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Helio, the mobile virtual network operator (MVNO) that tried to sell MySpace-branded handsets and service, has been purchased by Virgin Mobile. 

After EarthLink bailed out, SK Telecom pumped an additional US$270 million into Helio in a last-ditch effort to save the struggling business.

The Helio kiosks in Ala Moana Center never looked very busy. I’m not sure how many Helio subscribers signed up in Hawaii, but the nationwide numbers had gone down to 170,000, compared to Virgin Mobile’s 5 million. Young adults seem to carry T-Mobile’s Sidekick or a Verizon phone, although the iPhone may gain traction in a few weeks with its new low price. 

See this TechCrunch article titled Helio Hangs It Up for more details. 

Related articles and pages on billso.com

• iPhone
• 9 June 2008: iPhone 3G
• 13 April 2008: MySpace keeps trying to sell music downloads
• 29 September 2006: ESPN sacked, Helio scrambling

Smells like… depseration! The New York Times reports that three of the largest recording companies will sell digital music through an updated MySpace music store. ReadWriteWeb has more details on the updated store, which EMI is avoiding for now.

While MySpace does have a large user base, the site can’t offer the easy integration that Apple’s iPod and iTunes have developed.

Previous efforts like Helio might have survived if MySpace had done a better job with its earlier music sales sites. See this 4 September 2006 New York Times article and an earlier article from Mashable for more details.

Related posts on billso.com

• 25 February 2008: Social Media 101
• 28 August 2007: EarthLink announces layoffs
• 20 June 2007: MySpace vs Facebook
• 17 June 2007: Anticipation builds for Apple’s iPhone
• 17 April 2007: Mobile telcos search for new business model
• 29 September 2006: ESPN sacked, Helio scrambling

ESPN announced yesterday that it was shutting down its mobile virtual network, Mobile ESPN, at the end of 2006. See these articles in Forbes and Gearlog for details.

I was wondering if anyone was buying these phones or using this service. I’ve seen their advertisements on ESPN all year, but I’ve never ever seen anyone who used these phones.

The target market had to be 21 to 30 year old men, but most of them already have a cell phone.

One analyst noted that ESPN should have marketed the service for a few more months, at least until the end of the college and professional football seasons. Every additional month would bring ESPN more opportunities to promote the service, and provide more potential customers who were at or near the end of their mobile phone contracts.

Very few people want to pay for two cell phones, especially from two different carriers.

Granted, the target market I’ve identified includes a lot of gamblers. Gamblers will buy almost anything if they think it will provide them an edge. Mobile ESPN is an attractive service for these men, as the service delivered text and video content from ESPN’s television networks directly to the customer phone.

Keep in mind that ESPN didn’t operate the mobile phone network. It bought minutes and network management from Sprint, and resold the service to its customers.

Now ESPN plans to license its mobile applications to other carriers. Good luck! There are other mobile virtual network operators in the US such as Disney Mobile, Amp’d Mobile and Helio.

Helio is a joint venture between EarthLink and SK Telecom, led by EarthLink founder Sky Dayton, and partnered with MySpace as its core content source. It’s hard to argue with the man who built the second-largest ISP in the United States, or with the News Corp social networking juggernaut.

But Helio seems to be in trouble. I haven’t seen anyone who uses their phone or their service. Quite frankly, Helio’s teenaged target market has even less disposable income than the Mobile ESPN crowd. Helio does offer a tradeup program that lets customers sell their handset to Helio, but the rules are seem too complicated for most 16 to 25 year olds to follow.

Helio’s latest announcement is a combination EVDO-WiFi card, combining the fastest cellular data service in the US with 802.11 b/g access. Helio is also developing devices with built-in EVDO-WiFI access for release next year. The card is just a stopgap measure.

Imagine a Helio branded PDA or laptop that can access MySpace wherever there’s a decent cell phone signal.

I could imagine an ESPN branded device - but ESPN has thrown in the towel for now.