The Mobile Internet Won't Grow Without Effective--And Profitable--Search

When the biggest companies in the mobile phone industry gather this week in Barcelona, Spain, for the 3GSM World Congress, rolling out new phones and services to get customers onto data networks, one question will linger in the background: When will search, that most profitable and powerful tool of the PC-based Web, get serious on mobile devices?

Google and Yahoo are charging hard, along with others including startups, but the business is young enough to be up for grabs. Google and Yahoo often partner with wireless carriers and device makers trying to boost data use. But none of these companies has yet nailed the technology or business model that's going to drive mobile search.

Yahoo is convinced it knows where the profit will come from: advertising. The company started experimenting in October with a service that includes sponsored text links from a select group of advertisers on the Yahoo Mobile Web in the United States and the United Kingdom. It followed up with graphical ads, allowing ads to show up as images alongside search terms. Yahoo is partnering with Vodafone in the United Kingdom to serve up mobile ads to subscribers who agree to them, in exchange for lower data-service prices from Vodafone.

Google is testing mobile ads with wireless carriers in 13 countries, including Vodafone in Europe and NTT DoCoMo in Japan. Google gets 99% of its revenue from ads, but it isn't certain they'll be the heart of its mobile business model. "We don't really know what it is because we haven't seen very consistent patterns for how people use cell phones for data," says Deep Nishar, director of product management at Google. Gartner says data services are too expensive for extensive use, and ad revenue for mobile search is almost nonexistent, since wireless carriers mostly offer search as an added attraction.

Cell phone users have two mobile search options today, Gartner says. One is WAP portals or downloadable software clients from Google, Yahoo, and Microsoft, which offer results that largely are scaled-down versions of Internet content. The other is mobile search engines designed specifically for cell phones and integrated into wireless carriers' portals. They typically address cell phone limitations, such as reducing the number of keystrokes needed to enter a query.With the mobile search market nascent, competitors see an opportunity to keep Google and Yahoo from repeating their PC dominance. Nokia last week said it would add to its mobile search software the ability to search data such as e-mails or text messages stored on a device. A range of startups are tackling mobile search, including Taptu, a U.K. company with plans to debut a mobile search service this year that returns only search results that can be viewed on a cell phone. Amp'd Mobile, a youth-focused Mobile Virtual Network Operator, last week partnered with Medio Systems, a provider of mobile search and advertising, for a search tool to find content with fewer keystrokes.

Data Driven
The 3GSM World Congress will have a heavy emphasis on getting people connected to the mobile Internet. Hewlett-Packard will show its new iPaq dual-mode smartphone, which can use Wi-Fi or cellular and runs the new Windows Mobile 6.0 operating system with an improved Internet Explorer browser. Dual-mode's important, since Wi-Fi can mean a faster and more reliable connection for Internet browsing than cellular. HP says it had services like mobile search in mind with its smartphone.

Wireless providers, too, are desperate to get customers hooked on mobile data to ensure future growth. Vodafone last week inked deals to provide mobile-optimized versions of MySpace and eBay for its subscribers. Nokia offered a free mapping tool for some handhelds. They're interesting tools, and count on more geared to getting mobile users connected to the Internet. The mobile Internet won't get very far, however, without effective mobile search.