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Wednesday, April 25, 2007 

Mobile Search: The Next Big Thing (Not)?

Will mobile search live up to the market hype and push mobile ad revenues to $6.5 billion as anaylsts forecast?. There was a consensus that online search behavior (and its growth trajectory) will translate to the mobile space – someday. “But until users use search habitually, it’s not going to live up to the hype,” Andy Walker, CEO of local search provider m-Spatial said. That day will likely arrive when the industry successfully tackles poor usability and understands that the paradigm in mobile search is not about links – it’s about actionable and relevant answers.

But there also needs to be enough content worth searching for, said Michael Bayle, who heads search monetization at Yahoo. With this in mind Yahoo has recently launching a slew of mobile publishing services to involve content providers – even real estate agents – who have content users would appreciate on-the-fly, but can’t get on the mobile Web today. In the meantime, Yahoo plans to make what little content exists on the mobile Web more enticing by harnessing social media – and specifically its existing Yahoo Answers community - to deliver not just links but what users who know the content think about it. “We’re going to invite consumers to be part of the (search system) to rate content, tag content and expose content to consumers.”

Another reason mobile search fails to meet high expectations is a disconnect between what advertisers want (namely reach and revenues) and what mobile search can currently offer (namely, neither). The jury was out on how to solve this one – but there was a general consensus that building inventory (and this interest among advertisers) is paramount. As Omar Tawakol, chief advertising officer at Medio Systems aptly pointed out (quoting someone who coined it before him): “There’s just no ‘M’ in CPM.”

But there will be. Tawakol outlined how money will pour into mobile search – if mobile search companies become brokers linking operators and advertisers. Today, he said, mobile operators are paying search providers to provide search on a per user basis. “We think this has to go the way of ad subsidized [content]. The two models will exist in parallel for a while and [eventually] the ad model will dominate.” Advertisers will bid and buy ads and that money will go to the search vendor, whose function is to facilitate cross-carrier bidding. The revenues will go back to the operator – or to the content provider if it’s off-portal (but no hint of the rev share split here). The money pumped into mobile advertising encourages other content companies to join the party, which grows the inventory, and so on. Advertisers will foot the content bill because the “mobile is the last mile to the customer,” Tawakol said.

Mark Chan, who heads mobile search at Sprint Nextel, was equally optimistic about the outlook for mobile search and mobile advertising. No word on when it will happen, but Chan pointed to a positive development in mobile search usage (again, no numbers) and acceptance. His conviction: online search behavior will move to mobile and ad revenues will follow. He offered an overview of the Sprint’s most popular search terms to show users are beginning to see search as more central to what they do on mobile. Terms included (not in any particular order): weather, ESPN, games, MySpace eBay, maps and lyrics. In addition, users are searching when they are in shopping mode, looking for real-world shops and goods including: Amazon.com, Target, Wal-Mart and Best-Buy.

Does this pivotal role of mobile search put an end to last year’s branded vs. white label debate? For some – predictably white label providers – the debate has gained new importance. Sprint’s Chan, whose company partnered with MSN for mobile search, argued that brand is not a major concern. With mobile search usage at only 5 percent it’s hardly the time for operators to worry about which brand is on the service. “It’s about the quality of service and not so much about the brand.” However, he admitted the debate could take on more meaning “once search usage reaches 30 or 40 percent.”

Predictably, both MSN and Yahoo played down the importance of brand – with Yahoo’s Bayle even going so far to say that “brand is not important.” He later tempered this by saying the Yahoo brand will “take a step back” to “allow whoever controls the ecosystem to control the experience”. (Translation: if the operator has clout – or simply insists – Yahoo can be a lot like a white label provider.) This new rhetoric apparently tried the patience of JumpTap and Medio. With mobile search at the center of the mobile content experience Medio’s Tawakol questioned whether the operator can “afford to give this brand up to one of the online portal search brands”. He believes operators have too much too lose. Google is the obvious target of criticism (all the easier since Google didn’t attend the conference). But the other branded providers might also be Trojan horses, he contended. Yahoo and MSN are “grey label” providers because they are willing to put their brand second. “But their true colors will show over time”. One could say his comments are colored by the fact Medio is also a white label provider. But reading between the lines its clear the brand debate has taken on new importance now that the industry is so anxious to cash in on mobile advertising.


source: MoCoNews

Pedro "K2" Macêdo

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