Mobile phones offer plenty more than just voice these days. They can provide news, video clips, local weather and even restaurant recommendations.
Problem is, many customers can't figure out how to access all that information. That's where companies like Google and Yahoo, along with a slew of start-ups such as InfoSpace, JumpTap and Medio, see a big opportunity. These companies are developing tools that allow users to search for content. And they're starting to test search-based advertising to help generate revenue.
"When there were only 10 ring tones and a handful of other sites on the carrier deck it was simple," said Iain Gillott, an analyst with iGillott Research. "But now there's 10,000 ring tones and it's really hard to find what you want. It's like walking into Wal-Mart with only the aisle numbers to guide you to what you want to buy."
Mobile search and the advertising business models that have been proposed to support the service are sure to be hot topics discussed during the Cellular Telecommunications & Internet Association's (CTIA) semiannual trade show here in Los Angeles this week. The CTIA Wireless I.T. & Entertainment show begins Tuesday and runs through Thursday at the Los Angeles Convention Center.
As revenue from their voice services continues to decline amid pricing pressure, mobile operators are counting on mobile video, music downloads and other data services to make up the revenue difference. But so far, most of the 190 million wireless subscribers in the United States have not downloaded content onto their phones or surfed the mobile Internet looking for content.
Mobile tracking firm M:Metrics said that only about 15 percent of U.S. wireless subscribers, or about 28 million people, downloaded some type of multimedia content during a three-month period that ended in July. And the Yankee Group estimates only 18 percent of wireless users in the U.S. have even tried surfing mobile Internet, with 6 percent saying they consider themselves regular mobile Internet users.
There are likely many reasons that explain why American wireless subscribers aren't downloading content and surfing the mobile Internet. The services and content may be priced too high. Users may be uncomfortable with the small form factor on the phone. Some experts also believe that people simply cannot find the content they're looking for quickly.
"Surfing the mobile Internet is still hard," said Eric McCabe, vice president of marketing for JumpTap. "The wired Internet didn't really start to explode until search tools like Google made it much easier to find things online."
Experts warn that creating search applications for mobile devices is completely different from creating them for the PC. Smaller screens, rudimentary navigation tools and tiny keypads not optimized for typing all make mobile search very different from its wired equivalent.
Users are also more impatient when they're using their mobile device to access information than when they're sitting in front of a PC. They don't want to wait for screen downloads, and they aren't willing to look through dozens of search results on multiple pages to find what they want.
Controlling the content
But the biggest challenge for mobile search is likely not the technology but figuring out an appropriate business model. In contrast with the wired Web, in the wireless world the operators themselves control what content users can access.
Most mobile operators offer subscribers a menu or "deck" filled with the carriers' own content that has been supplied through deals they have made with news organizations, record labels, TV networks and other content producers. Carriers generate revenue by charging for subscriptions to packages or premium content. They also get a cut of revenue when users download content from their decks.
Some carriers allow subscribers to leave their decks to surf the mobile Internet and purchase content, but they still control access to outside content.
"At the end of the day, the carriers make the business decisions," Gillott said. "Some will continue to be very restrictive and others will be more open to accommodating outside content and outside brands."
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