More Realism on Walled Gardens

In a refreshing move, Verizon Wireless and other wireless carriers seem to be moving away from exclusive reliance on walled garden business models for content. Instead of forcing users to buy from the branded portals, carriers now seem to be edging more in the direction of allowing third party content providers to sell direct.

Verizon has signed agreements with several companies that sell games, ringtones and other mobile content, including VeriSign Inc.'s Jamster, Fox Mobile Entertainment's Mobizzo and Yahoo Inc. Analysts estimate Verizon's slice of revenue is about 30 percent on such deals.

Cingular Wireless has been on the third party route for about two years, and now has 46 percent mobile-content market share, says The Yankee Group.

The Yankee Group estimates U.S. mobile content sales will reach $11 billion by 2010. It isn't yet clear how much will come from video. We probably will be surprised by the ultimate shape of the demand curve, as we were surprised by SMS success.