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August 28, 2006

Who Will Win the Race for Mobile Content?

The next big broadband frontier is clearly the mobile broadband market. The transformation of cell phones into complete consumer electronic devices, coupled with the rapid raise of high-speed wireless data networks, is opening up a wide array of new services that create value for consumers.

Globally, the mobile broadband market is already well advanced. Japan has about 89 million telephone subscribers, 77 million of which have data service accounts, and Europe is only slightly behind. North America, however, lags way behind, with only 12 percent of subscribers downloading content. And most of that is ring tones and simple graphics.

Despite its popularity overseas, the broadband market won’t really take off in North America until it offers more meaningful and valuable content for consumers. Getting weather reports and movie trailers on your mobile phones just doesn’t create that much value. And so far, accessing the Internet over today’s “smart” phones is an arduous task. There are too many clicks and too many screen formatting problems to make it a truly useful tool.

A Dark Horse

Who will leap to the forefront in the mobile broadband space?

At the moment, I don’t see any clear front runners. Most industry analysts expect Internet giants like Google, Yahoo and Microsoft or media giants like Disney, Fox and the other major TV outlets and movie studios to figure it out. However, I’m betting on a little known company called InfoSpace. Why? Because the big content providers are going in the wrong direction. They’re treating the mobile platform as a smaller version of the desktop platform, when that’s not what the market wants.

Mobile users don’t want a bunch of links, they want answers, and InfoSpace has just released a spate of products that provide them. These products instantly identify where the user is located (the real missing link in most competitive offerings) and give immediate access to extensive online directories. On another competitive front, InfoSpace’s acquisition of three mobile games companies -- Atlas Mobile, IOMO Limited and Elkware GmbH -- positions it a leader in the rapidly growing mobile games market.

While InfoSpace is relatively unknown to most consumers, it has a solid reputation in the search engine and mobile categories. It already provides services and content to every major carrier in the United States including T-Mobile, Cingular, Verizon, Alltell, Vodaphone, Orange, Telefonica and O2. If you have a cell phone, you probably already have access to InfoSpace’s content because it reaches 90 percent of U.S. mobile customers and provides over half of the content sold today in North America.

Local Searches Lead the Way

InfoSpace recently demonstrated its abilities in the mobile Web. Its mobile services platform is driving Cingular’s new and improved Media Net, which allows users to create a home page on their screen that offers up to 16 categories including weather, sports, financial information, entertainment news, world news and more. It’s intuitive and easy to use, and puts you just of a couple of clicks away from the information you need.

The mobile Internet is much more about local searches and local needs, regardless of whether you’re hanging out in your local neighborhood or find yourself in some other part of the country in unfamiliar turf. The big question is, “Who’s going to pay for the local information?” Nobody believes it can work like pay-per-click on the Internet. Instead, it’s much more likely that local search activities will be paid for by local companies who advertise their products, services or locations.

Enter InfoSpace’s “pay per call” model, which they will have up and running by the end of the year. While other companies like AOL, Google and Yahoo are still experimenting with this model, InfoSpace will eclipse all of them and offer an outstanding service.

InfoSpace is definitely a company worth watching. I believe it will eventually win the race and dominate the mobile content market, much like Yahoo, Google and MSN have come to dominate the desktop Internet market.

Posted by Rod Whitson at 12:01 AM | Permalink | Comments (1) | TrackBacks (0)

August 5, 2006

Can Anybody Beat Out Google in the Internet Search Business?

In the world of search engines, Google is easily the 800-lb. gorilla.

According to SearchEngineWatch.com, in November 2005 Google captured 46.3 percent of all searches. Yahoo came in second, with 23.4 percent, less than half of Google’s share. And MSN came in third with a paltry 11.4 percent.

The pie chart below illustrates an interesting pattern. In many markets, the dominant competitor holds about a 50 percent market share, the number two competitor manages to squeeze out 25 percent of the market, and all the other competitors fight over the remaining 25 percent.

This pattern repeats itself in so many markets it’s almost as dependable as the law of gravity. Even more important is the fact that almost all of the industry’ profits go to the top competitors. That’s why Jack Welch’s now infamous strategy at GE of becoming the number one or number two competitor or else exiting the market has proven to be so powerful.

Given these basic laws, the question then becomes, can anybody beat out Google, or even Yahoo, in the Internet search business? The chart shows eight other competitors in addition to the top two, and there are probably a multitude in the category of “Others.” Some of the competitors like AOL, Netscape, and Earthlink have probably missed their shot at the top rungs on the ladder. But what about the newer competitors My Way, Dogpile and iWon? Do any of them have a realistic shot at ascending to the throne?

Woof, Woof

The most interesting of these relatively new entrants is Dogpile.com. Owned by InfoSpace, Dogpile bills itself as “all of the best search engines piled into one.” A metasearch engine (meaning a more comprehensive search engine), Dogpile includes results from Google, Yahoo, MSN search and Ask Jeeves. A single search query returns the top results from all four of these popular search engines.

Dogpile is clearly a superior product that produces superior search results. More important, it leverages off the simple fact that only three percent of first-page results are shared by Google, Yahoo and MSN. As a result, searchers get almost no overlap of the very best search results from the most popular search engines. In order to get the same “best of the best,” you would need to do three searches on the three separate leading search engines, which is exactly what happens at Dogpile.

This begs an obvious question -- does anybody really need the results from four search engines?

The answer is yes, if you want the most through and complete search on a topic that matters to you. Plus, Dogpile search results are infinitely more usable. Instead of page after page of links of somewhat questionable value, Dogpile returns 10 to 100 links that are extremely relevant and dead-on accurate. Of all the top search engines, Dogpile clearly offers “best of breed” search results (pun intended). After five or six searches, you’ll never go back to your old method of searching.

Little Dog Versus Big Dog

Can Dogpile beat out Google for the top search engine spot?

According to mindshare branding experts Ries and Trout, Dogpile doesn’t stand a chance of displacing the competitors in the category of Internet search. In their book the 22 Immutable Laws of Marketing, Law # 1 (Leadership) states: “It’s always better to be first to market rather than waiting to get to market with a better product.” There is always a significant first-mover advantage in business, but this is particularly true in marketing. It’s much easier to get into the mind first than convince a prospect that you have a better product than the one that got there first.

The reasons for this are twofold. One, people naturally tend to stick with what they already have. This says that most people will just keep using Google out of habit. Two, the first brand to market generally has an opportunity to become a generic term for that product category, making it even harder for competitors to gain a foothold. When you hear somebody say, “I Googled it,” you know exactly what they mean. I have yet to hear anyone say, “I Dogpiled it.” Or even, “I Yahooed it.” Clearly, Google has become the generic term for the category of “search engine.”

Yet, there is hope for Dogpile. Ries and Trout’s Law # 2 (The Category) states: If it’s impossible to be first in a category, invent a new category you can be first to the market in.” Dogpile can own the subcategory “metasearch engine,” which even sounds bigger and better.

Dogpile might not be able to beat Google or Yahoo at their own game. But if they play their cards right, they can own their own subcategory -- metasearch engine -- and achieve market leadership over the long-term.

Posted by Rod Whitson at 9:58 PM | Permalink | Comments (2) | TrackBacks (0)