Monday 5 February 2007 — Posted by Tom @ 10:49 am
As more and more mobile phones are equipped with Internet access, there will be an increasing amount of money to be made from the advertising on mobile phone search engines.
The GSM [Groupe Spéciale Mobile] Association, founded in 1987, is an international trade association with almost 700 members (mobile phone service providers) and nearly 200 associate members (mobile phone manufacturers). The 3GSM World Congress, with 60,000 participants and 1,300 exhibitors, will be held in Barcelona from February 12 to 15. (The fourth annual 3GSM World Congress Asia will be held in Macau in November.)
This year’s congress will include closed-door discussions about the creation of a mobile phone search engine to compete with Google and Yahoo. To remain competitive, mobile phone service providers continue to reduce the cost of calls, which of course means declining revenues. Google and Yahoo have been making deals with mobile phones manufacturers and service providers, but those companies want a significant share of the search advertising revenue.
Google hasn’t started selling sponsored links on its mobile phone service, but that will change later this year. It’s possible, of course, that the discussions in Barcelona will lead to joint negotiations with Google or Yahoo, but it’s also possible that they will decide to create their own mobile phone search.
Juliette Garside of the Sunday Telegraph reported in yesterday’s paper that
Mobile internet will be given a further boost at Barcelona when Far Eastern manufacturer LG Electronics is announced as the winner of a competition to produce an affordable, mass-market handset capable of accessing the web.
Twelve of the leading mobile operators spanning six continents and more than 620m subscribers have agreed to sell the 3G (third generation) phone to their customers. This will allow economies of scale sufficient to bring its price in well below existing 3G handsets.
The deal will also be a massive boost for LG, allowing it to challenge the dominance of the four largest handset makers: Nokia, Sony Ericsson, Siemens and Motorola.
In the event that service providers start getting significant revenue from search services, some are starting to wonder if the cost of mobile phone service will gradually become insignificant. Just as you don’t pay to use Google (their advertisers pay), could competition lead to mobile phone service which is practically free? Stay tuned.