Add to del.icio.us     Digg this

February 20, 2007

While mobile phone users may still say they're going to "Google" something on the Internet, there's a good chance the search engine giant may not even be involved, since Medio Systems, a four-year-old startup is quietly powering the default search feature on many cell phones from Verizon, T-Mobile and Amp'd Mobile services, among others.

Overall, the emergence of Web-connected mobile phones, or what's commonly referred to as the Mobile Web, is converting the wireless search business into something that is getting harder to predict.

Unlike its dominant role as an efficient Internet search engine, Google's tiny U.S. lead in search via mobile phones is anything but solid.

According to M:Metrics, a research firm that focuses mostly on the mobile market, the Mountain View, CA. company is the early front-runner in the United States, with Yahoo a very close second.

M:Metrics estimates Google had about 4.75 million U.S. subscribers in the fourth quarter of last year, roughly 1.1 million more than its closest contender, Yahoo.

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

However, Google and Yahoo may not even be the true leaders.

Trouble is, M:Metrics and other researchers don't even track Medio Systems, simply because its search engine is bundled into other wireless carriers' offerings.

Medio Systems CEO and co-founder Brian Lent claims 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.

Independently of who is actually leading at the moment, the mobile search field is still 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," he said.

This is the sole reason why startups and search giants alike have scrambled to come out with the killer app 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.

According to Oppenheimer & Co., a national investment company, global marketing revenue from online search is predicted to reach $27.4 billion in less than three years.

If you take Yahoo as an example, 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 they're on the move.

Yahoo's announcement came on the same day that the company officially added LG Electronics to a list of partnerships with mobile device manufacturers including Motorola, Samsung, Nokia and BlackBerry-maker Research in Motion.

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.

For instance, a person who looks up New York City will not just see links to pages with the words New York City in them, but will see weather, news along with other information about New York City.

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

There are a couple of major 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.

Most mobile phones have a lot less processing power than newer PCs, and they frequently have a lot slower Web connections than broadband users are accustomed to. On top of all that, they often lack the kind of keyboards that allow for fast typing.

These important factors, coupled with the fact that on-the-go users want their information even faster than they do when surfing the Internet with 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 strong 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.

"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.

But Google has designed its mobile search product to deliver results more relevant to individual users.

Earlier in February, Google began a U.S. trial to offer 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.

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.

After all, wireless carriers influence, if not outright determine, which search service comes shipped with their mobile phones.

Assev added "the best search product in the future will be the one that is able to generate the most revenues for its partners."

Add to del.icio.us     Digg this

Source: Business Week