If the name RadioVoodoo rings a bell, you're among a few people who can hark back to 2002 when the VoiceXML was young and many a true believer (yours truly included) thought a "voice Web" would evolve in parallel with the decidedly desk-bound World Wide Web. In the ensuing years RadioVoodoo evolved into VoodooVox and the community of Voice Web proponents expanded to include Softbank Capital, Apax Partners, Village Ventures, and Steamboat Ventures (which is the Disney Company's venture capital arm).
The company's secret sauce is a proprietary registry of wireless phone subscribers that crosses the boundary among many carriers and includes demographic details on more than 1.2 million people. According to a report in Red Herring, that makes it one of the largest national cell phone demographic databases of its kind. It certainly was large enough to attract a new round of $8.1 million in financing from Softbank Capital, which sees ingress to ad supported services to a new generation of telephones - including Apple's iPhone and Google's much anticipated gPhone.
North Adams, MA, is not normally thought of as a media capital, but this is the era of Thomas Friedman's "flat earth". Five years of aggregating phone calls and cementing relationships with media companies - including Sirius, Clear Channel, Univision, Emmis, MTV and other old guard media - has attracted sufficient attention for the investment community to recognize that mobile ad insertion is a cost-effective advertising medium. It is only a short step from intelligent targeted ad insertion to highly targeted, ad-supported mobile search.
In October, the online retailer Amazon.com will unveil the Kindle, an electronic book reader that has been the subject of industry speculation for a year, according to several people who have tried the device and are familiar with Amazonâ€™s plans. The Kindle will be priced at $400 to $500 and will wirelessly connect to an e-book store on Amazonâ€™s site.
That is a significant advance over older e-book devices, which must be connected to a computer to download books or articles.
What's interesting to me is the potential for these readers to become Internet access devices and offer a better, desktop-like experience to mobile users. I'm making several leaps but it's not unlike the iPod Touch. The problem is inconsistent and expensive public WiFi; if the "free WiFi" infrastructure were really built out these devices would be viable as alternatives to smartphones. But that still needs to happen.
San Francisco's stalled process to build muni-WiFi with Google and Earthlink may be a metaphor for the entire muni-WiFi industry. I hope, however, that it is not.
Apple put out a press release this morning that says the company has sold it's one-millionth iPhone. While angering early adopters and investors with its recent price cut, expect that price cut to continue to build momentum for the device (recently joined by the WiFi, non-phone iTouch):
Apple today announced it sold its one millionth iPhone yesterday, just 74 days after its introduction on June 29. iPhone combines three devices into one -- a mobile phone, a widescreen iPod, and the best mobile Internet device ever -- all based on Apple's revolutionary multi-touch interface and pioneering software that allows users to control iPhone with just a tap, flick or pinch of their fingers.
A deficiency in the iPhone, beyond the slow AT&T Edge Network, is the perceived awkwardness of the keyboard: I haven't spent enough time with the iPhone to validate or contradict the claim. But voice would be a good remedy and may well be added officially or unofficially to future versions of the device.
The Kelsey Group released its U.S. mobile forecast saying that "U.S. mobile search advertising revenues to grow from $33.2 million in 2007 to $1.4 billion in 2012, representing a compound annual growth rate (CAGR) of 112 percent."
These figures include the firm's relatively bearish estimate of ad-supported directory assistance revenues. Depending on one's perspective this $1.4 billion number could either be seen as bearish or simply cautious, based on a skeptical view of how fast mobile advertising will kick in.
Here are some of the other numbers already in the market:
This is just a smattering; there are numerous others.
The challenge here, as with local search forecasting more generally, is what are the definitions behing used? There's also a good deal of confusion and conflation swirling around various revenue models and segments in mobile: carrier revenues and subscriber pays vs. ad-supported models. And right now what users are willing to pay for vs. what can be subsidized or successfully supported by ads is not entirely clear.
But in mobile growth assumptions (especially around usage) are also critical, given the early stage of the advertising market. Virtually all the forecasts out include different definitions and are scoped differently -- making it challenging to assess these forecasts side-by-side.
Local Mobile Search will be adding its assessment of the outlook for local mobile advertising and we'll try to be very clear about all these things. We've been chewing on and testing our assumptions for several months. We're bullish on the opportunity but the market is complex and there are a number of wild cards in play.
To put some of these mobile figures in local perspective, Veronis Suhler Stevenson (VSS) put total local online spending by 2011 at $19.2 billion. The VSS forecast didn't include mobile. The question is how much of those local online ad dollars will make their way into mobile distribution?
We're going to try and provide some thoughtful answers ... very soon.
I'm sure you've heard the rumors that Google will be launching a Google branded phone packed with applications into the market sometime soon. While Action Engine can't say whether those rumors are true, as pioneers of the on-device portal market, we can tell you what we think Google has done well with its past mobile offerings and where they could use some improvements - especially if they plan to launch the type of mobile experience that everyone will expect from a power-brand like Google.
Google Mobile: The Hits
The ultimate UI. Google has the simplest user interface on the web. Google Mobile carries on the tradition. The search box is front and center, sitting above links to Gmail and Google Maps, and then allows consumers to tailor their page with as many -- or as few -- additional services as desired, e.g. news, weather, stocks, etc. Everything is Web-based, so the standard network delays remain an issue, but the stark simplicity of the presentation is appreciated by today's harried mass market consumer.
Advertising removes barriers. Google's Internet business model has been based on advertising and the mobile phone presents a significant opportunity to expand their advertising revenues by targeting the devices that people carry throughout the day. When it comes to Google's current on-device and mobile Web-based applications, all are advertising-subsidized or simply free, which prevents consumers from having to pay yet another subscription fee. In a day when the majority of U.S. wireless consumers don't use any data services beyond SMS, any business model that lowers the barrier to entry for wireless data services usage is a refreshing change.
Simple personalization. A recent London School of Economics report commissioned by handset giant Nokia forecasts personalization and interactivity will emerge as the key drivers behind mobile services uptake. Embracing that message, Google has made personalizing the Google Mobile front page drop-dead simple. When users select weather, they can just enter a zip code and have the weather displayed as an integral part of the front page.
Search results. Once personalized with a location, Google Mobile uses the information when returning search results. Users first get local results, then images, then web results. Clearly, Google understands that local search is critical in the mobile environment and presentation of the search results must be formatted to overcome the limitations of the mobile form factor.
Google Mobile: The Misses
While we love Google's simplicity, personalization and mobile advertising focus, so far their mobile solutions haven't stood out from their competitor's offerings. In fact, one could argue that the recent on-device portals presented by Yahoo! Go and Apple's iPhone far surpass any mobile services Google has presented. Here's where Google Mobile falls short:
Disjointed strategy. To the external viewer, Google can't seem to make their mind up on mobile. Google Mobile is all Web-based which has inherent network reliability issues. Then they have one or two standalone downloadable applications, like Maps and Gmail. The loose packaging of standalone applications prevents users from easily toggling and sharing information among the various Google services.
Limited device support. Technically, the Google Mobile Web page should work on any device. The same can't be said for Gmail and Google Maps. Limiting mass market device support ultimately limits monetization options.
Poor navigation. Yes, the Google Mobile front page is simple, but it gets crowded fast. By making it simple to add content to the front page, Google makes it easy to clog the front page with content. And that makes it difficult to navigate the front page as each choice gets appended below previous choices.
No multimedia content. Google Mobile doesn't support streaming multimedia. Yet Google Mobile search results may point to streaming multimedia on web sites not optimized for mobile. Users who click on such a link are in for long, slow ride.
Google Mobile: The Bottom Line
Google is experimenting in Japan with video and other applications and, if the rumors are true, they are investing roughly $8 billion on the Google phone which could change the landscape for mobile. According to a recent article in the Wall Street Journal, "Google even envisions a phone service one day that is free of monthly subscription charges and supported entirely through ad revenue." However, to date, the company continues to take a slow and steady approach to mobile applications, which reflects an understanding of two key lessons learned by on-device portal companies:
First, when a company fails to deliver a superior user experience, customers won't use its applications. Period.
Second, once a company creates a superior mobile user experience they need to figure out a way to distribute it to as many consumers as possible. Google's focus on advertising helps remove the price barrier for consumers and is a good first step at promoting mass market adoption of mobile data services.
Next, if they can truly deliver a Google branded phone service that is free of monthly subscription charges and packed with user-friendly mobile applications then they may have all the pieces in place to change the face of mobile forever. Until then, we will wait and see how they balance the tricky needs and demands of all the people currently at the mobile applications party including: wireless operators, device manufacturers, content brands, technology vendors, and consumers. Welcome aboard Google! Glad to have ya!
This piece was written by Scott G. Silk, president and CEO of Action Engine. It has not been edited by LMS.
The states covered by the service include Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee. A similar service was introduced earlier this summer in California.
Here's Opus' earlier Speech-Enabled Mobile Search report (for clients), which discusses the evolution of the DA marketplace. Ad supported DA will be a segment in our forthcoming Local Mobile Search forecast report.
Many investors were disappointed by the Apple announcements yesterday. However, the new iPod Touch with WiFi is a very interesting and potentially significant device (I won't say "revolutionary"). It's essentially the iPhone untethered (to AT&T), although it doesn't have a phone. But it has WiFi.
Notwithstanding the proliferation of smartphones among business users, most people don't want to carry bulky devices with them. I happen to have two devices: a mobile phone and a Windows Mobile smartphone for email and mobile Internet use. I don't like it either but my "phone phone" is too small for the mobile Internet and my Windows Mobile phone is bulky and awkward to use as a phone.
Enter the Touch. It's an iPod and has WiFi and a Safari browser. In other words, it takes the elegant Internet browsing capabilities from the iPhone and moves it onto a new device.
While the Touch is not a phone, though it might turn into one eventually via WiFi. It's not unlike the Nokia 770, among a few others, in that regard. And while the Nokia device has little chance of widespread adoption, the iPhone Touch is a different story. It could sell well as a hybrid device, driven by its video, iPod and Internet browsing capabilities.
The Internet experience it offers is substantially better than the majority of WAP experiences and doesn't require a downloaded client. I would expect more iPods in the future to have WiFi and Internet browsing capabilities.
We'll see how well they sell. But if they sell well, they could well become a "second mobile device" that people carry along with their more traditional cellphones.
Related: The Case of the Subpar Cellphone from the NY Times explores why one phone can't be all things to all people.
Yellow pages publisher R.H. Donnelley (RHD) is testing a new voice local mobile search product, 1-800-CallDex, in four U.S. markets: Denver, Phoenix, Spokane (WA) and Tucson. It offers a suite of services powered by CallGenie's Enhanced Voice Directory platform. The company also provides voice search and enhanced DA services to Verizon, Yellow Pages Group (Hello Yellow) and Say Hello. (I mistakenly previously reported that CallGenie was behind category search at 800-Free411. CallGenie never actually provided the service, which is now being provided by Nuance).
Like other offerings from CallGenie, 1-800-CallDex will permit category search in a neighborhood, near and intersection or a landmark. CallGenie-powered Hello Yellow was the flagship product in the free DA or voice-enabled local mobile search segment that permitted open-ended category search, as opposed to just conventional "name in mind" searches.
RHD is the latest to join a growing list of free DA providers who recognize voice-enabled local search as a broad entry point for consumers into mobile. Other competitors in the segment include:
While the new 1-800-CallDex service is a trial, it's likely to roll out to all of Dex's markets because of the broad appeal of voice and DA-like services. When it comes to mobile, publishers and providers need a diversified strategy to reach consumers. Voice and "free DA" represent the broadest market potential and lowest barrier to entry for mobile users.
It's quite likely that voice search will expand into verticals (e.g., restaurants, entertainment) soon. In fact, I'm somewhat surprised that IAC/Citysearch has developed such a product yet.
Here's the CallGenie-RHD press release.
There's no mystery regarding the attention paid to mobile search, or mobile services in general. It reflects an effort to capture a growing market. Of an estimated 4 billion telephones around the world at the end of 2006, more than half were wireless according to a report just issued by the International Telecommunications Union (ITU). Ten years ago the ITU reported a grand total of 1 billion phones (both fixed line and wireless) in service. At the end of 2006, there were 1.27 billion fixed line and 2.68 billion wireless phones.
The greatest growth was in areas that the ITU (and its parent organization, the United Nations) refer to as "developing countries." As a result, a little more than 60% of mobile subscribers reside in areas where phones are more of a basic necessity and less of a fashion statement or advertising medium. That said, even the least expensive handsets are likely to serve as terminals for rudimentary text-messaging as an introduction to ancillary or enhanced mobile services.
The Boston Globe site seems to confirm -- it's the latest in a long line now -- that Google has prototyped (at least) a mobile handset. Many reports and rumors have lead people to believe that a Google Phone or mobile OS announcement are imminent.
Google is aggressively seeking to accelerate development of the mobile market and is taking a "diversified" approach. A mobile handset may ultimately be a component of that strategy but the company is not banking on that one variable to break open (literally and figuratively) the mobile market.
Enough speculation, I'm eager to see what actually emerges.
More facts and tidbits on the GPhone from Om Malik.