoft."
But Johar believes that JumpTap is well-positioned to take on these big companies because it's not perceived as a threat by the mobile operators. The company has made significant inroads with operators around the world. It provides the technology and the operators are able to use the technology and integrate it as a "white label" solution into their own mobile platforms.
This approach differs from Google, Yahoo, and Microsoft, which all brand their mobile search platforms as their own.
It's still early days in the mobile search and advertising market. In fact, in 2007 the mobile advertising market was only worth $2.7 billion, according to eMarketer. That number is expected to jump to $4.8 billion in 2008 and could grow to more than $19 billion by 2012.
At this early stage in the game, operators are still trying to figure out which technology partners to work with. Last week, the Wall Street Journal reported that Verizon Wireless is in talks with Google. Exactly what the scope of the agreement will be is still uncertain. But it's believed that Verizon will likely embed Google's search tools in some of its phones. And it will likely strike some kind of advertising/revenue sharing agreement with the search giant.
But Johar believes that operators should be wary about working closely with Google. Mobile operators have a wealth of information about their subscribers that can be used to refine search queries and tailor advertising to individuals, making the search and advertising content more relevant to users. This is great for search companies and terrific for operators who will likely get a cut of the advertising revenue. But giving up that information to a Google, for example, could end up being an operator's biggest mistake.
"No matter how big a check someone like Google can write, they are a Trojan horse," Johar said. "If an operator shares all its customer information, it will allow someone like Google to come in and commoditize the most precious assets it has, which is all that customer data."
Johar argues that JumpTap's white label approach allows operators to retain control of their customer information while still being able to use advanced search and advertising technology to tap into targeted advertising.
AT&T, Verizon Wireless' largest rival in the mobile market, is already working with JumpTap. AT&T is also working with Yahoo, which sells a portion of the carrier's ad inventory. But now JumpTap is deepening its relationship with AT&T, Johar says. Previously, JumpTap only powered the carrier's on-deck search, but now it will be accessing AT&T customer information to help sell targeted advertising.
"Google may have a larger share of the overall search market," he said. "But the game is just beginning in mobile, and we're just starting to unlock the data to provide better and more targeted search and advertising. So I feel very good about our position in the market."