Investor's Business Daily, March 20th, 2007
If the mobile Web ad market ever takes off, Google and Yahoo are poised to cash in.
On the heels of a new study that predicts more consumers will surf the Web on wireless devices this year, executives at Google GOOG and Yahoo YHOO say they are making mobile programs a top priority.
Nearly 20% of all mobile users worldwide say they plan to spend more time using the Web with wireless devices this year, according to a survey commissioned by the Online Publishers Association. The study interviewed more than 6,000 people in the U.S., the U.K., France, Italy, Spain and Germany.
With more cell phones being sold with cameras and other Web features, it's not surprising that consumers are ready to make more use of the devices, says Pam Horan, the trade group's president.
"This is demonstrating the fact that we are at the early stage of this platform and the fact that there is a big opportunity," she said.
Mobile-Web Usage Low
About 76% of consumers in the U.S. and Western Europe can access the Web on their mobile devices, though only about a third of them are doing so.
Even so, consumers who access the wireless Web are clicking on ads and buying products and services. Such activities will likely catch on with more users, says Horan.
"It shows that we will see increased mobile use in 2007 and beyond," she said.
Web firms are counting on it.
On Tuesday, No. 1 Web portal Yahoo said a mobile version of its search service is now available on more than 100 million wireless phones, or 85% of those in the U.S. It also recently launched its display ad service on mobile devices in 19 countries.
Google has paired with Vodafone Group VOD and Nokia NOK to bring mapping and video services to those companies' mobile devices.
The mobile Web is in its infancy, but Yahoo is wasting no time preparing for it, Yahoo CEO Terry Semel said during a Morgan Stanley technology conference this month.
"Wireless and connectivity is right on the top of our radar, and it's something that we focus on every single day," he said.
The global Internet ad market is expected to rise to $50 billion by 2010 from $30 billion this year. Yahoo's Semel says a growing share of it will involve mobile phone ads.
"That's a gigantic pot, and we think we will be one of those major people able to compete for that pot and that extra $20 billion on top," he said.
The wireless explosion isn't lost on Google, said the search king's CEO, Eric Schmidt, at the Bear Stearns 20th annual media conference this month.
"There are roughly 2 billion mobile phones worldwide," he said. "It took 20 years to get the first 1 billion in place and it took four years to get the second billion. Roughly half of the world's population will have mobile phones by 2009 or 2010."
In its survey, OPA found that 70% of mobile users in the U.S. used Web-enabled devices to check weather reports. Sixty percent used them to get sports news and scores. About a third checked stock prices.
"What we are able to start to understand is people are recognizing and wanting this as a connection point 15 information," Horan said.
In the U.S., 24% of those surveyed said they have paid to get technology news on their mobile devices. In Europe, 16% said they paid to get sports highlights and scores.
Ads Gaining Traction
Ads also seem to be gaining traction on mobile devices.
The survey found 23% of mobile users worldwide went to a Web site after seeing a mobile Web ad. Of those, 13% requested more information about a product, and 9% made a purchase with a mobile device.
"Although these percentages are small, it's demonstrating the fact that people are taking action upon seeing ads," Horan said.
While speaking at the Bear Stearns conference, Schmidt theorized that a consumer walking on a city street could one day see an ad on a mobile device for a pizza restaurant that happens to be nearby.
Such targeted ads would be much more valuable than traditional media ads, he said.
"The ads (in a newspaper) just don't work that well compared to a targeted ad," he said. "On the other hand with a phone, it's a highly personalized device that knows where it is."
Copyright 2007 Investor's Business Daily, Inc.
