AOL grows here with Wildseed

America Online said yesterday it has acquired Kirkland-based Wildseed, boosting its stake in the wireless industry and its presence in Seattle.

As part of the acquisition, AOL formed a new wireless division that will be based here. AOL Wireless will include Wildseed; Tegic Communications, a Seattle company that AOL acquired in 1999 for $350 million in stock; and AOL Mobile, which provides customers with instant messaging and search services on phones.

The Seattle office will have 170 employees, including all 34 Wildseed employees now at its Kirkland office. Financial terms of the acquisition were not disclosed.

Wildseed, founded in 2000 by former Microsoft executive Eric Engstrom, develops software for mobile phones. It has raised an undisclosed amount of capital from investors, including Ignition Partners and Azure Capital.

Even before the deal, the ties between Wildseed and AOL were clear. AOL, based in Dulles, Va., recently appointed Craig Eisler to the position of AOL Wireless general manager and senior vice president.

Previously, Eisler founded and headed Redmond-based Action Engine; before that, he worked at Microsoft.

Eisler and Engstrom worked together at Microsoft, developing the DirectX that became the platform for the Xbox and other PC games.

"It's very exciting for me," Engstrom said. "We have not been together for six or seven, going on eight years. When we did this last time, we changed the face of gaming in the PC industry."

AOL's presence in the Seattle area previously came mostly from its acquisition of Tegic, which had developed T9, the "predictive" typing technology that uses the number pad of a mobile phone.

Don Davidge, who was part of Tegic's original management team and is now a senior vice president at Seattle-based Melodeo, said Tegic was highly successful.

He said he thinks it has the top-selling software of any kind today, based on the number of phones that ship each year loaded with Tegic software.

Because more phones than PCs are sold each year, and because Tegic has relationships with the top five phone manufacturers, Davidge reasons the software is the No. 1 seller.

"I can certainly see with Google, AOL and a few others building a sizable presence in the Greater Seattle area, there's a lot of wireless talent," Davidge said. "This is an example of how important it is to these companies to be in the middle of the brain trust."

Wildseed's most visible product is its SmartSkin accessories, which work with a phone manufactured by South Korea-based Curitel. They are being sold by Dobson Cellular Systems and available on the Cingular Wireless network.

The product targets the youth market with its unusual kidney-bean shape and features. The skins snap to the phone and instantly deliver a new style and new content, such as ringtones.

But Wildseed has developed more than that, Engstrom said. It also has built a Linux-based operating system for the mobile phone that supports applications including games and MP3 playback, video and other uses.

"The value is in the software," Eisler said.

What AOL might do with Wildseed technology is too early to say, he said.

Is it to create an AOL-branded phone?

"That's a possible implication, but that's certainly not what we are planning on doing out of the gate," Eisler said. Instead, he said, the broader opportunity is to extend the AOL brand to the mobile phone.

"For our members and our customers, their ability to get to things is just as important through the [Web] portal or through dial-up access as it will be on their [mobile] phone," he said. "Globally, wireless is the biggest thing going around."

Tricia Duryee: 206-464-3283 or tduryee@seattletimes.com