Mobile World Congress (#mwc10) was a great trip last week. One thing was crystal clear mobile everything (networking gear, operators, developers, devices, and services) is all about applications. In previous years Mobile World Congress was about the mobile Internet, but this year it was all about apps.

This is why it’s exciting to see Millennial Media buy up a small startup in the analytic space. This past week Millennial Media announced the acquisition of a small analytics startup in San Francisco called TapMetrics.

Over the past 6 months the big firms Google and Apple have picked up two of the top mobile ad companies – Google bought AdMob and Apple bought Quattro. Now Millennial Media stands alone in the market as the largest independent company serving ads on mobile devices.

Mobile developers must ask themselves when evaluating advertising platforms “does the network have distribution that monetizes”? If the answer is yes then it’s a green light.

Great Move For Application Developers

In a smart move Millennial Media buys a small innovative company in TapMetrics, and pushes forward with a key asset and platform for developers so that Millennial’s massive reach can be harnessed by developers.

Another great reason this deal makes sense is that after Google and Apple there are dozens of firms with no mobile ad solution. This makes Millennial Media  “the store” for mobile advertising (pun intended).

As an independent company Millennial Media becomes the trusted neutral (non-biased) provider for developers across a huge distribution base of mobile partners who Millennial currently work with. Now developers don’t have to rely solely on either Google and/or Apple only to ensure critical mass distribution and monetization.  This clearly puts Millennial Media in the big three of mobile players – Google, Apple, and Millennial. With Millennial being the only independent. This kind of choice only benefits the market.

As part of the acquisition Millennial Media will offer TapMetrics analytics data and tools to developers and publishers of the mobile apps in the Millennial large and growing network. Millennial Media’s data will track, profile, list usage, engagement, and other relevant information that benefit both the developer and the consumer.

Data = Better User Experience; Better User Experience = Monetization

As we’ve been saying at SiliconAngle for over a year now, data is becoming the most important thing for developers and now for advertisers especially in mobile. Data drives a better user experience and a better user experience drive monetization. Data and data analysis is at the heart of this value proposition.

Look at the search industry in say Google. Having access to data enabled Google to build a quality search product and ad network.  With Google constantly iterating their data quality they were able to consistently build better algorithms to present users with a compelling search product.

In mobile and smartphones search doesn’t really work like on the wbe due to the screen size and real time nature of mobility. So display advertising hold the best seat at the table with respect to the search opportunity on mobile.  The display ad and applications will be the vehicle where innovation (e.g. like search in late 90s) around consumer experience will occur.

The result for consumers will look like some automated cloud service that will do most of the work and then just show up in the display of the smartphone.

Data Innovation Cycle – SmartPhones Enabled This Phenomenon

With the creation of the iPhone the industry is seeing massive change.  A paradigm that I haven’t seen since the disruption of the browser.  I expect to see some major game changing user experiences over the next 10 years.  I call it the mobile innovation cycle – enabled by Apple’s iPhone a few years ago.

My analogy:  What the iPhone will do for mobile today is what the original Macintosh did for computing back in 1984- change the game in terms of user expectations around the required experience.

Below is an illustration of what is happening.  Rapid innovation around applications that is spawn new data.  This new data is the powerful new disruptor or Data Is The New Developer Kit of which I’ve written in the past many times.  How developers leverage data will determine how to make their applications more successful.

How they iterate the data feedback cycle is key.   I call it the Mobile Application Innovation Cycle.

The iPhone (now Android) kicked off a massive development boom for applications in this case millions of apps. So what we have here is a “long tail” of applications. These long tail apps are creating a data tsunami and this data is very valuable. The opportunity is to make sense of the data and move that back through to the apps and the consumer. This cycle is very rapid and will create an opportunity for platforms that can leverage the data to provide a better user experience.

This is new data never seen before so it’s a big opportunity.

This is what is compelling about Millennial’s acquisition of TapMetrics. Millennial now can leverage the data and combine their data to provide developers with more data to innovate on top of.  Data is the development kit.  Millennial Media’s leadership position in the display mobile ad market gives them a beachhead for developers to leverage with applications.

The future is not about low CPM-based display, but instead using that display reach and real estate to provide a better user experience both in terms of reach and data. In this use case (which will be the case trust me) the developers win and Millennial will get a cut of that revenue for providing the reach (distribution) and data (monetization enablement).

At the end of the day for mobile ad provider or developer whoever can: 1) reduce the steps to finding content, 2) make the mobile web easier to use, and 3) save the consumer time will be the massive success story of the mobile web.

These three things (reducing steps, making it easier, and saving time) will drive consumer adoption and create massive growth and revenue opportunities for the companies making it happen.

Millennial Media’s analytic capability will make their distribution and monetization capabilities more powerful. It’s a win for developers and consumers.