When a masked student walked across the campus of St. John's University in New York this week carrying an ill-concealed rifle, the campus was quickly and efficiently locked down. Cell phones bearing text messages spread the word, as officials used a system put in place after the shooting tragedy at Virginia Tech last April.
The following day, Verizon Wireless drew swift, sharp criticism for refusing a request from an abortion rights advocacy group to set up a text message alert system with subscribers. Within hours, the company reversed its position.
Two major news stories highlighting the growing uses and popularity of cell-phone texting. While texting is used significantly more in Europe and Asia, it is quickly becoming entrenched in the United States, particularly among the youngest of cell phone users. It's a trend that leads some to think there's money to be made -- both in practical and entertaining uses.
It is estimated that 35% of all wireless customers now communicate with text as well as voice. Verizon reported it's number of text messages in the United States more than doubled between the second quarter of 2006 and the second quarter of 2007, and increased more than tenfold from the second quarter of 2004.
Revenues also have increased, but not as dramatically, largely because wireless providers are expanding their flat-rate unlimited texting plans, and a lot of the 28 billion text messages sent in the second quarter of this year fell under those plans.
The Yankee Group research firm projects that U.S. wireless carriers generated roughly $3 billion of their overall $140 billion in service fees from text messaging in 2006. The firm also predicts that text messaging revenue will stay flat over the next few years. Meanwhile, text spamming is on the rise, which could crimp legitimate advertising efforts.
Telecommunications and media research group Informa projects marketers will spend more than $11 billion on mobile advertising by 2011. But that estimate is predicated on customers who trust they are receiving only messages they want to see.
On the corporate level, texting has become an essential investment as an accessory for new products. Just this week, Hewlett-Packard launched ColorMatch, which uses a computer to provide customers with cosmetic color advice delivered via text message. And Nokia introduced a line of video games in which users get text messages containing Internet links.
So what's an investor to do? You can't invest in texting all by itself. Large-scale texting is just one slice of the telecom pie. The names are familiar: AT&T, Verizon Wireless, Sprint Nextel. And specialty firms like NTI Group, which produced the system used in the campus lockdown in New York, are privately held.
"The money is in the hands of the carriers, with little investment opportunity for outsiders," Neil Strother of Jupiter Research told CNBC.com. "There's opportunity on the product-development side, but that field is dominated by small, private companies."
Wherever the money is, texting is growing. Strother says American text users are rapidly catching up with those overseas. The percentage of American wireless subscribers now sending and receiving text messages is at 52, growing fast, and likely to grow even faster with the increased use of cell-phone messages by advertisers.
Strother sees texting as just one step toward something even bigger: The Internet on the phone. Jupiter's research shows only about 15 percent of American cell-phone users have even tried to use the Web on a phone, and they're lagging behind their counterparts in Japan, who now choose the phone over the computer as the primary tool for surfing the Internet.
But there are some hints about making money on texting. The users of Deutsche Telekom's T-Mobile tend to be younger than average, and more inclined to tap out than to talk. And analyst Michael Nelson of Stanford Research sees some M&A action in the sector, with a $5.5 billion offer from MetroPCS for Leap.
And in a recent interview with the Chicago Tribune, Neil Strother, a mobile analyst at Jupiter Research, indicated that texting is just one step toward something even bigger: The Internet on the phone. Jupiter says only about 15 percent of American cell phone users have even tried to use the Web on a phone, and they're lagging behind their counterparts in Japan, who now choose the phone over the computer as the primary tool for surfing the Internet.