Engage Spins Out Carrier-Based Wireless Marketing Firm

A new company launched Tuesday aims to help wireless carriers tap into mobile Web marketing — and its founders aren’t the only ones betting on its success.

Avesair, Inc., said it plans to develop technology to enable wireless carriers to handle their own content offerings and to deliver advertising and marketing messages to consumers. It will be aided in that effort through close ties with ad server and technology player Engage.

Research Triangle Park, NC-based Avesair actually grew out of CMGI-owned Engage. Following talks with Nokia Venture Partners about a possible wireless joint venture, Engage spun out a portion of its software division, including employees who had worked on the initial AdManager ad-serving software acquired from Accipiter last year. Avesair’s president, Kimo Kong, previously served as a general manager of the division.

The close ties between the companies don’t end there. Andover, Mass.-based Engage will provide the ad and content-management technology to Avesair, it holds a minority equity position in the venture, and it will receive an ongoing revenue stream from the deal, although exact figures were not disclosed.

“Our role in Avesair and our joining with Nokia Venture Partners represents a key strategy for Engage going forward,” said Engage president and chief executive officer Tony Nuzzo. “We will continue to look for relationships with major companies, and exciting new companies, that will enable us to accelerate our proven marketing solutions into new markets such as wireless.”

Avesair also received an initial round of $16 million in funding from lead investor Nokia and New York-based wireless VC group New Things.

Built on Engage’s AdManager, Avesair’s system enables wireless carriers to create user communities for themselves — as opposed to those centered around content publishers. Engage’s AdManager will handle targeting, reporting and optimization for Avesair’s telecom clients’ advertisers. Eventually, Avesair said its product portfolio will expand to include personalized content and promotions.

While Engage will benefit from a successful Avesair, the company desperately needs a victory soon to boost its sagging valuation in the public markets. Shares of ENGA are lingering below the $1 mark, a situation that, if not corrected soon, could result in delisting from the NASDAQ exchange, making it even harder for the company to raise capital.

And with Engage’s recent news of a wider-than-expected first-quarter loss and continued shortcomings in revenue, its future viability could depend on eking out revenue streams other than online media, currently it’s chief source of income.

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