AltX-listed Huge Group has secured a majority stake in local mobile advertising start-up Eyeballs Mobile Advertising, based in Cape Town.
Huge announced yesterday afternoon that it has raised its investment stake in Eyeballs from 25% to 77%, for an undisclosed amount. Huge purchased its first stake in Eyeballs in March 2008.
Anton Potgieter, executive chairman of Huge Group, says: “We are extremely happy with this latest transaction, which solidifies our holding in Eyeballs, and will justify our giving proper attention to the strategic development of the business of this subsidiary going forward.
“The potential upside of Eyeballs is immense, and the mobile advertising revolution, which has been predicted to be the next big thing after social networking, has not yet even begun.”
The company's product, Eyeballs Paybacks, is a mobile advertising platform that is downloaded free onto a cellphone. Users can then select what type of advertising they are interested in and each time they view an advert, they receive points (each Payback equivalent to 1c) which can be redeemed in the form of electronic prepaid airtime or Mxit Moola.
Looking to Web 2.0
Potgieter says Huge Group expects to see Eyeballs begin to deliver strong returns in the next year from the Eyeballs Paybacks product. Potgieter believes mobile advertising, using a rich and interactive Web 2.0 platform, is the future of mobile advertising.
“We believe in the company and the product. Nobody has got mobile advertising right yet and we believe it is the right vehicle to do that. We predict there will be a big uptake in this type of advertising. This is more interactive than what we've seen in the past. It adds to the mobile experience as opposed to clogging up your browser.”
He points out that Huge Group's recent failure to acquire iTalk Cellular has opened other acquisition opportunities. “We are very excited about how the development of Eyeballs has progressed and we want to drive the company forward.”
However, Pogieter notes that acquiring 100% of Eyeballs is not on the cards because Huge does not want to take away the remaining stake from the owner.
Steven Ambrose, World Wide Worx analyst, says it's still early days for the mobile advertising reward system, but the technology does have potential.
“Mobile advertising is growing quickly and will become more relevant, especially in the current economic climate. The whole mobile advertising industry is changing so dynamically. People are seeing online mobile advertising as the new media and as a lower cost form of advertising.”
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