[Infowarrior] - Mobile giants plot secret rival to Google

[Richard Forno]

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/02/04/cnsearch04
.xml

Mobile giants plot secret rival to Google

By Juliette Garside, Sunday Telegraph
Last Updated: 8:18pm GMT 04/02/2007

Europe's biggest telecoms groups are aiming to create a mobile phone search
engine that could challenge Yahoo! and Google, the US giants.

Vodafone, France Telecom, Telefonica, Deutsche Telekom, Hutchison Whampoa,
Telecom Italia and one American network, Cingular, are among the companies
that will come together for secret, high-level talks at the mobile
industry's biggest annual trade show in Barcelona next week.
     
3G World Congress billboard, mobile phone search engine
Declining call revenues are driving network operators together to compete
against Google and Yahoo! search engines

Faced with declining revenues as calls become cheaper, network operators are
determined to secure a large slice of the lucrative search advertising
market.

In the UK alone, more than 20 per cent of subscribers are expected to have
access to mobile internet at broadband speeds by the end of 2007, which
should prompt a dramatic increase in the use of search engines via mobile
phones.

The initiative will come as a surprise to Google and Yahoo!, which have lost
no time in striking deals with mobile operators and handset makers. But the
mobile industry believes it can retain a greater share of advertising
revenues by developing its own service.

A joint approach is essential, because mobile networks will need to offer
advertisers a large audience if they are to challenge the US search giants.
The four big operators in Britain - Orange, owned by France Telecom, O2,
part of Spain's Telefonica, Deutsche Telekom's T-Mobile and Vodafone - will
all be represented at the meeting next week. The groups involved have a
combined customer base of 600m mobile phone users worldwide.
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The networks may decide to go with an existing search engine and use their
combined might to secure a majority slice of the income. Another idea up for
discussion is the creation of a white label service, with a single
advertising sales house and technical team, to which mobile networks could
then apply their own brand.

A UK executive at one of the companies involved said: "There is a big play
in mobile search that we need to be part of, and we are exploring those
options at a very high level."

It is not clear what the implications are for existing deals between
networks and the big US search companies. Google has already signed up
Vodafone and T-Mobile, as well as Hutchison's 3 and China Mobile. Its
service also comes pre-loaded on handsets made by companies including
Samsung. The Google mobile search engine does not make money because it
hasn't started selling sponsored links to advertisers. However, trials are
underway and the service should become fully commercial this year.

Yahoo! has so far signed up Vodafone and 3, and is already featuring
sponsored links. Mobile search is seen as potentially more valuable to users
and advertisers than the service currently provided to desktop computers
because results can be made geographically relevant.

On Yahoo!'s service, for example, users can type in their location and
receive local information on weather, travel or entertainment.

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.