Technology

The Battle for Mobile Search


When it comes to Internet search over mobile phones, upstarts have a decent chance against the likes of Google and Yahoo

When it comes to Web search engines, Google is the winner by a wide margin, handling nearly twice the requests of its closest competitor, Yahoo! After all, people use Google as a verb synonymous with Internet research. But while cell phone users may say they're going to "Google" something on the Web, there's a good chance the search engine giant may not even be involved.

The emergence of Internet-connected mobile phones, or what's known as the Mobile Web, is turning the wireless search business into a horse race—one that's too close to call. Unlike its dominant role in search on the computer, Google's (GOOG) slim U.S. lead in search via mobile phones is far from secure.

Google is the early front-runner in the U.S., with Yahoo hot on its heels, according to M:Metrics, a researcher that focuses on the mobile market. The company estimates Google had about 4.75 million U.S. subscribers in the fourth quarter of 2006, roughly 1.1 million more than Yahoo (YHOO).

Microsoft's (MSFT) MSN Mobile was a distant third with slightly under a million subscribers. Google does have a lead worldwide thanks, in part, to deals with leading telecom companies in China, India, Japan, and Europe.

Still Wide Open

But Google and Yahoo may not even be the true leaders. Medio Systems, a four-year-old startup, is quietly powering the default search feature on many phones from Verizon (VZ), T-Mobile (DT), and Amp'd Mobile services, among others.

Trouble is, M:Metrics and other researchers don't track Medio because its search engine is bundled into other wireless carriers' offerings. Medio chief executive and co-founder Brian Lent says his "white label" search engine actually has more users than Google's mobile product. "What we see is that someone who goes to Google search will often switch and use our product," says Lent.

Regardless of who is leading at the moment, the mobile search field is wide open. What's more, though brand matters to mobile users, it seems that service matters even more. "To think that you have a straight line from Internet success over to mobile is missing what is happening in the marketplace," says M:Metric senior analyst Mark Donovan. "This market is up for grabs."

That's why startups and search giants alike have scrambled to come out with the killer application for mobile, launching a stream of new search products within the past several months. At stake is a global advertising market estimated to reach roughly $11.4 billion by 2011 (see BusinessWeek.com, 11/28/06, "Ads Migrate to Mobile Handsets"). Worldwide marketing revenue from online search overall is expected to reach $27.4 billion by 2010, according to Oppenheimer & Co., a national investment company.

Howdy Partners

Take Yahoo. On Feb. 12 the company launched a new test version of its "Yahoo! Go for Mobile 2.0" service. The product, which will be supported by more than 100 types of mobile phones, allows consumers to search directly from Yahoo's map service, making it easier to find the nearest coffee shop when on the go.

The announcement came on the same day that Yahoo officially added LG Electronics to a list of partnerships with mobile device manufacturers including Motorola (MOT), Samsung, Nokia (NOK), and BlackBerry-maker Research in Motion (RIMM).

Yahoo also plans to expand its oneSearch product, launched in January, 2007, so that all mobile searches performed on Yahoo will return information that users want, rather than a bunch of links, says Ojas Rege, a senior director of Yahoo. A user who looks up New York City, for example, will not just see links to pages with the words New York City in them, but will see weather, news, and other information about New York City.

"I am not looking to do research on the mobile phone, I am just looking for quick answers," says Rege. "The Web search model—bringing back 10 million links to all kinds of sites—that falls flat on its face in mobile."

Steamlining the Process

There are a couple of key differences between search on a mobile phone and a computer that make companies unable to apply the same search engine product to the smaller mobile screen. The first is relative lack of speed.

Phones have less processing power than newer PCs, frequently have slower Internet connections than broadband users are accustomed to, and often lack the kind of keyboards that allow for fast typing. These factors, coupled with the fact that on-the-go users want their information even faster than they do when surfing the Web on a computer, makes mobile users less willing to navigate through a bunch of links for information.

In fact, slow service was one of the most frequently cited causes of customer frustration, according to the CMO Council's Global Mobile Mindset Audit, a study of 15,000 consumers in 37 countries unveiled on Feb. 12. (The study was supported by Palm.) "Consumers are typically looking for answers, not links," says Medio's Lent.

This point has not been lost on Google. The company is looking forward to more U.S. handset manufacturers coming out with processors operating at 1 GHz or faster and higher-speed networks, says Deep Nishar, the company's director of product management, who oversees mobile initiatives. However, Google has designed its mobile search product to deliver results more relevant to individual users.

Where Am I?

This month it began a U.S. trial to give users the ability to personalize the information they want to see, Nishar says. For example, users can choose to see updated weather information for a certain location or receive a feed of their stocks.

The company also unveiled a new mobile map program for Microsoft Windows that uses a global positioning system to provide directions, information about local businesses, and real time traffic. "On mobile, people don't have the patience to go through several different screens and fire up one application to do one thing and another application to do another," says Nishar.

The other difference is the relationship search engines have with mobile service providers. When a user searches the Web via the personal computer, the company providing the Internet connection and the company supplying the browser do not share in the advertising revenue generated from sponsored links or ads on the search engine's properties. With mobile ads, however, the mobile service providers want a share of the revenue.

Ironically, it is this revenue sharing arrangement that may give startups such as Medio and 4INFO their biggest edge over Google and Yahoo, which have broader advertiser networks and more relationships with marketers. The telephone companies would rather work with a smaller search engine likely to demand a smaller piece of the advertising pie, says M:Metrics' Donovan. "There's a certain amount of fear that these Internet titans are going to take all the revenue away," he says.

Competition for Business

There was speculation at the 3GSM show that the big mobile service providers—including Vodafone, Deutsche Telekom, Spain's Telefónica, and Cingular (T)—were discussing banding together to develop, or adopt, a mobile search service to rival Google, Yahoo, and Microsoft's MSN. Cingular, the only U.S. company involved in the discussions, did not return calls for comment.

Currently, either Google or Yahoo, or in some cases both companies, have partnerships with many of the providers allegedly looking for alternatives. Google, for example, has a deal with Cingular.

Medio's Lent would not say whether the companies have discussed his service as an alternative, but he is aware of the opportunity. "All of us are vying for the operators' business and, from a carrier perspective, they are pretty concerned about diluting their brand," says Lent.

Who wins the mobile search race will undoubtedly be influenced by who plays nicest—i.e., shares the most revenue—with the telephone services, says Rolf Assev, vice-president for product marketing at Opera Software, a company that provides the Web browser loaded on more than 60 million handsets worldwide.

The carriers, after all, influence, if not outright determine, which search service comes shipped with their phone. "The best search product in the future will be the one that is able to generate the most revenues for its partners," says Assev.


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