"I've gone from editing 7,000-word cover stories for Rolling Stone to editing 160-character text messages," says the publishing veteran, who is helping craft the editorial style for 80108 Media. The Boston startup sends text messages to subscribers' mobile phones on a variety of locally themed topics, ranging from bargains at nearby stores to news on the Red Sox.

Text messaging is inherently limited, but it represents a new realm that has become especially popular among young customers.

"We're inventing this medium," he adds. "That's very exciting."

SMS is king

Holt has joined a broad effort to develop new forms of content for wireless phones, arguably the most personal of computing devices. Video and games are making their way to handsets, while more utilitarian services are emerging alongside them. Mobile content development, as well as the need to re-engineer Web sites for the small screen, is attracting greater attention from venture capitalists, traditional media companies like Viacom Inc.'s MTV Networks, technology leaders like Microsoft Corp. and prominent investors like Carl Icahn.

Despite the growing sophistication of video, games and other forms of content for mobile devices, "texting," otherwise known as short messaging service, still remains the top moneymaker, followed closely by ringtones.

"SMS is still the king in terms of the one data service that garners the most revenue," says Yankee Group Research Inc. analyst Sharon Ballard.

The simplicity of texting and the ubiquity of phones that can send and receive these short messages help account for its popularity. Price also is important, since texting does not require a $15 a month data plan. Indeed, a major challenge facing media content companies is how to get consumers who are already billed $40 to $60 per month to pay more.

80108 Media CEO Rob Adler describes text as the lowest common denominator among phone users. It may lack glamour, but what Adler's customers really want is useful, narrowly focused, local information, he says.

"I would argue that Craigslist, back in 1995, was not terribly sexy or flashy or anything else," says Adler, referring to the popular online classified ad network. "Boy, did it have utility."

Chocoholics

In the U.S. at least, branching out could prove challenging. The domestic wireless market has lagged more advanced networks in Europe and Asia. Although phones equipped for games and video are available stateside, it could take a year or more before a critical mass of new devices are in consumers' hands.

"We're kind of at the stage the Internet was at with 9600 baud modems," says Trip Hawkins, founder of video game pioneer Electronic Arts Inc. and chairman and CEO of mobile gaming company Digital Chocolate Inc., referring to the days before broadband was widely available. "You have to get excited about what that says about the future."

Digital Chocolate has sold 30 million handset games worldwide since Hawkins founded the startup in 2003. The company's financial backers include Sequoia Capital, Kleiner Perkins Caufield & Byers, Sutter Hill Ventures and Chengwei Ventures LLC. Digital Chocolate also is moving beyond gaming to develop social-networking services for what experts describe as the emerging mobile Web 2.0. For example, users can create so-called avapeeps, or online personas, through a service the company bills as "the first-ever, fully connected mobile fantasy dating world."

"Avatars," the electronic incarnations people use to represent themselves, are big business on the wired Web, used by gamers and others to create alter egos to convey an online presence. Second Life, for instance, the virtual world created by San Francisco's Linden Research Inc., is populated by more than 6.6 million avatars, representing people who collectively spend millions of real dollars on clothes, real estate and other items.

In the coming months, Digital Chocolate is introducing what Hawkins describes as a mobile café, a virtual pied-à-terre that users can furnish and otherwise customize.

"Mobile is the ultimate social computer," he says. "People are carrying it around in order to be in social contact. That's the primary mission of that platform."

The popularity of some mobile content has even crossed over to mainstream media. The "Lil' Bush" animated short offered by Amp'd Mobile Inc., which this month filed for bankruptcy, depicts satirical grade-school escapades of George W. Bush and was recently picked up by Comedy Central.

North america lags

Although companies like Digital Chocolate were founded with the mobile market in mind, traditional gaming companies are beginning to buy their way into wireless services. Video game publisher and developer THQ Inc., for example, in May acquired Finnish mobile-gaming studio Universomo Ltd. Later that month, Electronic Arts spent nearly $170 million for a 15% stake in Chinese mobile gaming company The9 Ltd.

Both deals exemplify the opportunities mobile gaming developers see outside the U.S. Campbell, Calif., consultancy Infonetics Research Inc. expects revenue from mobile video to exceed $600 million in 2007, triple last year's figure, most of which came from Asian and European markets.

Demand for mobile video in North America is diminished by the abundance of television sets in this part of the world, says Infonetics analyst Jeff Heynen.

Globally, it's a different story, with telecom carriers especially keen to capitalize on the 2008 Olympics in Beijing. They hope to duplicate the success that European and Asian carriers had during the World Cup soccer tournament in Germany last year, when cell-phone users busily zipped around video clips of goals and other highlights, driving up traffic.

But international markets also highlight a potential impediment to growth: fragmentation of mobile devices technology and networks. The vast number of mobile devices and technologies throughout the world require wireless applications to work on a variety of handsets, which have differing keypads, monitors and operating systems and which run on varying networks.

Quattro Wireless Inc., which creates mobile Web sites for companies such as Univision Communications Inc. and Procter & Gamble Co., has wrestled with disparate technologies and formats. "We have invested a lot in our handset lab," says Quattro CEO Andrew Miller.

The company has developed models for more than 11,000 handset variations to troubleshoot potential glitches stemming from incompatible systems.

Sprinting past old media

Other emerging mobile services go beyond traditional media. Silicon Valley's Dash Navigation Inc. uses wireless phone networks and Wi-Fi hotspots to provide directions, traffic updates and other information to drivers. Eric Klein, Dash's director of product marketing, says that the company's traffic modeling techniques and online communications give it an edge over satellite navigation services.

Dash has an agreement with Yahoo! Inc. that lets it tap the Internet company's local search databases to help a user find local gasoline prices, movie listings or nearby restaurants, among other things. "Yahoo! has spent hundreds of millions of dollars to figure that out," Klein says.

Dash, which has been testing the service in the San Francisco area for more than six months, in February raised $25 million from Kleiner Perkins, Sequoia and others to fund initiatives, including a nationwide trial.

If high prices dampen mobile content sales, Yankee Group's Ballard says advertising could help lower costs and attract more customers. Yet even as business models are being ironed out, young companies in this area are drawing investment and acquisition interest. Greystripe Inc., a San Francisco company that distributes mobile games that contain advertising, in May attracted $9 million from the VC arm of the Walt Disney Co. and other investors. Earlier that month, Microsoft bought French mobile advertising company ScreenTonic SA, while Time Warner Inc.'s AOL LLC unit picked up Third Screen Media Inc., and Motricity Inc. bought marketing outfit GoldPocket Wireless last July. Motricity also received a $50 million investment from Icahn in February, which could fund more acquisitions.

The search for new revenue sources that don't entail spamming cell phones will remain a challenge for wireless carriers. In coming years, the number of new mobile phone users is expected to plateau. For wireless phone companies, business models and marketing strategies focused on dishing up content must improve. As many companies will discover, building a mobile content business is about much more than high game scores and sexy avatars.