What to do with a people-powered, user-generated index of the world out there? Follow in Google’s footsteps and sell advertising on top of it.

As I wrote in my last post, GyPSii has cleverly harnessed PlaceMe, a primary function of GyPSii that allows you to create a point of interest (POI), add your content (image, video, audio, text), add your current or last geo-location, categorize/tag/describe the POI, and submit to the server in real time to a personal or publicly designated folder in your MyPlaces (your record of points of interest).

To get this to Google scale, GyPSii needs a lot of people out there indexing the world with their mobile phones. It’s an ambitious strategy, but not far-fetched. Dan’s forecast models tell him that a company with 7 million users, each doing 2 PlaceMes a month would produce an index in the first year that would be “significantly larger than the Google file system in its first year.” (Dan expects GyPSii to be on “between 80 and 100 million devices in the coming 12 months.”)

There are no stats on active users as a percentage of that total. But GyPSii members tend to be hyperactive when it comes to PlaceMe, creating and tagging “15-20 PlaceMes per month.” Every time GyPSii members do that, they are adding a new indexed item to what the company calls the Osmotic File System (OFS).

Where does mobile advertising come in? It’s already work in progress in China. In fact, GyPSii has a lot of progress to report in China – period. As Dan sees it: “To have an ad-based model, you have to have an audience.” To reach more members (and encourage them to index the world around them) GyPSii’s has this week launched the Java version of its application, with both Chinese and English language support.

The expectation, according to the press release, is that the new app will “appeal to the 70 percent of the 650 million phone owners in China who own Java-based phones.” By way of background, GyPSii is already locally available in China for the major operators China Mobile and China Unicom, for download on compatible Java phones.   GyPSii is also available globally across a wide range of devices, including Samsung, Nokia, LG, Apple iPhone, and BlackBerry smartphones.

How does GyPSii plan to make the jump from critical mass to relevant advertising? What is the rev share model for partners (handset makers and carriers) who get on board? And what is the experience for members that use the ExploreMe function to search the world around them (and so trigger the delivery of an ad on their mobile device)? These are just a few of the questions I explored with Dan in this final segment of our podcast interview. (It’s a little longer than my usual interviews, but I felt detail was necessary to fully understand the interplay between search and advertising GyPSii-style.

Listen to the podcast here. [20:27]

Excerpts from the interview:

PEOPLE-POWERED SEARCH: Dan is a great believer (as I am) in social search on mobile. As he pus it: “This is the ultimate user generated content business model ever.” With patented technology in place (as part of the PlaceMe function), the next step is scale. “It’s got to be at scale because if our goal is to build that index, we’ve got to get lots of people to use the app.” Downloading is only part of it. Bundling is the business model that drives results.

WATERFALL MODEL: This model sits at the core of how GyPSii does deals and shares the money. “It starts with OEM manufacturers, and then to ODM manufacturers. So we go and get bundle relationships with them to get on-deck.” After GyPSii seals the deals to be on the phones, “the water falls, [and] the next layer is the carrier layer.”  Then, as you begin to get scale, you use something like Open Experience, the API, to further connect all of the social networks.” And what do handset makers get? Future revenue. As Dan puts it: “If you’re a phone manufacturer, for example, once you sell your phone, it’s a done deal. You have to make a new one and sell it.  We’ve got a business model that enables a phone to be an annuity generating device for a manufacturer, and that’s all the downstream advertising that results out of any given phone. So, that way, every device they make is an investment in a future revenue stream.”

MOBILITY AD DELIVERY: “In selecting GyPSii, they’ve not just selected this app to be bundled; they’ve selected the whole GyPSii back- end system, which also is a contextual search and add delivery system.  So, strategically we’ve been selected for mobility based advertising delivery by some of the world’s largest manufacturers and I think that’s kind of a strategic place to be because they believe in this vision….They understand mobility, [and] they don’t appreciate a top-down play from other companies coming in trying to do a land grab on their customer base.”

ADVERTISING EXPERIENCE: It’s a lot like the mobile search we know, except the index is created by people and the ads – well – don’t look like ads. It all starts with a function called ExploreMe. From the website: “ExploreMe allows you to find places by keyword, category, proximity based across the general public, by your friends in your social network, or limited to your own personal points of interest. The resultant places allow you to see full context of photos, video, audio, text and ratings by the owners, contact the owner of the place (dependent on user settings), allow you to map the place, and with navigation allow you to get to the place.” Essentially, ExploreMe is what Dan calls the first step in “planet search or experience search.” You get search results and ads that are sold into that index in the same way that ads are sold into the Google index.  How do the ads look? A lot like content. But you could also get a coupon. No matter what you get, when you make a selection it triggers an advertising-based transaction – and a pay-off to the handset manufacturer.

MORE THAN MOBILES: Who said mobile advertising has to be delivered to mobile phones? GyPSii’s goal is to be on every device out there. “That’s not just phones, it’s also netbooks. We’ve got a relationship with Intel; we’ve been selected as part of their reference platform for all mobile Internet devices and netbooks.  There are other ways to be mobile besides just your phone, so every mobile device that has an ability to be connected to the Internet, we want to be on.”

MOBILE ANALYTICS: Advertising on a social network (as I have pointed out in my recent release white paper Mobile Advertising For the Masses, sponsored by Bango, which you can download here) provides brands access to key data, such as gender, preference, and whatever else members are willing to share. “For privacy reasons, [GyPSii analytics] will never say who a person is or anything else, but it will report things like gender, age, what other social networks that person is in. Think of a 3-D cluster map of the kind of people that are interested in that product, it helps them [advertisers] in real-time know where they should place their ads.” The feedback loop is simple: “We’ll help them know more about who’s interested in their products.”

WHAT’S NEXT?: “We’ve been in hunting mode and now we go into gathering mode.  So, where are we going? We’re going to continue to hunt relentlessly.  We will not yield until we sign every major OEM and ODM and carrier in the world – that’s hunting.” Execution goes hand-in-hand with innovation. We spoke shortly before the iPhone app launch, which Dan explains in the interview. Beyond that, we can look for a “release schedule that enhances that new user experience on all the other devices we’ve got.” Finally, GyPSii will expand what it calls the GyPSiiPlex, “all the data centers around the world adding capacity and fine tuning our algorithms.” (Dan calls the company’s core algorithm PlaceRank, a word play on PageRank.)

My take: My own mobile advertising research for a variety of projects including Mobile Advertising Research U.K., and MSG’s own publication/online resource MobiAD World Focus, brings me in contact with C-Level executives from a mix of mobile operators, agencies, brands, ad networks, and enablers. The questions on the top of the list: What is the value chain and who are the mouths we have to feed? The advance of companies like GyPSii tells us two things: We have to re-think how we define mobile advertising (Is it about brand message? Or is the end-game for advertisers simply the chance to communicate with social networks like GyPSii?), and the value chain we assume is coming together to deliver it.

Clearly, mobile social networks are making the shift from meeting place to market place, and having search and advertising baked in (in addition to all its other features/functionality) has earned GyPSii a prime position in the emerging mobile search and advertising business ecosystem.

Special thanks (again) to GyPSii for hosting my podcast until I can upload my content to the cloud and make it available to MSG readers via iTunes. It’s work in progress and coming soon!

In the next podcast, I look at a new app store approach from Bytemobile. For background I will also feature the video in the video player in the MSG sidebar.

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Disclaimer: Bango is an MSG supporter.

I’m also pleased to report that the interest in my series of mobile advertising white papers is going strong. While I’ve just wrapped up Vol 2, my earlier white paper (Mobile Advertising For Newbies) will soon be making the rounds as part of a package of audio-visual presentations on mobile advertising produced by Henry Stewart Talks, a company committed to providing access to world class seminars by leading thinkers and authorities from around the globe in one online resource. The company commissioned me to summarize the findings of my first white paper and so educate the market about the pivotal role of mobile analytics in all we do. The more digital we become, the more the data matters…

Location is another topic high on my agenda, so I am looking forward to a F2F meeting/podcast with Dan Harple, who is responsible for leadership, and strategic and operational growth at GyPSii, a super-cool company leading the race to deliver us mobile experiences that combine information, entertainment, social networks, and location/navigation. A passion for multimedia, real-time interactive communications, collaboration, and social media runs through Dan’s bio like a leitmotif.

Prior to joining GyPSii he was Founder, Chairman, and CEO of Context Media, Inc., an enterprise software firm that was acquired by Oracle. Before that, his efforts centered on media research in Context Labs, a company he co-founded with Artist and Producer Todd Rundgren. Cool!

If you want to know more about the company and its future roadmap, then click on the screen in the MSG video player and watch the interview I did with Shane Lennon, Vice President, Marketing & Product Development, during Mobile World Congress. It’s the video interview I chose to showcase this week, and you can read more in my column for bnetTV’s weekly newsletter here.

Today marks the debut of these new segments on the MSG video jukebox (located in the right-hand sidebar). This week’s focus, and feature video in the player, is my interview with Shane Lennon, Senior Vice President, Marketing & Product Development at GyPSii, a must-watch company leading in the race to deliver connected and cool experiences combining information, entertainment, social networks,  and location/navigation. In our interview we connect the dots in the recent string of announcements and discuss the significance for brands and advertisers.

By way of background, I have followed the company – which is a business unit of GeoCentric, a company that provides a geo-integration platform for mobile phones, personal navigation devices, web browsers, and Internet-connected devices, including PCs and set-top boxes – since it broke on the scene last year. Unlike many companies that focus on social networking or enable location-relevant mobile marketing, GyPSii stands out as a company that connects people to people, places, and stuff across all platforms, devices and networks.

Indeed, it’s the raft of announcements over the last weeks — including a partnership to embed GyPSii’s app on a range of LG mobile phones; the tie-up with Nokia and RIM (blackberry) to make the app available on a wide variety of their devices; and a wise decision launch an open API (allowing partners to call the shots on how they integrate GyPSii into their mobile strategy and devices) – that speaks volumes about the company’s new and stronger focus. My take: GyPSii has both the ideas and the impetus to impact our mobile lifestyles.

In addition to the interview and my analysis (below), I also encourage you to read more about GyPSii in my regular column for the bnetTV newsletter, which counts some 10,000 readers. For all my coverage and columns in one place, check out this page on the bnetTV site dedicated to MSG news and views. Thanks again to bnetTV’s Michelle and Tony Sklar for promoting MSG to their growing audience of  industry executives and professionals, and to Nicole Scott for bringing it all together in some great brainstorming sessions!

An excerpt from my weekly column:

Web 2.0 was all about the tools and technologies allowing users to freely create, share, and connect around content with members of a larger mobile community; Web 3.0 places location at the core of this exchange, empowering users to make their experiences personal, relevant, and much more compelling.

The jury is out on whether location – on its own – is a service consumers will pay for. But there is no question that location brings value to a variety of everyday mobile experiences, ranging from social networking to mobile search/shopping services,  to more relevant and engaging mobile marketing campaigns. Indeed, the race is on to offer connected and cool experiences combining information, entertainment, social networks and location/navigation. And companies that deliver products and services that connect people to places and networks, from work to play to home,  across all platforms, devices and networks, will likely lead the pack.

GyPSii stands out as a company that covers all the bases with a suite of applications that seamlessly combine location, social networking, search, and Web 2.0 technologies. I caught up with Shane Lennon, GyPSii Senior Vice President, Marketing & Product Development, during Mobile World Congress to connect the dots in the recent string of announcements and discuss the significance for brands and advertisers. We covered all the key questions, and then some. A special highlight: An explanation of GyPSii’s Open Experience API (called OEx).

Unlike other mobile social networking platforms such as Facebook, which offer a subset of desktop functionality, GyPSii has effectively given its partners the last word in how GyPSii is integrated into their devices and apps – and how much of the functionality they want in the first place. Put another way, GyPSii allows its partners to do more than location-enable/community-enable their apps and devices; it gives them control of the UI and with it the user experience they deliver to their customer base. Partners can integrate anything from a single app (create a piece of geo-tagged content) to a feature (find a friend) to full-blown social network.

By way of background, features/services include: User-Gen Content (create and share geo-tagged content); Friends (create and manage relationships with GyPSii members); Explore (find places, people and stuff nearby); Communication (keep in touch using messages, email and more); Profile (tell the community who you are and what you’re doing/feeling); and Advertising (integrating GyPSii’s location-based and contextually-tuned advertising service). To round out the offer, partners leverage GyPSii’s infrastructure to get streamline delivery of services to their customers.

As Shane put it: “We decided to have a next-generation approach to [mobile phone] client development….As we looked beyond smartphones it became clear to us that taking our user interface and jamming down into a Java enabled platform or WAP-like [platform] wasn’t going to work.” The way for this to succeed is to take a more embedded client approach, which is why GyPSii’s strategy is focused on embedding GyPSii on as many devices as possible, where the actual user experience (via the UI) is owned by the customer/partner company. (GyPSii’s platform is device and network agnostic, and works across iPhone, Symbian, BlackBerry, Windows Mobile, and Web-based operating systems.)

A big part of GyPSii plans going forward is focused on mobile advertising. And with good reason since the disconnect between mobile advertising efforts and results is a growing cause for concern. Predictably, the lack of real mobile marketing success stories reduces the enthusiasm of major brands to invest in mobile advertising in the first place. And around we go. But it’s more than a catch-22 for advertisers and carriers. It’s a vicious cycle that threatens the health of the global mobile business ecosystem if we consider that the vast majority of content companies, app store developers, and mobile carriers have already bet the farm on the uptake of mobile services increasingly subsidized by mobile advertising.

Against this backdrop, GyPSii has purposely made Advertising a central focus of its OEx API, beefing up the offer with a location-specific targeting capability and the ability to deliver an integrated advertising experience/message across devices and platforms – even  gaming consoles in the future. (Makes good sense given the perfect fit between games, location, and community…)

We wrapped up the interview with an interesting look at the future of content types and what might evolve from experiences that bring together information, entertainment, social networks, location/navigation, advertising, and search on all devices everywhere. It’s early days, but GyPSii is beginning to break down the content and comments it sees into its smallest components, allowing it to recognize the associations and relationships between the content and the context. “When someone looks for something or wants it [relevant information] in a mini-feed, we want to make sure it is relevant and [fits] in the context of their world.”

The right content to the right person at the right time and in-tune with their lifestyle/life stage? It’s a challenge. However, GyPSii has the capabilities (information, entertainment, social networks, location/navigation, advertising, and search) and mindset (open APIs and a sharp focus on the user experience) that may get us there.

MSG is also proud to partner with bnetTV to conduct studio interviews with an exciting line-up of companies including AdMob, BuddyMob, BuzzCity,Gigafone, Gracenote, GyPSii, JumpTap, MCN, Mob4Hire, Movius, and VISTO. The finished segments will showcase on MSG (in the customized video player in the right-hand corner), so please check back regularly. You can also look for event coverage – as well as my regular columns – on this special Events page bnetTV created exclusively for MSG.

Which brings me to this week’s column and focus on Motricity, a provider of mobile data solutions and services, ranging from mobile portals and storefronts, to messaging aggregation, to a slew of mobile operators and content providers, including AT&T, Verizon Wireless, T-Mobile, Alltel, TracFone Wireless, PlayPhone, CNN, FOX News, A&E, and Condé Nast. The company had a banner year in 2008. It achieved over $100 million in revenue, exceeded acquisition integration targets, expanded customer relationships, and delivered over 11.5 billion pageviews across all deployments of its mCore Platform. (Over the past year, Motricity reports mobile Internet access has grown 45 percent, a sure sign that mobile data services are gaining serious traction.)

But the real news is mobile marketing, a sector Ryan Wuerch, Motricity Chairman and CEO, tells me is poised for impressive growth.

During a recent interview with bnetTV, Ryan identified three key drivers behind this trend: The advance of the mobile Web, the arrival of handsets such as the Apple iPhone that deliver a satisfactory end-user experience, and the increasing recognition among mobile operators, agencies, brands, and content companies that advertising is content, and should therefore be customized (translated: targeted) to individual consumers based on factors such as profile, preference, and permission.

Put simply, plain-vanilla mobile content tailored to mass-market tastes doesn’t cut it. It’s about delivering personalized, compelling experiences to consumers in order to increase data usage, ARPU, and brand recognition. As Ryan put it: “Content providers and brands are looking to leverage the data, intelligence and connectivity of the carriers in order to offer a personalized, relevant solution to consumers.”

Another shift transforming the mobile marketplace: The emergence of the open mobile Web and truly open models that blur the boundaries between on-portal and off-portal (on-deck and off-deck). In Ryan’s view, its “one multi-channel content marketplace” with the mobile phone – a device with features and functionality including a personal navigation system, a barcode scanner, a camera, a radio, a walkie-talkie, a TV, an electronic programming guide, a remote control, a digital music player, a photo album, and an archive – at its center. Operators and brands are more closely aligned in their strategies to encourage mobile advertising and Motricity is more sharply focused on “being in the center of the mobile ecosystem for the movement of content and data” between all the parties involved.

My take: There can be only one business model. OPEN. Ryan believes players up and down the value chain will ultimately embrace the open strategy. Why? Because inclusive is better than exclusive, particularly when the end-game is about forging partnerships that will grow the pie for everyone.

Ironically, this is also the message of my own white paper, sponsored by Motricity and slated for release in the next weeks. Aptly titled ‘There Can Be Only One,’ the white paper demonstrates the business benefits of a comprehensive, all-inclusive federated mobile search strategy that meets user demand for choice by combining results from storefronts, the Internet and the mobile Web. I argue that such a strategy creates a new and robust ecosystem and firmly places mobile operators at its center. More may be better, but open is always best.

Look for the white paper available for free download via MSearchGroove.

Disclaimer: Motricity is an MSG supporter.