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Mobility, Re-Shaping the
World of Search
Changes in Search see
Growing Number of Investments Towards
Mobile Applications
By
Ann-Marie Fleming,
www.InternetSearchEngineStocks.com
November 2005
The
mobile arena is heating up as a variety of traditional Internet search firms
have turned their attention to mobile search applications. As this movement
picks up from companies such as Google, Yahoo! and Microsoft, questions
still surround feasible revenue models to take advantage of the growing
number of mobile users, through innovative search services.
As
Robert Enderle, President and Principal Analyst of the Enderle Group
explains, “The
overall goals of companies in this space differ. Microsoft is primarily a
platform company, Yahoo is more of a portal pure-play, and Google, at least
for now, is a search pure play. All three companies have search and have
major efforts with regard to search, but Google is the only one that only
does search at this particular point. However they are expanding to capture
a wider array of activity so that you are constantly connecting through them
in one way, shape or form to the vendors that they support.”
Google, in identifying the mobile arena as a high priority, has launched a
variety of mobile initiatives and are currently involved in several beta
projects. Deep Nishar, Director of Product Management describes Google’s
mobile involvement, “A year ago we launched Google SMS Search in the U.S.
and the UK which allows users to send in queries using SMS and giving
responses back on topics such as weather, movies, directions, stock quotes
and other generalized queries. We recently launched the Google Local for
mobile application, a downloadable Java application that works on more than
100 phones and is currently available on Cingular and Sprint. The mobile
version has the same searches as Google Local on the web, but given that it
is an application it provides additional interactivity and features for a
more seamless experience.”
Microsoft’s MSN
Search was released in beta this summer for MSN Mobile customers in the
U.S.
This service allows consumers to benefit from local search, instant answers
and other MSN Search capabilities now available via mobile devices,
providing them with easy access to precise answers from any location.
According to a MSN Spokesperson, “MSN is investing to deliver rich
communication experiences for consumers, ultimately bringing our consumers
closer to the people and information that matter most – anytime, anywhere.”
There are key
differences between the ways that companies provide search services on the
Internet versus a mobile device. While handsets have come a long way in
their level of sophistication the fact remains that screens are small, users
are on-the-go and information must be direct. As Jay Smith, Associate
Professor, Kagoshima University Inamori Academy of Management & Technology
in Japan explains, “The cell phone presents its own challenges due to space
constraints. Wading through pages of search results is really not a good
option and much of the web, particularly outside Japan, consists of pages
that aren't really set up for mobile viewing. That's why services that
actually answer questions or provide a service/solution are fundamentally
more useful.”
Companies such as AskMeNow, a mobile search provider that gives users the
ability to ask virtually any question found on the Internet and receive a
direct and relevant answer rather than links in return, are focused on the
concept of simplicity. Based on the realization that users of handheld
devices are more likely drawn to applications that suit the mobile platform
in terms of simplicity, suitability and efficiency, the Company believes
their direct answer approach appeals to the needs of the mobile user.
AskMeNow’s CEO, Darryl Cohen explains, “The Internet in its current form is
not easy to navigate through on the average phone, therefore the format
needs to be adapted for ease of use and access to relevant information. Our
application is built around the need for simplicity so that users can get
direct answers to their questions. We have created an interface that is
incredibly user friendly and together with our back end, allows for the
input of questions through either natural voice or free form text.”
 Answers.com,
an answer based search engine that aggregates over 100 different reference
sources in order to present answers to users’ queries as an alternative to
link responses, has extended its web service to the mobile platform with
‘Mobile Answers’. “We look at the mobile version of Answers as an extension
of our strategy to the handheld market where people need quick access to a
lot of information on a topic whether they are visiting a place or trying to
find the answer to a question they are discussing over a meal or a business
meeting. With Mobile Answers, we are giving quick access to the
comprehensive information we provide on over 1 million topics,” describes
Jeff Cutler, Chief Revenue Officer. Answers Corporation is utilizing their
mobile extension to deliver on their mission of providing comprehensive
information anytime, on any device and to extend their branding. “It is our
hope that people who use Mobile Answers will be that much more inclined to
use Answers online,” explains Cutler.
Google is also focused on the mobile behavior as a model to shape their
services by. “We continue to focus on the best possible user experience in
the mobile arena. In the last 12 months we have launched a great deal of
products focused on easing the customer’s interactions with the mobile
device. The goal is to make sure that users get content that is relevant as
well as formatted for their devices. We do things such as taking sidebar
links and putting them appropriately on the face so they do not take up the
first ten screens,” describes Nishar.
As companies operating in the mobile space begin to explore the
possibilities for growth, diversification and differentiation, traditional
search firms have yet to fully exploit the potential of this new avenue.
However, recent moves by firms such as Google reveal exploration of a
variety of opportunities. According to Enderle, “For the most part companies
such as Google, Yahoo and Microsoft are not looking at the mobile platform
as something unique, but more as an adjunct to something that you would
typically be doing at your desk. This is not atypical of a new class of
device or a new service because people tend to do what they know, taking a
little while to realize that differences can lead to new avenues and
opportunities as they begin to explore the edges of the technology to find
that niche that specifically leverages the mobile aspects of the product.”
Debate continues as to the most effective means for generating revenue from
services such as mobile search as existing formats built upon Internet
services may not necessarily prove effective on the mobile platform. “There
needs to be an effective business model in place to accelerate the adoption
of mobile search,” states Cutler. AskMeNow, while offering a free version
of its search service, is also pursuing a per-use revenue model through the
Company’s AskMeAnything service targeted towards users (small fee of
.49˘ per question) who prefer to ask questions not available under their
standard formatted questions. “We have an interesting revenue model that
will create ongoing transactional revenue for the carriers to share in
through our AskMeAnything feature, which based on beta testing is a
fee-per-use service that consumers are interested in using,” describes
Cohen.
Mobile Advertising:
For
companies such as Yahoo and Google with a significant focus on revenue from
advertisements retrieved via web searches in the traditional sense, mobile
advertising presents significant challenges to this business model. With
limited screen size, and thousands of advertisers, a shift in how ads are
integrated and targeted is inevitable in order to take advantage of this
arena.
Companies that are developing the business model around the mobile arena are
seeing value in alternative options for advertisers to solicit customers
through search results. “We are building a database of customers that have
toll-free or call through capability provided through our search results and
accessed with a simple click on your device. We have created a mechanism
that will allow local advertisers to advertise with us very economically and
be able to share all of their pertinent information with our end-users
without our end-users having to access or search for them on the Internet.
We use the Internet as a mechanism for bringing you the information, but we
don’t make users go onto the Internet to obtain their answers. We give you
an answer that we do not want you to go hunting for; instead the answer will
open up right in front of you on your screen,” explains Cohen
As industry players
focus in on mobile advertising that is relevant and suitable to wireless
users, Cohen explains that there is considerable opportunity in local search
utilizing the sense of urgency that is more prevalent in mobile device usage
versus traditional Internet use. “It is not about finding the location of a
business that you already know; it's about taking advantage of an offering
from that business when you are interested. For example if you need a
prescription filled, you are leaving your office and want to order ahead to
your pharmacy to be able to pick it up on the way home. First you will want
to know the pharmacy in your area that has the cheapest price, then you can
choose which pharmacy to order your prescription from, all made possible
from your handheld device. This will be part of our application in the near
future,” describes Cohen.
Market Drivers:
As the technology for
mobile handsets continues to evolve and the comfort level of mobile users
strengthens, growth in this market will continue. “What broadband has done
for the Internet and advertising, broadband to the handset has the potential
to be the driving force behind the growth of this arena,” describes Bruce
Smith, VP, Investor Relations and Strategic
Development for Answers Corporation.
Examples
of technology driving the market and the revenue potential of mobile
services can be seen in Japan, a nation with
89 million cellphone
subscribers (75% of population over 15 years of age) out of which 77 million
have data service accounts. “There clearly is a market available for
advertisers as well as user services. Cell
phones have become a complete consumer electronic entertainment device
serving as a PDA, messaging center, entertainment device, and phone. The
cellphone is the one continuous connection. KDDI Corporation (#2 provider
after NTT) has been a driver in pushing 3G (nearly all phones) and now 3.5G
fast speed services. All of which allow for more types of services, faster
downloads so you aren't waiting for advertising. They have also driven data
service, photo exchange usage forward with flat rate plans versus previously
expensive packet charges by NTT Docomo, “discussed Professor Smith.
With
multiple players focusing their efforts on the potential of mobile search
and mobile advertising, within a market that
Juniper Research
forecasts as reaching 2.7 billion worldwide subscribers by 2010,
the
opportunities to service this growing population appear lucrative. As
described by Juniper Research, “Increased sales of handsets and higher
Average Revenue per User from data services will come primarily from the
ability to provide easy-to-use and intuitive/dynamic services that customers
can both understand and manage, or, better still, that manage themselves
contextually.”
Ann-Marie Fleming
Ann-Marie
Fleming completed her MBA in the United States, where she attended Webster
University. She also holds an Honors B.A from the University of Toronto. She
has over fifteen years of experience within the financial industry to
include retail banking and brokerage, investment banking, and mortgage
brokerage within the United States and Canada, with a firm background in
corporate research.
Disclaimer:
www.InvestorIdeas.com/About/Disclaimer.asp,
©Copyright InvestorIdeas 2005
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