The latest start-up to focus on helping iPhone game and app developers monetize is Medialets, which offers an ad network and analytics for iPhone apps. Like other companies, such as Greystripe, Admob, and Mobclix, Medialets is hoping to build a large chunk of its business by focusing on the iPhone.
Unlike Greystripe, however, the New York-based Medialets is not focusing solely on the iPhone; it’s also producing content for Google’s Android platform. Though not as popular as the Apple devices, the HTC Dream (G1) and its Android OS is the fourth most popular smartphone, generating 2% of all US requests.
During poor economic conditions, the decision to focus on advertising might seem risky. But Medialets seems confident that mobile ads remain relatively young, with plenty of room to grow, and investors seem to agree. The company raised $4 million in Series A funding, led by the Foundry Group with participation from DFJ Gotham and angel investor Bobby Yazdani.
Eric Litman, Medialets’ CEO, estimates that the market for mobile ads will expand during the next four years to around $300 million and $100 million for the iPhone and Android, respectively. Litman believes a majority of the apps in the future will be free, and subsidized by ads. To date, 33 percent of mobile users have never paid for a mobile game, suggesting that many developers will utilize a free-to-play model in the future.
But other revenue streams exist as well, such as virtual goods. Ads alone seems risky for developers — at least for now.