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Big Money in Little Screens
Searching the Web on a mobile phone has been a lot like getting online via dial-up modem circa 1995: slow, tedious and not terribly useful. Typing on tiny buttons, squinting at a list of links and clicking through to a page that won’t display properly is enough to test anyone’s patience.
But that is beginning to change. Google, Microsoft and Yahoo have all trained their sights on cellphones, which they see as the next great battleground in the Internet search wars. They have thrown tens of millions of dollars and armies of programmers at the problem, seeking to develop tools that people on the move can actually use.
In recent months, the three search giants have introduced a new breed of search services that emphasize quick answers to urgent questions: Where is the best local pizzeria? How did the Yankees do against the A’s? What’s the fastest way to get to the airport?
The services are beginning to carry small ads related to searches like those that have turned desktop Internet search into a gold mine.
“The biggest growth areas are clearly going to be in the mobile space,” Eric E. Schmidt, chief executive of Google, said when asked about new opportunities at a conference here this week. In case his point wasn’t clear, Mr. Schmidt drove it home: “Mobile, mobile, mobile.”
The new offerings from the search companies are just the beginning. Search services that pinpoint a phone’s location using the Global Positioning System or that accept voice commands are coming out of the labs. Google has gone so far as to build a prototype phone with its own software inside, according to one person who has seen it.
But between the search giants and phone users stand some powerful gatekeepers — cellphone carriers like Cingular, Sprint and Verizon. On the PC, Web surfers can easily go to the search engine of their choice, but this takes longer on a cellphone. Carriers have the ability to dictate which search engine is easy to access and which is not through placement in their phones’ menus.
“Search will be even more of a choke point on the mobile device than on the PC because navigation is so hard,” said Marco Boerries, the senior vice president in charge of Yahoo’s wireless efforts.
After spending billions of dollars building wireless networks, building relationships with consumers and subsidizing the cost of phones, the last thing carriers want is to miss out on profits from the mobile search business. By and large, they have been eyeing the major search engines with a bit of foreboding.
“In the U.S., the carriers have complete authority over what happens on the phone,” said Sam Jadallah, a venture capitalist who has invested in mobile phone technology start-ups. For the nation’s wireless carriers, Google, Yahoo and Microsoft “are much bigger threats than they are partners,” he added.
The tension between the two sides is reflected in the scarcity of major alliances between carriers and big-name search companies. Among the big American cellphone operators, only Sprint has a wide-ranging partnership with a top search provider, Microsoft. Most other large carriers are working with small technology companies that offer generic search services, which the carriers can stamp with their own brand.
One exception to the usual rules in the United States market is the iPhone from Apple Inc. , which is due out in June and will work only over the Cingular network, now solely owned by AT&T. Apple had the clout to choose its own partners to provide software and services for the phone: Google for mapping, Yahoo for e-mail and both companies for search. A Cingular spokesman declined to discuss the company’s search strategy.
There is plenty at stake in the mobile search market, which some analysts predict could grow to be even bigger than the desktop variety. There are far more cellphones in the world than there are computers. What’s more, consumers on the go are often searching for information — a restaurant, movie listings, a store — that could result in a transaction, making them attractive targets for advertisers.
Mobile phones are also linked to a single person, and their location can be tracked, potentially allowing advertisers to deliver highly focused messages — and pay a premium for the privilege of doing so.


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Monday, April 30th, 2007 at 1:09 pm under

