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Startups get a lift from election '08

As the election draws to a close, fledgling companies are helping the presidential campaigns make a final push to reach voters via cell phones and video games.

By Michal Lev-Ram, reporter
Last Updated: October 29, 2008: 9:53 AM ET

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To get voters to the polls, the presidential campaigns are texting millions of supporters.

SAN FRANCISCO (Fortune) -- When 100,000 people turned out in St. Louis recently to hear Barack Obama speak, his campaign's ability to organize such a massive rally in a red state owed much to the deft use of digital technology from a company called Distributive Networks.

Before being tapped by the Obama campaign, Distributive Networks was a relatively unknown company that made money sending out promotional text messages for the likes of D.C. United, a professional soccer team. Now the Washington, D.C-based company is powering the nation's largest mobile marketing push - the selling of Barack Obama.

It has sent out millions of text messages to Obama supporters, targeting them by zip code to get them to appear at events like the St. Louis campaign stop and a rally in Denver on Sunday that also attracted 100,000 people. Distributive was also behind the campaign's announcement - via three million cell phone text messages - of Joe Biden as Obama's vice presidential pick.

"It's been a huge door opener for us," said Distributive Networks CEO Kevin Bertram, who adds that queries from potential clients have spiked since the Biden text message went out.

Distributive Networks isn't the only tech company benefiting from the virtual presidential campaign. As the most technologically advanced race for the White House nears the finishing line, the candidates are making a final push to reach voters through social networking sites, mobile messages and even ads inserted into video games.

That's meant new business opportunities for many startups to not only sell their services to political campaigns, but also get their name out to a wider audience. A record 46% of Americans have used the Internet, e-mail or text messages to participate in the presidential race, according to a recent survey by the Pew Internet & American Life Project.

Take Twitter, a micro-blogging service that lets people send short messages to cell phones. Though the San Francisco startup was generating plenty of local buzz before the Obama and McCain campaigns started using it to send updates to their supporters, the company says interest in the upcoming election has helped publicize its technology. For example, the number of people signing up for Twitter accounts rose 135% during the first presidential debates on Sept. 26, compared to the prior week, according to the company.

"It's great for our business because it showcases the power of Twitter," said Twitter co-founder Biz Stone. "It's a great opportunity for us to reach a much broader, more mainstream audience."

Twitter also signed content deals with C-SPAN and Current TV, a user-generated cable television channel that included a live Twitter feed of politics-related messages during the presidential debates.

Of course, most of the tech companies benefiting from the presidential race had not targeted politics as a money-maker. Eventful, for instance, is an online service that lets musicians and fans publicize and find concerts. But politicians quickly latched on, especially after the San Diego-based startup launched a feature that allows people to request performers come to their towns. Eventful says that the campaigns have used this feature to gather information about their supporters and to communicate with people who have requested politicians visit their area - to get the word out about a nearby rally, for example.

"Throughout the primaries all of the candidates were using it," said Eventful CEO Jordan Glazier. He says Obama's campaign has been most active, and tapped the site to plan rallies and recruit volunteers. It has also used Eventful to send out over 2.5 million messages to supporters. While the service is free, Eventful makes money off the increased traffic by selling ads on its Web site.

While both Democratic and Republican presidential campaigns have used new media tools to reach voters, the Obama camp has made a name for itself as the most tech-savvy. Not only did it hire Facebook co-founder Chris Hughes to help run its digital strategy, but this month it became the first political campaign to advertise in video games.

Aimed at gamers in battleground states like Ohio and Florida, the new ad campaign uses technology from a Microsoft (MSFT, Fortune 500) subsidiary called Massive to insert advertisements for VoteForChange.com (a voter registration site launched by the Obama campaign) in Internet-connected Xbox 360 games like Burnout Paradise, Guitar Hero 3 and NFL Tour.

"It's a great way to reach a hard-to-reach demographic," said Cassandra Nuttall, Massive's global head of marketing for Massive. "In-game advertising isn't new, but this is the first time a political candidate has done it - it's generated so much buzz." According to Massive, the Obama ads will run through November 3, the day before the election.

The campaign has even seized upon the popularity of Apple's (AAPL, Fortune 500) iPhone to help spread the word. In September, Obama's camp got a group of 10 mobile developers to volunteer to create an Obama iPhone application - the software program, available for free on the touchscreen device, prioritizes address book contacts by key battleground states to encourage people to call and canvass friends and family who live in contested areas. The results are anonymously aggregated by the campaign. The Obama '08 application also uses the iPhone's built-in GPS to find local campaign events and pulls up political videos and news.

"Text messaging and online organizing have been an effective way to garner enthusiasm from supporters who don't sit in front of a TV all day, many of whom are participating in politics for the first time," said Obama-Biden spokesperson Nick Shapiro.

The McCain campaign did not respond to e-mails and calls requesting comment.

But even Obama's efforts - which have gone far beyond using social networking sites to connect with supporters - are just the beginning.

"Technology was massively important in this election," said Mike Hudack, the CEO of Blip.tv, a video service used by the McCain campaign to host its online videos. "But we will only see this grow in importance in 2012."

In the future, politicians' use of online videos, social networking sites and text messaging won't be a novelty - it will be the norm. New technological advances like the ability to donate money via cell phones could also play a big role in 2012.

For now, companies like Distributive Networks, the mobile messaging service provider, are still focusing on the 2008 election season. The Obama campaign has already sent out more text messages than any of its other clients, and more are in the works as Election Day draws near.

"It [the campaign] has been a lot of work," said Distributive's Bertram. "But when a presidential candidate trusts you, that gives a lot of credibility." To top of page

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