Funambol wants to offer a Blackberry for free to enterprise users, and an ad-supported mobile email service to every one else. It's based on open source, and in theory at least, allows enterprises and operators to do away with expensive Blackberry servers and handsets, and have email on regular handsets.

"Funambol is the largest open source mobile project," says Funambol chief executive Fabrizio Capobianco. "We are getting Blackberry to the masses, on mass market phones. Blackberry only reaches two percent of the market." With around three billion phones and two million email accounts, he reckons there's a big untapped market.

Open source gets round the problem of the number of different handsets, he says: "Device compatibility is the number one problem. In theory, in a mass market, you have to test every phone with every mail service. That's where open source kicks in." Funambol has contributors in every country who are happy to test and certify handsets. For a small fee, or to enable a service they want to deliver, they will make sure a given phone works with Funambol on a given mobile operator network.

"It's clear that in ten years, everyone will have email on their cellphone. That's the way we're going," he says. In Africa, some people's experience of email may be almost entirely on a phone: "There are more cellphones than houses with electricity. Some people can't have a PC at home, so their entire email experience outside the office may be on the mobile."

But how will Funambol make money? Not through the enterprise. That gets a "Community" edition with MySQL-style licensing targeted to enterprise. " If you are an enterprise, and you have an Exchange mail server, you can download our server, plug into the mail back end, and start pushing email to all users, not just to the CEO who has a Blackberry," he says. Funambol works on Razrs, Nokias, and even the Blackberry-toting CEO is catered for: there's a Funambol client for the Blackberry.

It may be free, but Funambol takes the enterprise seriously, and expects lots of take-up, perhaps through third parties who charge for support. "If you are using a Blackberry the cost is $50 per month. The cost saving can be enormous - and you can do it with phones users have already."

There aren't too many high-profile enterprise users, but Funambol is used by the French parliament, he says. MPs there wanted a Blackberry-like service, but did not want their official email going through RIM's servers in Canada.

Consumer email

"We make money when operators package the software up for consumers," says Capobianco. "We sell them a version called Carrier edition, which includes some additional software, that allows them to scale the server to millions of users."

Unlike other open source providers, Funambol has an easy job distinguishing its free users from paying customers. "Unlike others, we are segmented by community," says Capobianco. That makes our life much easier." Open source vendors like Sun with MySQL and Red Hat have to sell to the same people they are giving a community version to: "They have to give away 70 percent of the features for free, and then upsell on the other 30 percent."

"This creates tension," he says. "Which features do you give away free? That depends on who pushes hardest, the sales people or the customers?" Funambol doesn't upsell its community because it has a different model: "That allows the community to grow really really fast and be happy."

The name Funambol, means tightrope walker, he explains. The company has to keep a balance between its different customers.

Funambol supports 850 handsets, says Capobianco: "It's going to 1000 with the next phone pack." He can't say how many users there are though with an open source project, he says: "We've had 3.2 million downloads, for the combination of server and client."

Although Funambol isn't making money yet, it has been cashflow positive since the beginning of the and employs 75 people. It has just announced $12.5 million of new funding, taking its total to $25 million, and is addressing the question of how to make money out of consumer email.

"It's clearly an untapped market, where open source gives the necessary advantage, but one of the questions was how do you monetise this?"

Ad-funded mobile email

Funambol's answer is ad-funded email. While some people are willing to pay for mobile email, the price they will pay is around $5 a month. People expect webmail to be free however, funded by adverts."They will want free mobile email," says Capobianco.

"Free mobile email can be powered by a small banner," he says. "The numbers are pretty big." Starting from around ten emails a day, he suggests that could mean thirty banners a day on the phone, or about a thousand "impressions" a month - which he says would be worth $20 to the advertisers. This would be more lucrative to the provider, he says, since the maximum they could charge the user would be $5 a month. "If the ads are non-intrusive, or even useful, the operator can deliver a very powerful solution, free, but there is still money to be made."

The messaging client will be the best way to deliver mobile adverts, not the web, he says: "The mobile phone, is a communications device. Most of the time, it is used for talking or messaging. Browsing is really an emergency tool." The mobile equivalent of Google's revenue will come not come from the browser but from emails.

But the screens are small, we say. "The adverts won’t be big brands, but local small ads," he says, with a banner, or a coupon for a local business, perhaps a free starter in a restaurant 20m from where you are. He doesn't believe in click-through on mobile devices - that is more for the PC. "On the mobile phone, it will be call-through or walk-through."

But there's a trade-off between intrusive and effective, we say. If adverts aren't intrusive, they can't be effective, surely? "If I do a search, I personally don't find the ads on the right are intrusive. My wife tends to click on the banners on the right - she feels they are delivering better results."

Adverts can be non-instrusive but usable, he says, and it is possible to do that on a mobile phone. "If you know where I am and what I like, and what time of day it is, you could deliver something non-intrusive but I will notice it."

"Nobody has done a major launch of ad-based mobile email," he says. "We are looking at the most used application, and the broadest audience of all."