Sprint buys Kansas City-based social media company Handmark
05/19/2013 11:59 PM
05/19/2013 11:59 PM
Cellphone giant Sprint Nextel Corp. has bought a small innovative Kansas City company with an eye on collecting lots of advertising revenues.
The deal to buy Handmark Inc., which owns social media app maker OneLouder, is expected to be formally announced today. Augie Grasis, who founded Handmark 13 years ago, declined to provide the amount Sprint paid in the cash sale.
“This is a proof point that you can build a successful tech company in Kansas City,” Grasis said.
The purchase, which was completed last month, follows years of collaboration between the starkly different-sized companies. Sprint, based in Overland Park, employs 39,000, and Handmark has 40 employees in downtown Kansas City, plus 10 in Dallas.
Handmark was launched in an era when pocket technology revolved around personal data assistants such as Palm Pilots. Handmark brought popular games like Tetris to these devices by selling game CDs through Best Buy and other retailers.
The company built one of the first mobile app stores and created Pocket Express, an early app showing news, weather and sports. It partnered with Sprint, which preloaded both on customers’ cellphones.
As the mobile world grew, Handmark innovated further.
Its 2011 launch of OneLouder, led by Evan Conway, latched onto the soaring popularity of social media. OneLouder’s TweetCaster app, for example, helps mobile device users interact on Twitter and manage its content. OneLouder also developed the CBS Sports app.
The deal reflects well on Kansas City’s entrepreneurial community in the age of technology, Grasis said. Other area tech companies with growing track records include Front Flip, Leap2, EyeVerify, Pollenware and RareWire.
Sprint said it will keep Handmark and OneLouder in their downtown Kansas City offices, leave Conway in charge and hope to grow its employee count.
“We have a global opportunity for us, and it’s really being powered by bringing together two Kansas City companies,” said Kevin McGinnis, Sprint’s vice president of product platforms and services.
The opportunity lies in mobile advertising, something both businesses have been working on in recent years.
For example, consumers can buy OneLouder apps, download them to their phones and use them. Or they can grab them for free in exchange for letting OneLouder show them advertising.
OneLouder has built relationships with multiple advertising networks that sell mobile ads.
Sprint, too, had been working on a small scale with mobile ads until October, when it started Pinsight Media +. That venture allows advertisers to target ads. The ads smartphone customers would see would depend on their own activity on the device that revealed a potential interest or connection to an advertiser’s product.
Pinsight Media delivers targeted ads only if the consumer opts in. Otherwise the ads shown are broad-based.
The deal to fold Handmark and OneLouder into Sprint seeks to boost the amount of advertising revenue beyond what each might gather separately.
Sprint’s 55 million subscribers become a potential new audience for OneLouder’s apps. Pinsight Media’s ability to target ads also means a lot.
“To serve up more relevant ads at more relevant times to customers is the holy grail for a company like us,” Grasis said.
Sprint’s mobile ad effort will benefit because OneLouder’s social media apps are used frequently throughout the day, providing a strong audience to offer mobile advertisers. OneLouder’s dealings with multiple ad networks also gives Sprint’s ad targeting venture a better way to “get the right ad in the right spot,” McGinnis said.
“The point of the acquisition was to accelerate growth in what we believe will be a big revenue opportunity,” McGinnis said.