John Battelle's Searchblog

Most of the talk around mobile and location seems to focus on access to business directories.

I think there are some very interesting implications when individuals start to annotate places using location-enabled mobile devices.

Mobile of course will be a core component (even the most important component) of local search, but it is still early days, especially in the US market. In my view, the big question is when and in what form it will come, which depends greatly on the following factors:

1. Penetration of data usage - While readers of your blog are no doubt using smartphones that effortlessly can browser the web (or at least do a Google search), they represent in insignificant minority, and this will not change anytime in the next 3 years. Even here in Europe, generally at least a year ahead of the US in mobile, there is “mobile Internet” usage, but regular users still are under 5% of the userbase.

SMS, on the other hand, does have mass market usage, at least in Europe. Anyone (and I do mean anyone) can compose a message like “Italian restaurant Camden,” and do it faster than even loading their mobile browser.

For this reason, SMS business searches are tremendously popular; for instance, Norway, with a population of less than 4 million people, generates 2 million SMS directory assistance requests per month.

The US is still lagging, but there signs (Google’s service among them) that SMS may have turned the corner in the US. We estimate potential market size could be in the region of 20 million SMS searches a month (if the marketing equation I describe below is put into place).

2. Revenue models – For the reasons explained below, real revenue models need to be in place. AdSense/AdWords is great for online, but click- or impression-oriented billing models really won’t work on mobile. There are some interesting things going on in this space now, but right now sustainable, ad supported services are nowhere on the horizon.

SMS has the potential to offer a user-generated revenue model, now that premium SMS charges are becoming accessible in the US. Google has chosen not to use premium billing, which no doubt will make it somewhat more difficult (but far from impossible) to monetize with user-generated revenue.

The reason that the above two items are so critical is that the only way to create serious mass-market usage for these services is to aggressively market them (and for people to then adopt them). SMS directory enquiries services have boomed in Europe because they offer a simple marketing equation: spend x on marketing, get back x + y in 4-5 months, and an additional z each and every month thereafter.

Already in the US, these services already do exist in some form or another (a few operators offer un-marketed, user-unfriendly services); but for them to truly succeed as they can, the services must be marketed widely, not just put in a subscriber newsletter.

For the near future, I believe using the premium SMS equation offers the best way to bring mobile, local services to the mass market. And until they reach mass market status, there will be no development in the wireless location-based ad space – it is hard enough convincing small local businesses to use online PPC marketing.

One day Blogger will have Trackback...

Full post:
http://www.buzzhit.com/2004/10/social-mobile-local-search.html

Snippet:
The next leap, in my mind, is Social Mobile Local Search; interacting with people or places based (in part) on our digital identity/profile (including our social network). Duane Wilson, founder of Totalmass (disclosure: who I know from Ofoto), has been working on a vision he and I share for a several years now. Duane's focus is on Social Mobile, based on Social Agents....

Recent studies show that 105 million of the 200 million American cell phones have text message capability. Moreover, 75% of the marketing messages sent by text are being opened and read. Clearly, this is a great promotional vehicle for the future.