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Helio Pulls Yahoo Into Its Orbit

Helio, a wannabe provider of wireless cool, launching "sometime this spring" (the official launch date is strictly hush-hush), has inked a content deal with Yahoo while it continues to build buzz among the young, mobile users it hopes to attract.

"We want to appeal to them as the new mobile brand," said Rick Heineman, director of media and analyst relations at Helio.

The agreement with Yahoo allows the start-up mobile virtual network operator (MVNO) to add full search, mail and messenger capabilities, as well as news, sports, finance and movie information to its new line of handsets.

Helio has so far announced two handsets, the Kickflip and the Hero.

Both will come with a 2.2 inch QVGA screen, 260K color 70 MB of memory, a 2 megapixel camera with built-in flash, 4x digital zoom, MPEG 4 video camera and full-sound speakers, and they will support MP3, MPEG 4 player, VOD, MMS, Mobile Flash and TV output.

Helio, which signed an agreement with popular youth destination portal MySpace.com in February, is looking to become a must-have among the younger end of the core demographic, which Heineman said is kids in their late teens and early 20s.

"We're looking at consumers who are into social networking, not the typical power user," he told internetnews.com.

Ultimately, Helio hopes to be worn as a kind of electronic "fashion badge."

Helio's new handsets will come fully loaded with memory and graphic capabilities allowing users to share games, music and videos.

"The ability to share is more important than just consuming it linearly," said Heineman.

Gifting is one of the new features available through the new Helio handsets.

"If it's your friend's birthday, and you see a piece of content -- a video or a game -- that you think your friend would like, you can gift that piece of content to them," he said.

The recipient receives a text message telling them that the sender has offered them a gift with a link to the particular piece of content.

Another feature would allow users to capture photos and post them directly to their MySpace profiles.

Nevertheless, Heineman admitted that the Yahoo deal allows Helio to attract users who are not attracted to MySpace.

At first blush, there doesn't seem to be a lot of commonality between MySpace and Yahoo. But Heineman said the company's core demographic is heavy users of Yahoo's search, messenger, and mail services.

Julie Ask, analyst with JupiterResearch, agreed.

"I'm sure they'll find some common ground," she told internetnews.com.

Helio is a joint venture between Earthlink and SK Telecom, and is headed by former Earthlink founder Sky Dayton.

Heineman explained that Dayton had the inspiration for Helio after a trip to South Korea, where he saw young kids using their mobile devices for a variety of purposes -- almost all of it data-related.

How that translates to the U.S. market remains to be seen. According to Ask, the U.S. wireless market is driven by cost and coverage, not data.

"The percentage of people using mobile devices based on content in the United States is statistically zero," said Ask.

But Heineman said that the MVNO is not looking to repackage middle-of-the-road content that is consumed by Middle America.

"We're not trying to be all things to all people," he said.

Helio has not revealed how much it would charge for its service, making it difficult to gauge how well the start-up can do.

Ask said that in order for the model to work, Helio will have to generate higher average revenue per user than the carriers from which it leases bandwidth. But in order to do that, it will have to differentiate itself from other wireless carriers.

"They have to offer cool data, content that pulls users in the direction of an alternative provider," she said. "It has to be unique."