Industry Moves: Former Virgin And NBC Exec Turns VC To Search For Mobile Avertising Opportunities

Valhalla Partners, a Vienna, Va.-based venture firm with $440 million under management, announced today that it has hired Saj Cherian, a former executive from Virgin Mobile USA ( NYSE: VM) and NBC Universal ( NYSE: GE), as Principal to expand its focus on mobile investments. To date, JumpTap, the mobile search and advertising company, is Valhalla's one mobile investment. I talked with Cherian today to get a sense of what he was looking for in his new role, and how he sees the mobile content industry shaping up. At NBC Universal, he worked on business development and wireless strategy, where he focused on monetizing NBC's mobile properties through advertising, including banners, SMS, and some in-game advertising and video. At Virgin Mobile, he was director of new data services, where he worked on the prepaid carrier's mobile advertising strategy, which included launching its Sugar Mama campaign that allows people to watch ads in return for free voice minutes.

Excerpts from the interview:

The state of the mobile-content and advertising industry:"Consumers are tapped out on how much they are willing to spend in mobile, and then there are a lot of unlimited options that are capping their spend. The consumer wallet is tapped out, so you really have to dig into someone else's wallet and tap into the advertiser. That's an important area for the wireless industry to be focused on, but it's clearly not playing out as quickly as a lot of folks would like, and that's because there's too much friction in the marketplace. It's too hard to put advertising dollars to work."

On Sugar Mama's roots:"We started with our customers, and we engaged them in a dialogue. Our customers are very opinionated, which is good, so we asked them, 'how do you want to engage in brands?' They were pretty clear. One message we got was that they've been shouted to by brands my whole life, so it's got to be opt-in. Another was that my time is valuable, so you have to give me something if you want me to spend time with a brand, and since you are my wireless company, minutes is the currency. And, since you are Virgin, you should filter out the right content, and give me discounts, offers and sneak peaks of exclusive content."

On the definition of mobile advertising:Is it banners, text adds or something new?"I think it's both. On the one hand, you are going to see a lot of opportunities in SMS that we aren't paying a whole lot of attention to in the U.S., but you can look at Europe, where it's a lot more advanced. I think messaging is underfunded...There are going to be brands that can figure out that they can provide a service to a consumer, like for instance, an airline sponsors a service, where you can get all your flight info and check-in?all the types of stuff you want to do when you are in transit. The airline is providing a service, so is that mobile advertising? It's a branded user-experience, I think there will be brands that figure that piece out, they'll probably get a bigger bang for their money than buying a bunch of banners if they are providing utility to users. Is it a coupon? I hope it's something more. That's part of what we are trying to figure out."

Cherian's thoughts about leaving NBC before the Olympics and on Virgin Mobile buying Helio after the jump?

On leaving NBC before the Olympics:"That was a bummer. The whole company is mobilized for the Olympics, so that was hard to do, but the team at Valhalla is very exciting. I think the Olympics are important for two reasons from an ad perspective. Given the economic environment, the Olympics plus politics will keep ad dollars flowing in a challenging environment, and the second reason is that the Olympics will be across platform, not just in mobile. NBC will have something like 50 hours of video content a day that they are putting together. It's not possible for a consumer to view all that unless you have all four screens in front of you. There's a lot of platforms and experiments out there, so we'll have to sit back and when it's all said and done, we'll have to see what worked and why...I'm optimistic, but I am reserving judgment."

On leaving Virgin before it merged with Helio:"I think it [the merger] is exciting. There's a lot of things I wanted to do on the data side of the house, but we didn't have the R&D dollars for it. The nice thing with Helio is that it is coming packed with the R&D that was sourced by SK Telecom ( NYSE: SKM) in Korea. A lot of that platform is part of Helio, but the challenge they faced is that they forgot about distribution along the way. That's what Virgin got right. It's distribution, distribution and distribution. They thought their brands would carry the day, but if they [consumers] can't grab and go with your product, you are in trouble. I think it will be interesting to see how you bring together the high-end customer with Helio and the mass consumer with Virgin."