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Can Start-Ups Make Money Off Of Mobile Web?

Posted by: Olga Kharif on May 28, 2008

Mobile Internet is viewed as the next big thing in wireless today. Lots of start-ups are getting funded, lots of new mobile Web companies are opening up. And yet, Web entrepreneur Joi Ito just posted a blog questioning whether it will be possible for entrepreneurs to make money off of the mobile Web.

He makes a really good point: “Although all of us are experimenting with advertising and advertising is increasing on mobile, the overwhelming percentage of money spent on mobile devices goes to paying for and the collection of payments for a small number of not so innovative products from a small number of providers.” Basically, he says, mobile Web revenues will flow to the operators — and not to innovative start-ups.

I am not sure that I agree. Service providers are opening up (albeit slowly) their networks to outside Web sites. Consumers increasingly demand access to the whole Web, and not just a portion of it that their carriers have chosen to make available. So, it seems to me, start-ups have nearly as much of a chance to make money off of the mobile Web as they do on the PC Web. Do you agree?

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Reader Comments

Mike Reardon

June 1, 2008 04:48 AM

Forget ads go for real sales. Your GPS location within 3 blocks of 4 pizza joints should have some value to the merchants, the cell carrier, and also the mash-up creator. A real pizza sale on your card has a value that becomes data to your bank account, the merchants, the cell carrier, and also the mashup creator. Go for real a connection to get the sale.

Shopping the Mall on your cell phone or smart phone, if you are connected into the Mall’s wifi connection. Merchants know you are there and should have sales coupons or This Hour Extras that can be offered by text message to get you to shop all the way through the Mall. A mashup that has you standing in their store, scanning a products barcode into your cell, that sale now over someone else in the Mall is then what extra they can give. Free gift wrapping added maybe at point of sale or a lower sale price in that hour maybe.

For the next few years we can all use real sales mashups. I think connections have the greatest value in any sale, they may end as standard features that every merchant offers from cell carries.

Making the mashups and marketing them should get a lift from Google Maps API, and all the other ad centered API’s that every platform is now offering.

Raj B

June 1, 2008 12:32 PM

Can startups make money for innovative services on the mobile web? Yes. The problem however is startups need to understand operator's "capacity constrained" business model and change the technology model for better revenue-sharing leverage. In other words, integrate to operators > hosted in-house inside of operators' OSS/BSS.

Wouldnt hold my breath about "open access" quite yet, but focus on the right technology architecture and strong commercial framework instead. The operators are ready to talk - so go make it happen!

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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