To fully understand the significance of Scanbuy’s decision, it’s important to review the events and announcements that have effectively dealt companies up and down the mobile barcode business ecosystem (Scanbuy included) a new hand of cards.

First came the decision in February by the United States Patent and Trademark Office to re-examine the patent claims filed by NeoMedia Technologies, a provider of barcode scanning solutions. The move prompted NeoMedia to push forward in March on a patent licensing program and tie up with other vendors (3GVision, Mobile Discovery, Mobile Tag, and NeuStar) in a pilot program based on open standards in a bid to show interoperability between the technologies out there and – more importantly – position NeuStar, a short code registry, as a central clearinghouse in the middle. More about this model and Jonathan’s own take in the podcast.

I appreciate that the barcode space is a tough one to navigate, which is why I also recommend this simple primer from Tim Green over at Mobile Entertainment.  Unfortunately, he wrote it before this flurry of activity.

So, what moved Scanbuy to open up the specs to the code that Jonathan stresses has been “labelled” proprietary (thus repeating the discussion around semantics that we began in this earlier interview on MSG)? At one level, it is a giant step toward building a viable ecosystem. But we can also read it as reaction to the pilot program (supported by players 3GVision, Mobile Discovery, Mobile Tag, NeoMedia, and NeuStar).

In response to my comment that NeuStar is clearly positioning itself to play the honest broker in a kind of hybrid model, Jonathan reminds me that Scanbuy can now also play the role of a trusted third party. “We don’t have a proprietary code or reader any more.” (Before Scanbuy’s wise decision to go open, other barcode companies could make a case that it was a closed shop with Scanbuy the only company that could both issue EZcode barcodes and decode them.) The argument from other vendors was that they didn’t have a choice because Scanbuy was the only company that could provide the technology, Jonathan explained. “But that now is off the table.”

NUTS & BOLTS: Scanbuy has committed to publishing the specifications for reading EZcodes, giving companies/developers the ability to create EZcodes. “So, a software company could create software for handsets which enables handsets to read those codes, and they could also create server side software which allows them to create the codes.” Plug-ins? They appear to be work in progress. “We’re looking at that; we made the announcement first. [As to] how we implement it, we’re looking at a lot of different tactics on how to release it and what the best way is.” De-coding? “Anybody who currently creates handset software to de-code barcodes could integrate these specifications into their current decoders.  So, 3GVision, for instance, who have software which de-codes QR and data matrix, could build in the functionality to also de-code EZcodes.

PROCEDURE & SUPPORT: For now, it’s all through Scanbuy. “Over the coming weeks they’ll be able to look at the specifications and create a platform which meets the specifications to create the codes on their own, if they want.” Meanwhile, Scanbuy is thinking through the details of offering support. “Support will probably not be free, however. So we’ll make the specifications free, support is probably going to cost.  What it’s going to cost, I’m not sure.”

OPEN STANDARD: Open is the direction the industry needs to go. While the pilot program, led by NeuStar, may be on the mark, Jonathan wonders whether it might not be too much, too soon. “Too many players, too early, can create too much competition and confusion in the market and it’s not necessarily a good thing.” As he puts it: “To have multiple players, you have to have multiple revenue opportunities for those players to be able to operate and compete, and it’s not clear right now what everybody’s revenue model is in that scenario.”

NEUSTAR: “We’ll see what happens over the next few months.  Obviously we are playing the most active role in the U.S. today as the only authorized code and the only authorized platform provider, so, we’re a major player in the space in the U.S. and we believe we’ll continue to be going forward.” (NeuStar has a strong focus on the U.S. market, thus Jonathan’s comments are limited to that geography.) Not satisfied, I put the question to him straight: What is Scanbuy’s position and will it participate in the pilot? “They [NeuStar] are positioning themselves as the clearing house which everything goes through. It’s not clear to us that they will play that role, so for us participating in the pilot at this point, we don’t know that it’s in our best interest to do that at this point [time].  We believe that if that is the final structure that the carriers decide is the best for the U.S. market, there will be a role for us to play. But it’s not clear. By no means is this the de facto structure for the U.S. market.”

DRIVERS: What is going to move barcode solutions out into mainstream mobile marketing and advertising campaigns? “This market will happen if readers are built into phones by the carriers, not by pushing downloads to consumers.” (By way of background, Scanbuy’s ScanLife handset application has already been pre-loaded on handsets from LG, Nokia, Samsung and Sony Ericsson, and been made compatible for mobile phones running on Google Android as well as BlackBerry, iPhone, Java, Symbian, and Windows Mobile.) “The carriers need to decide, OK, are we bundling readers on our phones or not? Sprint in the U.S. is about to start pre-loading our software on their phones, which is great news for the industry and for us.  But we need the others to get on board, and this has to become standard in every phone just as your Internet browser is that you use on your mobile device.”

EUROPE: Spain and Italy lead the pack – mainly because operators in these countries have chosen to pre-load readers on all their handsets. “What you’re starting to see [in Spain] is widespread code use. Marketers can go to several different campaign managers and get their codes, and they [the codes] will work across multiple operator platforms and handsets in the market.  If that’s the ecosystem that evolves, codes will be everywhere and they will be completely integrated into all marketing materials at all levels for marketers and media.”

DIRECT/INDIRECT MODELS: Which models are popular where? Japan has embraced a direct model (routing the user who scans the barcode directly to a site/destination). The trend in Western Europe, Latin America, and the U.S. is toward an indirect model, where scanning the barcode takes the user to a third-party server (where the site/action linked to a specific advertising campaign can be stored but also changed on the fly to freshen the sales pitch or simply point the user to a different site). “What you’re seeing in countries like Australia …is this hybrid approach where the campaign managers create a direct code that has a URL embedded in it, but that URL goes to their platform and the platform then tells it what URL to link to. So it’s a direct code but it goes through a campaign manager’s platform, not to the person who is putting the code out.” Could the U.S. adopt a similar model to make barcodes work? It could, provided that “code readers are ubiquitous on all phones; they read direct codes but the codes go to authorized campaign manager platforms.”

OUTLOOK: Is huge (!), but not all countries are moving at the same pace. “The markets where carriers and handset manufacturers are embracing it and getting phones into the market with software on them will take off the fastest.” In 2-3 years “codes will be everywhere in Spain and Italy.” In the U.S., the timeframe is “probably 3 to 4 years, and Latin America is probably 3 years.” Are we heading for a shake-in or shake-out? “From a competitive standpoint, I think you’re going to have major players in different geographies and the players in each geography will get stronger; there won’t be a lot of competition in each geography.” There may be a couple of players, but there are not going to be ten, for example. And this goes double for clearinghouses. “There aren’t going to be ten clearing houses in Spain or Italy or the U.S.

HOT TOPICS: In the U.S., it’s about “patent-related questions” and figuring out the right structure and ecosystem to take barcodes to the next level. In Europe it’s about growth – because the market is growing – and identifying the catalysts for even stronger growth. What’s next for Scanbuy? The excitement builds as the company nears the launch of two carriers in Spain, laying the groundwork for the first cross-carrier launch in Europe. “Spain will be the first country to actually launch and be operational with an interoperable system, and therefore our other markets around the globe, Latin America, US, Denmark, will be interoperable with those platforms so we’ll have a multi-country, 5 to 7 country interoperable system up and running in the next six weeks.”

My take: As I wrote earlier, the focus on open standards changes all the rules. The Scanbuy announcement signals a new chapter in the barcode industry (and a long overdue rethink on the part of Scanbuy). It also jumpstarts an equally overdue discussion around openness. But – as we know from similar discussions elsewhere in the telecoms and IT industries – there are different degrees and definitions of openness. How open is open and which open is best? The jury is out on that one.

In the meantime, there’s no overlooking the overlap between Scanbuy’s new push toward open standards and the progress of a pilot program (in which Scanbuy currently has little interest) aimed (likewise) at establishing open standards and a viable ecosystem. From my vantage point, the laundry list of fragmentation and intellectual property issues has yet to be satisfactorily resolved. But that’s not an excuse for not moving the market forward. Scanbuy’s decision marks real progress toward openness – and there is no turning back for anyone. Now all parties will have to walk the talk (and abandon the rhetoric we read across the blogosphere) if they want mobile advertisers to embed barcodes in their marketing strategies and not just dabble with one-off experiments.

Speaking of walk the talk, today Scanbuy’s EZ codes features on the cover BrandDigital: Simple Ways Top Brands Succeed in the Digital World, a business book by branding expert Allen Adamson. The 2D barcode on the back cover connects directly to the title’s page on Amazon’s mobile website, making this the first book to be sold in North America that includes an EZcode to sell the title via the mobile device. As Jonathan put in a statement: “This is a perfect example of how a 2D code placed on any physical media can send an interested shopper directly to a purchase opportunity. The mobile commerce experience has improved substantially over the past twelve to eighteen months, and we expect to see more of these applications in the future being initiated through our technology.”

This scenario also figures prominently in the Netsize Guide 2009, a 250-page mobile industry overview I wrote and offer for free download via a link on the homepage (sidebar).

Barcodes or visual search? Which technology approach will best link our virtual and physical worlds to support commerce? What do YOU think?

(I should mention at this juncture that the MSG global mobile industry research project and publication will feature a section on barcode companies and showcase successful mobile advertising campaigns. If you are a company in this space, or would like MSG to consider a mobile advertising campaign case study for inclusion in this work, then please contact me directly (peggy@msearchgroove.com).