In the interest of fair disclosure, I need to admit that I have a personal relationship with several of the people involved with this venture. Now that I have that out of the way, I can talk a bit more about this service.

About two weeks ago I saw a demo of the Cellfire service, which is the first offering from a Silicon Valley start-up called Moonstorm. The service recently launched in Northern California and it is a way for consumers to opt in and receive coupons and deals from local and national merchants. The demo I saw had the service running on a black Moto RAZR on the Cingular network.

The concept is very simple. Provided that you are on Cingular in Northern California (for the time being) and using a supported mobile phone, you can download a small application over the air. This application allows you to opt in and receive coupons from merchants such as 1-800-flowers, Boston Market, and Hollywood Video. These coupons are pushed to your mobile phone in the background and the Cellfire interface shows you what coupons are available for use. To use a coupon, simply click on it and you are given a short code that you either provide to the cashier (if you are redeeming it in store) or to the operator (if you are redeeming it by calling a merchant). The service allows the coupon provider to limit the number of times you use a given coupon.

The service also implements a basic form of location awareness. Instead of trying to use GPS or some other means to report a user’s location, the service allows the user to specify his or her location (by zip code). Given the challenges that many others have had in getting finer resolution (and the questionable value of having lowl-level resolution), this seems like a good way to go.

I don’t claim to be an advertising expert. But I do know that people have been looking at ways to do more effective advertising on mobile phones for a long time. Aside from seeing very few actual working implementations in this space, most of the concepts I have seen have been focused on either bombarding users with unwanted ads as they pass by or require ultra-precise location data to deliver some form of advertising.

I like the approach that Cellfire has taken here. They have an opt-in model (which is always a plus), a clean interface, and a good set of initial partners with which to go to market. I will be interested to see how this service grows as it rolls out to new places and signs new partners.