VentureBeat

Virgin Mobile USA has agreed to acquire Helio mobile phone division from SK Telecom and Earthlink for an investment that totals $50 million.

The deal is part of a consolidation trend in mobile. Nokia this week agreed to buy Symbian, the mobile phone software maker, for $329 million. And Microsoft agreed yesterday to buy Portugal’s Mobicomp. Mobicomp is a mobile software company specializing in the storage and backup of data.

The deal ends a high-profile attempt by South Korea’s SK Telecom to break into the U.S. market with a uniquely designed series of cell phones. But SK Telecom will own about 17 percent of Virgin Mobile USA after the deal closes.

It also sheds light on the strategy being pursued by Virgin Mobile USA to get out of its own mess. The U.S. market has turned brutal, and Virgin’s stock has plunged. Back in April, we reported Virgin Mobile USA was considering mass layoffs, or possibly raising money from a private equity firm. This deal suggests the company may try to buy itself out of trouble.

Warren, N.J.-based Virgin Mobile USA will issue 13 million shares at $8.50 a share, or $39 million, in exchange for an 80 percent stock. It will also assume $10 million in debt and other considerations. Both Virgin Mobile USA and SK Telecom will inject $25 million each into the combined entity.

The two companies hope they can reach a bigger scale together. Virgin Mobile has 5.1 million subscribers in the U.S., but Business Week points out that they are not on long-term contracts. Earnings were down 75 percent to $4.8 million in the first quarter. The company expects to lose about 130,000 to 160,000 customers in the second quarter. Why? In a word, it’s the iPhone.

Helio brings the company some 170,000 customers who spend about $80 a month. The combined entity will be known as Virgin. Helio had interesting models when it hit the market, such as the Helio Ocean model that could flip out a phone-like number keypad in one direction and a text-messaging alphabet keyboard in another.

Talks about an acquisition were rumored for some time. SK Telecom actually denied in May that Virgin Mobile was in talks to buy Helio. The deal is expected to close in the third quarter.

This could be a replay of Sprint buying Nextel. And it raises a question as to whether the MVNO, or mobile virtual network operator, model which Helio pursued (and even Disney failed at) can succeed in the U.S. MVNOs lease their wireless spectrum from other carriers.

[Check out MobileBeat, our mobile conference on July 24. Earlybird ticket sale end today (Friday). Also, be sure to vote for your favorite mobile application or service company.]

Latest Silicon Valley round-up:

IPO window opening? — Lots of companies filing to go public lately. In just the past couple of days, there’s WiMax company Clearwire (see our story), game company Glu Mobile (see story), WiFi company Aruba (see story) and now rumors of software company Netsuite preparing one.

Redback Networks comes long way — This San Jose company went big, and then bankrupt in 2003. Now we learn the company, which manages 50 million broadband connections, has been bought by telecommunications equipment maker, Ericsson for $2.1 billion.

Google offers multiple destinations – You’ve probably noticed that Google has improved its directions service on Google Maps. It started storing previous addresses you’ve looked, and now has offered a way to look up multiple destinations in one go. You just hit the “add destination” button (see image below)

U.S. dumps VaxGen — In an unusual dose of tough medicine, the U.S. government canceled its $877.5 million contract with Brisbane’s VaxGen for an improved anthrax vaccine because the company didn’t meet its deadlines. Good overview of the debacle here in the Merc.

Zoho continues its barrage of software offerings, offers Wiki product — We’ve written about this scrappy, low-cost, but impressive software provider before. It has one of the widest arrange of online software products out there, many of them free. It told VentureBeat yesterday that Zoho Wiki is now available. You can create it for public use, or private use among a group. Zoho’s previous weakness was that many of its products weren’t integrated within the same platform, but it has moved to change that lately. The Wiki, for example uses Zoho Writer as the editor, and appears to have most of the other features you’d want (spell check, integration with spreadsheets, immediate syncing when those spreadsheets are changed, YouTube video embedding, RSS for pages). More details here.

Podaddies, yet another advertising start-up — Gigaom reviews San Francisco start-up, Podaddies, which wants to place advertising in user-generated video. We don’t see much new here. It does want to customize the service to each site it serves, but there are others that do that too. It is a self-admitted “tortoise” among many hares.

Milpitas is wired with WiFi — Earthlink announced that its service in Silicon Valley city of Milpitas is now ready for use. However, it is not free. After 30 days free testing, a user must pay $21.95 a month. Occasional users can pay rates ranging from $3.95 for a one-hour pass to $15.95 for a three-day pass.