GigaOM

Written by Ken Young, whose own blog is called The UK Mobile Report.

With offices in Lithuania, London and shortly L.A., Getjar is a small mobile software portal with big ambitions. And it recently took in funding of $6 million from Accel Partners, which should go some way to see it retain its strong position amongst web sites that bring mobile phone software to the attention of millions of users.

But one might wonder how Accel plans to make money out of its investment. Getjar, which has just 12 employees, is primarily a destination site for hundreds of developers and volunteer beta testers who co-mingle in one big, open-source soup. “We attract developers because they can immediately get their software tested by thousands of beta testers, who do it for the fun of it and give more than just feedback,” explains Getjar CEO Ilja Laurs. “They even give ideas on how the software could be improved to their liking.”

The result is hundreds of applications that are available for free. Currently revenue is generated selling premium spots for downloads, but the company is busy building two additional revenue streams as well: a platform for adding advertising at all levels in the applications (due this year) and a micropayments system (due in 2009).

The site gets 150,000 unique daily visitors split evenly across web and WAP visits. It is also running at around 300,000 daily software downloads and recently tracked its 100 millionth since launching in 2005.

Laurs believes that Getjar will benefit from what he thinks is a growing realization among the operators that they cannot ring-fence application development (much the way Apple is doing with the iPhone) for much longer, that they will realize that open development ultimately sells more phones — and more contracts.

But the hard truth remains: Development of mobile software means thousands of tiny tweaks for different phones, different OS versions, and even different operator networks, which increases the cost of development and squeezes margins.

Realizing that their value is tied up in their ability to attract and retain developers, Getjar also shares masses of confidential data regarding the beta testing to ensure they can make the best decisions regarding future development. But how do you make money out of an open-source development community? Getjar’s answer seems to be by getting into the distribution business through alliances with the emerging mobile advertising platforms.

A lot will depend on the willingness of mobile phone users to pay for applications (albeit through advertising) in the years to come, and of course the willingness of the manufacturers and operating system vendors to make it easier to develop for a wide range of phones. Few doubt that the mobile phone is the computer of the future, particularly in the developing world. The big question is which players will reign in the world of application development and distribution? Getjar has strong relationships with developers and testers, and as such, has a key part of the equation in place. Now it has to show its strength in mastering control of the higher parts of the value chain.