The Battle for Mobile Search

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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.

Holahan is a writer for BusinessWeek.com in New York .