Lots of startups fail, and this one never got product / market fit, despite a huge potential market.
The argument up to now has been simply that there are roughly 3 billion phones out there, and that when these phones get on the Internet, their vast numbers will outweigh PCs and tilt the market towards mobile as the primary web device. The problem is that these billions of users *haven't* gotten on the Internet, and they won't until the experience is better and access to the web is barrier-free - and that means better devices and "full browsers"
Something to think about whenever you hear that the mobile market is so huge - it's the next big thing. Maybe true, but Russell thinks that day is a ways off...
Let me say that again clearly, the mobile traffic just isn't there. It's not there now, and it won't be.
What's going to drive that traffic eventually? Better devices and full-browsers. M-Metrics recently spelled it out very clearly - in the US 85% of iPhone owners browsed the web vs. 58% of smartphone users, and only 13% of the overall mobile market. Those numbers *may* be higher in other parts of the world, but it's pretty clear where the trend line is now. (What a difference a year makes.) It would be easy to say that the iPhone "disrupted" the mobile web market, but in fact I think all it did is point out that there never was one to begin with.
Apparently the mobile market is still mostly a vertical app space (i.e. you should concentrate on a small slice like iPhones only, or perhaps SMS subscriptions in India...)
BTW, This reminds me - I can't wait for the iPhone 2.0 in June...