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3/26/2007
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Microsoft Brings Mercora's Social Radio To Phones

The deal means exposure to some 6 million to 8 million Windows Mobile users through Microsoft's Windows Mobile sites online.

Though widely reported to have been killed by video, the radio star lingers on, propped up by podcasts and Internet streaming, a shadow of its former self.

Now, perhaps encouraged by popular interest in Apple's iPhone as a music platform, radio is returning to the limelight, urged on by mobile carriers eager to find applications that justify the price of flat-rate data plans.

On Tuesday, the hope is that the radio star will get a much-needed boost by turning listeners into broadcasters. That's when Microsoft plans to announce a distribution deal to make Mercora's newly updated social radio service, Mercora M v2, available for Windows Mobile devices.

While the arrangement doesn't (yet) involve preloading Mercora on Windows Mobile phones, said Srivats Sampath, president and CEO of Mercora, it does mean exposure to some 6 million to 8 million Windows Mobile users through Microsoft's Windows Mobile sites online.

Mercora qualifies as social radio because it allows users to create playlists of songs from locally stored music and from songs streamed by other users, and then make those playlists available online for others. (Technically, Mercora's Internet streaming service isn't radio, although extending the service to wireless phones makes the term "radio" more apt.)

Mercora M v2 makes Mercora's form of radio available on 3G mobile phones, such as Edge, EV-DO, UMTS, HSDPA, Wi-Fi, and WiMax. Sampath says that by 2009, some 750 million 3G phones will have been shipped worldwide.

"A lot of people have said [M v2] feels and looks like an iPod inside my phone," said Sampath, who contends that Mercora on a Windows Mobile phone will let users access far more music than an Apple iPhone with limited on-board storage.

"Windows Mobile is designed so people can personalize their devices with applications that enhance their lifestyles," said John Dietz, group product manager at Microsoft Corp., in a statement "We're excited to see Mercora offer Windows Mobile users an additional way to access music and entertainment on the devices people rely on while on the go."

Indeed, consumer interest in mobile digital media has nowhere to go but up. Is anyone really listening to Internet radio over the phone? "Not that I'm hearing," said Forrester Research analyst James McQuivey.

Only about 11% of North American mobile phone users access the mobile Internet, said Charles Golvin, another Forrester analyst.

Noting that some 25% of North American online households listen to Internet radio (mostly infrequently) through their computers, Golvin said, "If people don't do it on their PCs, they're unlikely to do it on their phones."

On the other hand, Gartner expects the mobile music market to reach $32.2 billion by 2010. Streaming services will be some portion of that, along with ring tones and downloads.

Given that not every mobile phone user in the United States has a flat-rate data plan, listeners may prefer the sound of silence to the jingle of change trickling from their pockets. But Sampath argues that sooner or later, the cell phone will replace the portable music player. "We're seeing that happen in Europe and Asia," he said.

Curiously, the Microsoft-Mercora deal doesn't involve Microsoft's major music initiative, Zune. McQuivey doesn't see that as a significant issue. "Does that create conflicts for the consumer?" he asked. "Only to the extent that there are enough consumers that are aware of Zune."

Editor's note: This story was altered on March 29 to replace a quote from one Microsoft executive with the statement from John Dietz.

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