Flurry Sees Analytics Opportunity in Blizzard of Mobile Apps

Anyone who owns an Apple iPhone knows a mobile phone isn’t just a phone anymore. It’s a music and video player, a Web-surfing device, and a video game system all in one.

Go to the iPhone App Store — an Apple Web site where iPhone owners can buy games such as “Moto Chaser” and “Are You Smarter Than a 5th Grader?” — and you’ll find hundreds of applications available for download.

The iPhone App Store isn’t the only game in town either. Google, BlackBerry maker Research In Motion and perhaps even Microsoft will soon have similar Web sites for new smartphones about to hit the market.

As more and more consumers download smartphone applications, it’s become increasingly vital for developers, phone makers and wireless carriers to have a deeper understanding of how customers interact with them.

That’s where a company like Flurry comes in. The San Francisco-based startup has developed software that gives demographic information about mobile application consumers.

“On the Internet today, Google Analytics gives advertisers a lot of demographic information,” Simon Khalaf, CEO of Flurry, told the E-Commerce Times. “Our software tells applications developers how often their apps are used, how much time is spent using them, the times of day they’re used, and where consumers come from on the Internet. It also monitors how their applications behave on certain handsets. For example, does a particular application send a lot of error messages?”

Early Days

Flurry started in 2005 offering three mobile applications — e-mail, a news reader and a group messaging application.

However, the company had trouble getting the big wireless carriers to pay attention to its offerings, so it had to reinvent itself, said Khalaf, who joined Flurry just four months ago. That’s when it decided to get into the mobile advertising business — a precursor to what it would do next with application developers.

“We didn’t have carrier support,” Khalaf said, “so we had to build our own mobile advertising platform and establish direct relationships with advertisers on our own.”

In addition to offering its free mobile applications, Flurry plans to sell mobile advertising via online ad networks and direct from companies. Its analytics software runs on its advertising platform. The software will remain in the test stage until the end of 2008, Khalaf said. [*Editor’s Note]

App Developers Hungry for Data

Flurry currently offers its analytics software free to developers participating in a private beta, and will continue making it available for free once it’s ready for the market in late 2008. The software is designed to work across multiple smartphone platforms, including the iPhone and Google’s highly anticipated Android phone. It also works on J2ME-based phones, which constitute the bulk of the cell phone market at this time. J2ME is a Java-based operating system that powers many mobile phone models.

“We target the app developers themselves, who can embed it into their software,” said Khalaf, a 42-year-old native of Beirut, Lebanon. Flurry has 11 employees and has raised US$3.7 million in venture capital from Draper Fisher Jurvetson of Menlo Park, Calif.

There is a strong demand for analytics software like that being tested by Flurry, said Charles Golvin, a wireless technology and market analyst at Forrester Research.

“There’s no question that app developers are hungry for this sort of information,” he told the E-Commerce Times. “Many already have the same kind of analysis built into the apps themselves. Once someone downloads an application, [the developers] will have all sorts of information about customer behavior.”

Flurry: Road Ahead

Flurry is seeking a second, $6 million round of venture capital, a process with which Khalaf is familiar. He started his first company, a corporate e-mail and messaging firm called “WorldTalk,” in 1992. Khalaf took WorldTalk public in 1996 before selling it to Tumbleweed for $480 million in 1999.

He is confident Flurry will be able to raise more capital.

“There is, in my opinion, a lot of money chasing very few good deals,” Khalaf said. “but I believe good deals will get funded.”

Flurry’s Competition

Flurry is not alone in the mobile analytics market. New York City-based Medialets and Hoboken, N.J.-based Pinch Media have similar offerings.

Like Khalaf, Medialets Chairman and CEO Eric Litman believes in the market for mobile applications and is tuned in to developers’ need to understand customer behavior.

“We know there is a need to empower developers to write better applications and provide marketers with the inputs they need to understand the value of reaching consumers on these new mobile platforms,” said Litman, a former Washington, D.C.-based venture capitalist who is funding Medialets with his own money.

Medialets appears to be moving at breakneck speed to deliver analytics capability to mobile applications developers. Founded in June, the seven-employee company went live 41 days later with its service. Today, Medialets has 300 iPhone developers and 50 Android developers on its analytics platform.

“It took an absolutely heroic effort, but we got it going,” Litman said.

*ECT News Network editor’s note: The original publication of this article stated that Flurry was selling mobile advertising. As of Oct. 21, 2008, the date for implementing the mobile advertising initiative had not yet been determined, according to the company.