NeoMedia Technologies, Inc (NEOM)

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DD Searching for the Google of cell phones

Can startups like 4Info and Promptu challenge the Web search giants in the mobile market?

By Patrick Baltatzis, Business 2.0 Magazine reporter
May 30, 2006: 1:36 PM EDT

http://money.cnn.com/2006/05/30/technology/business2_thirdscreen0530/index.htm


SAN FRANCISCO (Business 2.0 Magazine) - On the Web, Google may have search all wrapped up. But search on cell phones is still a wide-open, fast-growing field that some startups think will make a good business.

There are plenty of reasons to be skeptical. For one, there's the state of Web access on cell phones. If you were using the Internet a decade ago, the mobile Web today looks familiar: Small screens, slow processors, and spotty network connections make it a less-than-ideal experience.

Going from the rich experience of the Web on a computer to the limited Web capabilities of cell phones, feels like "we have regressed," says Lisa Wehr, president of Oneupweb, a search-engine marketing company which has advised some clients on how to capitalize on mobile search.

But a keen understanding of that less-than-ideal environment may just be what gives startups the edge over the search giants.

"We think that pure plays will pose a real challenge to the likes of Google and Yahoo," says Jaimee Minney, a spokesperson for research firm M:Metrics.

Answers, not links
While Google and Yahoo are trying to extend their Web search engines into the wireless world, mobile search startups like 4Info and Promptu are trying to make the most of what people use cell phones for today -- voice calls and text messages.

4Info, a Palo Alto, Calif. startup, is aiming to popularize text messaging as a way to search the Web, presuming that cell-phone users want quick answers rather than page after page of search results. By sending text messages to 4Info's designated shortcode -- an abbreviated phone number used for information services -- users can receive sports scores, weather reports, flight information, and even package-tracking data. 4Info plans to sell keyword-related advertising, and has struck a deal with Gannett (Research) to promote its text-message services in the pages of USA Today.

"People want answers, not links," says Amol Joshi, 4info's senior vice president for business operations. "Google has the disadvantage of being a Web search firm."

Promptu, a six-year-old, privately held company based in Menlo Park, Calif., is taking advantage of the fact that phones are mostly used for voice calls, by creating voice-recognition systems that search for content. It plans to sell its service to wireless carriers, to make it easier to search their libraries of content, like ringtones, wallpaper images, and games.

"The more content that carriers can provide to their users the better it is, but adding another title to their catalogue is also adding to user frustration, since scrolling through the catalogs is getting harder," says Brady Bruce, senior vice president at Promptu. "With voice search, the whole process is much faster." The company is hoping to deploy its first system early next year.

Even with these innovative ideas, Google (Research) and Yahoo (Research) are casting a shadow over startups in more ways than one. Both are adapting their services to the wireless Web, employing text-message search similar to 4Info's.

And even though 4Info and Promptu have both attracted venture-capital financing, some investors remain skeptical of the prospect of funding a competitor to Google or Yahoo. Maha Ibrahim, general partner at venture capital firm Canaan Partners, says she's been pitched by several mobile-search companies, but didn't think much of their business models.

"Interesting companies to us are those that can drive a lot of revenue to carriers," says Ibrahim. (Carriers, sensibly, want to promote wireless applications that encourage customers to use more of their voice and data services.)

"So far we've only seen straight search companies with ad revenue models and that will not do it," she explains. "We're waiting for a killer app in mobile search."

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