Spanish-American recommendation engine provider MyStrands announced a $25 million funding deal. But the news is not is not so much the money; it’s more the increasing realization that mobile search alone may not be enough. In their quest to match the right content to the right users mobile operators and media companies are looking to recommendation engines to deliver content suggestions with a personal touch. Sensing business opportunities CBS recently snapped up Last.fm, Gracenote took its personalized music recommendations mobile and Qualcomm teamed up with Xiam. (I’ll have more on this exciting trend in my upcoming mobile search and content discovery report. Look for excerpts of this work in-progress on this site and the opportunity to co-create it with me.)

No wonder MyStrands has received a substantial amount of funding. I’ve followed the company closely since the start, attracted by its business model and its strategy to harness the wisdom of crowds to develop content recommendations. The approach overcomes many of the shortcomings of the plain-vanilla recommendations – that is, technology modeled on the approach of online bookseller Amazon to suggest content on the basis of the individual user’s past preferences or on the basis of what a user’s peers consumed, or both.

Put simply, MyStrands draws on the dynamics of social networks to develop what it calls a “social recommendation engine.” The company’s patented technology analyzes how people listen to and organize their music and learns from these patterns to suggest the right content to the right users in real-time. When enough users listen to a song A followed by a song B, then the MyStrands system concludes with certainty that the two songs are similar. Using this insight the system can further suggest tracks. The system also promote community by allowing users to see the listening patterns of friends as well as peers the recommender system has identified are a perfect match based on their music tastes and preferences. It’s easy to imagine where this intersects with mobile advertising – and why this plays a major role in the company’s future plans.

I had a pre-briefing with Atakan Cetinsoy, MyStrands VP of Business Products, to discuss the funding and the future roadmap. To be sure, the company, which has launched both Windows and Symbian versions of the player, is gearing up to announce some operator wins soon. “Operators are a big part of the equation” but so is their growing disillusionment with mobile search providers who claim they can do it all.

“A number of operators already have deals in place with the Google or other search providers that are just technology providers and not necessarily household names. So that is only one part of the equation and I do believe technologies like ours, as far as personalization goes, can add to the value of just plain search.”

Listen to the podcast here.

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All-in-one identity: The end-game is not only about playing matchmaker between the content and the individual user most likely to appreciate it; it’s about bringing together users’ profiles across all the platforms and devise they interact with on a daily basis. “This area is going to become even more of an area of focus for all search-related companies and, at one point in time down the road, I think there is definitely going to be some sort of convergence in which people’s profiles, their histories of past usage etc…will definitely be leveraged to bring better results for [better] search or for discovery.”

Competitive landscape: The space is crowding with a mix of pure-plays (Agent Arts, Purple Ace, Xiam etc…) and online music recommenders gone mobile (Gracenote, ChoiceStream and Real Networks – thanks to its recent acquisition of SonyNetServices, a company best known as the technology behind Vodafone’s Radio DJ services worldwide.) But not all are “content agnostic” and able to recommend any type of content, not just music. Search engine providers new to the party present both an opportunity and a threat. “I think there is definitely a place for pure plays in this area….The traditional search companies will show interest in it and I think that will keep going on being the case. But as far as being able to develop a technology that scalable and with serious intellectual property going into rather than being able to say, ‘Oh yeah, we also do recommendations, CheckMark’ ” Put another way, MyStrands keeps ” a close eye on pure-plays first and search companies second.”

The power of we: A lot of thought-provoking points in the podcast about the importance of each node in the network and the impact of the proper meta-data…Moving forward, signs are promising that the industry will grasp the value of each user and each user interaction. More importantly, the metrics will emerge to monetize this activity. “We will soon enough find ourselves in a situation where social networks won’t necessarily be looked at from a number of users perspective only. Many more user engagement related key performance indicators will be introduced to the system…. And we will not only be looking at the obvious but also the not so obvious metrics that actually tells us a little bit more about the quality of [the social] network.”

Rate and rant: User input is critical – the challenge is to create incentives for them to get involved in the first place. “A rating of a particular piece of content I have not yet listened to, for example is important and affects my experience [with the content] as well. [Encouraging users to get involved] is the only way we can cope with the content explosion problem.”

The road ahead: With funding from Spanish media mogul Antonio Asensio, owner and CEO of the Spanish media group Grupo Zeta, and existing investors Debaeque and Sequel under its belt, what is the next move? “Mobile advertising is definitely important for us because … we believe significant revenue streams can be generated from that. But, realistically, it is not something that will be a major revenue driver in the next six months or even potentially a year.” The main focus is extending the MyStrands platform to cope with content such as blogs and user-generated video. “We are also looking to add onto our platform a data point where potential partners can plug in their specific data sets, let’s say for video content, and create personalized user channels in which additional merchandizing and additional advertising opportunities can be created.” He added: It is almost more of a syndicated model than a standalone system that only relies on one single date source. So in this type of approach to personalization – the more information, the better.”

This entry was posted on Tuesday, June 19th, 2007 at 8:27 pm and is filed under Mobile Advertising, Mobile Music, Mobile Search, Podcasts, Recommendation, Web 2.0. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.