February 04, 2008 | Monday
Microsoft Yahoo - the mobile search dimension
By Matt Brocklehurst, Head of Marketing in Marketing |News |Search Engines |Google |Yahoo |Microsoft
Unless something really big happens, it is safe to say that Microsoft has the Tech Story of the Month title all sewn up with the attempted takeover of Yahoo that it announced on Friday. A bid worth approximately £22.4 billion, the proposed deal sees Microsoft willing to stump up a fair amount of brass in order to take on Google in a race where the stakes grow higher every day.
While it is certainly not the main attraction of the takeover attempt, Microsoft CEO Steve Ballmer mentioned mobile services explicitly in the proposal letter he wrote to the Yahoo board. As Ballmer knows, any deal joining Yahoo and Microsoft’s mobile endeavours could launch a serious challenge to Google.
Estimates project that, over the next five to fifteen years, mobile search could be worth up to £10 billion. Right now, it is a significantly less developed area than the overall online search market. As such, there is much more ground to be gained by Microsoft and Yahoo there, and both companies have been relentless in their mobile efforts over the last several months.
In January 2007, Yahoo launched oneSearch, its mobile search service. OneSearch comes in the form of a downloadable application which the user installs on his or her phone, and gives results from the areas of news, images, sport, events, finance, and business listings for each queried search phrase. Late last year, Yahoo also added Wikipedia and its popular Yahoo Answers to oneSearch’s functionality. Just last month, the beta version of Yahoo Go 3, Yahoo’s dedicated mobile platform, was released for use only on higher end phones such as Apple’s iPhone, Nokia Series 60 handsets, and “select” Windows Mobile devices.
We can expect that range of Windows Mobile phones running Yahoo Go 3 to expand quickly if the Microsoft takeover goes through. Indeed, Microsoft’s stronger ties with mobile operators - especially in the US - is one area where they could be of particular help to Yahoo. For in the US, carriers actively remove Yahoo Go from the 250 or so handsets on which it comes pre-loaded. So American mobile users must just as actively find out about Yahoo Go and then manually download it. This has been a thorn in Yahoo’s side in terms of uptake, to put it mildly, but Microsoft could remove this if the deal goes through: It projects 20 million in Windows Mobile licence sales for 2008, and has its mobile operating system distributed in 55 countries by 160 mobile carriers.
Almost a year ago, Microsoft acquired Tellme Networks - its largest ever private purchase and the fourth largest deal in Microsoft’s corporate history. Tellme provides voice-enabled mobile search, automated directory assistance and enterprise customer service. Indeed, the enterprise side is where Microsoft’s mobile strength seems to lie, with Yahoo being much more developed on the consumer side. If Microsoft integrated Yahoo Go into Windows Mobile, this could give both companies - and especially Microsoft - the boost they need to reach millions more users.
On the other hand, Microsoft has been roundly criticised for failing to maximise the leverage it should have got out of Motion Bridge, an acclaimed mobile search provider it acquired almost two years ago. That move has been described as a desperation-driven purchase that amounted to Microsoft “killing” Motion Bridge - echoing accusations and predictions which have been levelled against the Yahoo acquisition attempt in recent days.
Meanwhile, Google’s forays into mobile have been a mixture of rumour, speculation, and actual services. The long-fabled Google phone may or may not (smart money is on not) come to fruition, but its mobile operating service Android will give Microsoft and Yahoo a run for their money. The search giant has already made swift and steady progress in engaging users on mobile, through local search (via mobile web and SMS), maps, and even AdWords.
In the US, Google also plans to bid on upcoming wireless spectrum auctions, and has taken a robust and active interest in how American regulators will carry out those auctions, eager to ensure that its content will make its way quickly and without trouble to users’ phones. That content includes YouTube videos. Just last month, Google upgraded its YouTube Mobile to allow users to download any YouTube video, and added all of the features they know from the website.
Just the other week at the World Economic Forum in Davos, Google CEO Eric Schmidt was not shy in his proclamations about the potential for a “huge revolution” with fully mobile services online, likening it in impact to a “re-creation of the internet”.
It’s a revolution whose leader has yet to be anointed, and the crown is definitely up for grabs. That’s exactly what Microsoft - a company that gave Google a jump start on the web by underestimating the internet’s potential during its earliest years - is betting on.
This blog is also posted at http://www.mobilemarketingmagazine.com
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