Mobixell buys Web firm 724 Solutions

Mobixell Networks, an Israeli provider of multimedia and advertising solutions for cellphones, has acquired the U.S. mobile Internet company 724 Solutions for cash and shares. While financial details were not disclosed, the deal is apparently in the tens of millions of dollars, surmise industry sources. 724 has about 100 employees.

Both companies sell technology to improve data transmission over cellular networks, making it easier to access Internet content by cellphone. Their clients are cellular service provision companies. 724's technology deals with the transmission of browser-based content and e-mail. Mobixell targets multimedia content such as video and images.

The management of the merged company intends to forge a sprawling entity with local sales and support branches in the U.S., UK, China, Switzerland, India, Israel and other countries. Its customer base will have more than 350 mobile operators worldwide, including Verizon, Vodafone and China Mobile.

Mobixell CEO Amir Aharoni, who will lead the merged firm, says Mobixell's sales amounted to $20 million in 2009. "We want to create a company that can reach sales of $50 million a year, an opportunity to profit from the growing revenues from data transmission," he said.

"The recent explosion in mobile data offers a challenge and an opportunity for mobile operators. A challenge in terms of optimizing the usage level for bandwidth-hungry applications, such as rich-media and video, but more importantly an opportunity to capitalize on the growing revenue potential of mobile data and compensate for the reduction in voice revenues," Aharoni said. "The combination of expertise and technology between Mobixell and 724 Solutions uniquely positions us to tackle this issue and allow mobile operators to improve the return on their infrastructure investment in the burgeoning mobile Internet traffic, expected by industry specialists to grow 66 fold by 2013."

Mobixell notes the increasing popularity of mobile media devices consuming content, from laptops to smart phones and iPhones. It adds that it will continue to work with OEM channels and system integrators such as IBM, Motorola, Alcatel-Lucent, Huawei, Ericsson, Comverse and others.

To date Mobixell has raised $29 million, mainly from Apax, Intel Capital and the German venture capital fund SMAC. The company has about 100 employees in Israel and will continue to operate from here, Aharoni says.