Mobile Platforms

Yellix: Facebook Becomes Caller ID for Your Smartphone

MobilePeople Alum Claudia Poepperl, has started a new company called adaffix. The company's first product is Yellix. It essentially turns Facebook into "caller ID 2.0" for smartphones (except the iPhone). Here's how Yellix describes what it does:

YELLIX is a free application for your mobile phone. Once installed, it will automatically display a pop-up showing you the up-to-date status, photo and other relevant content of your Facebook friends when they call you on your mobile.

Friends must install the Yellix Facebook app and then the Yellix app on their phones:

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Read the rest of this post on Screenwerk.

Positive Signs for Mobile Search from Tellme (Microsoft)

I'm not sure how we missed this. The Geek.com blog reports today that Microsoft's speech hosting subsidiary Tellme had some interesting research results regarding mobile multitasking. Not surprisingly, it reveals that the group of mobile subscribers who have smartphones have their phones at ready and in use when they undertake their daily activities. Eighty-eight percent (88%) say they use their phones when shopping. Seventy-eight percent (78%) use them when "walking between places". In a slight drop-off, those who are willing to admit it (68%) say that they consult their smartphones while visiting with friends. Being a speech technology company, Tellme polled its subjects to gauge their level of comfort with entering commands or search terms by talking aloud. While some indicated discomfort in certain settings (Geek.com cited "a restaurant), 71% of the overall sample indicated that they would be comfortable with voice command. The further breakdown indicated high levels of comfort while walking (93%), exercising (92%), and shopping or running errands (87%).

Tellme issued this press release with these findings on July 29. 

Will Android Help Google with Share in China?

The news comes that Google has lost market share in China to native search engine Baidu, which now has a roughly 65% market share according to a report recently issued by US investment firm Bernstein & Co (relying on third party data). Others put the Chinese market even more in Baidu's hands (per iResearch):

  • Baidu: 75.7%
  • Google: 19.8% of the searches, down slightly more than a point from the previous year

It struck me, however, that Android might be a "back door" for Google into increased market share.

There are going to be at least two Android-based phones in the market through China Mobile in the next month or so (from Lenovo and HTC). Smaller rival China Unicom is reportedly working with Apple to launch the iPhone in China. There are also various rumors of a Dell smartphone launch announcement in China (OS unknown) in the next several days.

China is the world's largest mobile market with 700 million subscribers -- more than twice as large as the US population. Having several Android phones in China will give Google another bite at the Chinese search market, so to speak, which may enable the company to gain search share where it doesn't seem to be able to on the PC. 

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Related: The rumored Dell phone is reportedly to be an Android device. 

Bank to Allow iPhone Check Deposits

Mobile banking has clearly taken off but US bank USAA is taking it a bit further by allowing iPhone users to deposit checks with the device. According to a story in yesterday's NY Times:

USAA, a privately held bank and insurance company, plans to update its iPhone application this week to introduce the check deposit feature, which requires a customer to photograph both sides of the check with the phone’s camera.

“We’re essentially taking an image of the check, and once you hit the send button, that image is going into our deposit-taking system as any other check would,” said Wayne Peacock, a USAA executive vice president.

Customers will not have to mail the check to the bank later; the deposit will be handled entirely electronically, and the bank suggests voiding the check and filing or discarding it.

The feature won't be available to all USAA customers, only those who qualify (a majority) to protect against fraud. In the US today roughly 15 million people do some sort of mobile banking per comScore. 

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What's interesting in the table immediately above is the fact that such a substantial part of mobile banking is done at home, indicating a preference for mobile vs. the PC. 

Why Did Google Build a New M.YouTube Site?

Google's mobile strategy, notwithstanding the Android Market, is browser centric. In terms of creating a consistent user experience that is globally scalable and cost effective, Google is banking on the mobile Web and the browser as opposed to developing app after app. In addition the recent rejection of its Latitude and Google Voice apps probably nudge Google further in this direction -- where it doesn't have to contend with "gatekeepers," something the company has never liked.

Despite this logic it's still somewhat curious to me that Google has built out an improved m.youtube.com for the iPhone, Android and the Pre:

Today we released a new mobile website specifically designed to access YouTube on smartphones with capable browsers; phones like the iPhone, G1 and Palm Pre.

Just visit youtube.com from your mobile phone, and you'll be taken to a new website specially designed for your device.

These are all handsets that already have native YouTube apps. It would appear to be unnecessary then to create a mobile Web site that provides an app-like experience. What's more Google has taken the position (regarding its mobile AdSense program) that the Safari and Android browsers don't require special landing pages or sites optimized for mobile, because the browsers can faithfully render the PC site and provide a good user experience accordingly. 

YouTube browser vs. app version

Yet Google has created this application-like mobile site that is almost indistinguishable from the YouTube app. The app has slightly more functionality; however the mobile Web site offers a "branded" experience that is more consistent with YouTube on the PC than the native apps. That may be part of the motivation -- to bring more consistency to the PC and mobile experiences. But, again, why is it necessary given the presence of the YouTube apps?

The new mobile Web version of the site appears to contradict or question the 1:1 PC-mobile Web vision that Google has been publicly articulating. That's because it auto-detects the browsers on the iPhone, Pre and G1/MyTouch 3G and automatically shows you the new mobile site rather than the PC site. Indeed, you no longer have the option to go to the PC site on these handsets. So the features of the PC site that are not part of the app are no longer available to mobile users.

Neither the app version nor the mobile Web version offer the full-length programming available through the PC site. That may be contractual or it may be that Google doesn't yet believe it can deliver the full-length programs on the small screen. However, that's coming from Hulu and Neflix in the near term. 

These are not criticisms. I'm just mildly perplexed. 

Amazon Releases Android App, Debuts New Wireless Store

Amazon released its mobile app for Android devices, allowing users to search for products with a conventional query in a search box or to use the camera take a photo or do a barcode scan to find products:

The application includes the experimental Amazon Remembers feature that gives Android users two different ways to use their device camera to find and remember items available for sale on Amazon.com: they can either snap a photo of an item or scan a barcode, and then receive a product match. For barcode scans and many photos, matches are instant. Other items take just a few minutes. 

The same functionality is available for the iPhone and BlackBerry devices (Amazon remembers).

In my limited testing the photo function was more effective than barcode scanning to identify products. For example, I took a picture of one of the Harry Potter books in my house and almost instantaneously Amazon had identified it. Other items I snapped and scanned took longer (a high end kitchen knife, an iPod stereo dock, a magazine) but the photo functionality was generally faster and better of the two methods. In one case Amazon used my overexposed picture of the iPod dock and did find the identical product (though it took about 7 minutes). 

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Regardless of method, these tools allow you to access reviews and product specs and potentially buy the item online (from Amazon or related sellers). 

ShopSavvy, another Android app with barcode scanning capability offers the ability to buy the product or item online or locally, with maps to local stores that carry and have it in stock (though data partners such as Krillion). Google Product Search also allows barcode scanning but relies on third party barcode scanning apps such as ShopSavvy, which must be downloaded first.

It's important to point out that these apps use the camera as a search tool and it's quite a bit faster and easier than typing in a query such as "Harry Potter and the Order of the Phoenix" for example. The camera and voice will emerge as key parts of the mobile search (and content discovery) experience over time. Barcode scanning and comparable camera search capabilities will become requirements for mobile shopping apps over time. 

Consumers will use these tools in stores to: Check reviews and prices and less frequently to buy products online to be shipped to their homes or elsewhere. To some degree they will boost the "look in store buy online" phenomenon, which is a minority use case today. 

Amazon has also launched a new online store for mobile handsets, similar to its online shoe store Endless:

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comScore: 29 Million Smartphones in US

Measurement firm comScore says that there are 29 million smartphone owners and more than 1,000 mobile devices (obviously extending beyond smartphones) being used to "access mobile media" in the US market. The company also contends there are 233 million mobile subscribers in the US. CTIA says the number is 270 million.

Using comScore's 233 million mobile subscriber "base" and the figure of 29 million smartphone owners arrives at a penetration rate of roughly 12.5%. Our data suggest a 15% penetration level. Others in the market put the smartphone percentage even higher.

The reason the smartphone number is important is that smartphone adoption is directly correlated with mobile Internet engagement (leading indicator) and, over time, mobile ad revenues. The comScore data affirm this; smartphone users are:

  • 3x as likely to mobile browse mobile Web
  • 3x as likely to use a mobile app
  • 2x as likely to send photos or videos

The company also said that 59.5% of US mobile users have sent or received SMS messages (see our SMS marketing report here) and 25.3% have received an SMS ad.

Separately, comScore identifies the top mobile applications categories:

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Source: comScore (May, 2009)

There are "three worlds" in mobile: apps, mobile Web and SMS. In the case of smartphone owners, they will use all three to varying degrees. However non-smartphone owners are generally not going to be very engaged in the "mobile Internet" because of data plan cost (and corresponding inhibitions) and generally poor user experience.

What's interesting to contemplate is an emerging category of phones that exists between low-end feature phones and the iPhone and its bretheren. This category is represented by INQ's "social mobiles," phones offering built-in apps that provide a better experience on Facebook, Skype, Twitter: 

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According to the release:

The new phones offer high-spec functionality without the hefty price tag - shaking up the market by giving operators a unique proposition - a 3G social mobile with the speed, usability and suite of applications capable of driving data usage in the mass market.

The INQ Chat 3G is the company's first qwerty-style phone, while the compact INQ Mini 3G expands the range and provides an entry-level social mobile ideal for the price-sensitive prepay market. They complement the award-winning INQ1.

For the two new phones, Twitter joins the suite of communications applications that INQ has already woven into the heart of its social mobiles: which include Facebook, Skype and Instant Messaging.

These are inexpensive phones that offer a high-end app experience around certain functions or sites. This doesn't provide an iPhone-like mobile Internet experience, nor is there an app store, just a few high use case apps specifically tailored to the phone. I suspect we'll see more of this sort of device, not a true "smartphone" but more full featured and high functioning than today's lower end phones -- especially to appeal to the price sensitive youth market.  

YouTube Local: Google's Ingress into Mobile Video Content

Today, Brian Stelter in The New York Times reported that Google's YouTube property is adding "News Near You." it is a feature that uses Web servers' (and presumably mobile network operators') ability to assess geographic location to tailor video newsfeeds. Over time it will evolve into a local video news station thanks to a program by Google and YouTube to enlist participation of local media outlets. Stelter makes a Bay Areas start-up called VidSF into the poster child for the new service, but YouTube started the program months ago and has solicited content from over 25,000 organizations who have posted video news in the past. To fill the inventory, it touts video news from YouTube stalwarts AP, ABC News and Reuters.

To date, according to the Times' story, 200 news organizations have joined the effort. The lure is a split of advertising revenues that appear on the site. These are not significant today, but could grow as the Google search engine serves up links to YouTube in response to to searches on its much trafficked Web site. In addition YouTube itself sports robust search capabilities. 

In many ways, YouTube is giving structure - and perhaps a financial base - to an effort that has been haphazard. Stelter reports that the organizers of News Near You were surprised to find that several newspaper outlets, including the New York Times, The Dallas Morning News and Cincinatti Enquirer, were already posting video's to YouTube. What continues to be missing is a parallel effort to enlist local businesses or brands with local outlets to tailor their promotional messages to local viewers.

In short, there is a long way to go - in terms of content aggregation, audience building and proof of utility - before News Near You becomes a truly local resource but the technology elements are there.

Pandora-Clear Channel Sales Deal: Danger Ahead

Pandora, the top Internet radio brand -- really the YouTube of Internet radio -- and the top free app for the iPhone in 2008 has struck an ad sales deal with Clear Channel, according to AdAge:

Clear Channel's radio ad sales rep firm, Katz Media Group, will start selling display and audio ads for Pandora through its Katz 360 digital sales group

Pandora comes to Katz 360 with a fledgling display-ad business that just introduced audio inventory in late 2008, yielding a total $18 million in 2008, or 95% of the company's revenue. Doug Stern, Pandora's director-audio sales, expected that total to double by the end of 2009 before the Katz 360 deal, and is now even more optimistic that Pandora will fit into advertisers' mind-set as often as it does listeners.

To date, Pandora has been using Google on its iPhone app to monetize inventory with AdSense banners. Apparently there are occasional audio ads that appear on Pandora, but I've never encountered one.

I'm a daily (and heavy) user of Pandora but, as I said to founder Tim Westergren at the EconSM show earlier this year: the minute I start hearing audio ads interrupting the music I'm gone.

Pandora has spoken in the past about a subscription offering (for its heaviest users). Audio ads could be part of a dual strategy to monetize inventory but also to drive those (like me) who listen to Pandora, in part because there are no ads, to a subscription offering. 

We'll see how it plays out but there's danger in injecting conventional audio advertising into Pandora and alienating its audience -- or at least me.

Pandora, which owes its success in large measure to its iPhone app, has now become a clear (channel) acquisition target. 

Skyhook Releases 'How To' (Make Money) Guide for Apps Developers

Skyhook Wireless has released a white paper entitled "Developer’s Guide to In-Application Advertising: How developers today can make money off apps" (.pdf). As the title indicates, it's aimed at mobile app developers or would-be mobile developers. The document offers a range of "how to" information and advice, including best practices.

It's a kind of crash course on mobile advertising and the mobile ecosystem for those unfamilar with the wonderful world of apps or how to make money with them. In addition, there are also interesting bits of data sprinkled throughout, from Skyhook's recent survey of mobile app developers. For example, location and demographic targeting appear to be the most desired capabilities or qualities among developers:

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At the end, the report also features a list of vendors: ad networks, analytics providers and "ad enablers."

Video of Improved Windows Mobile 6.5 in Action

From the UK-based Inquirer comes a video demo of Windows Mobile 6.5 in action on a HTC Touch Diamond 2. The entire experience looks to be dramatically (indeed radically) improved from WinMo 6.1.

Click here or on the image below to take a look at the video (it's about 10 minutes long). The interface has taken a cue from Zune according to the speaker. He explains, "6.5 will co-exist with [Windows Mobile] 7 when it comes out; 6.5 with be a breadth play, be a lower cost device. 7 will be a premium hardware experience." 

(In the US at least, $200 is the de facto ceiling [w/subsidy] for smartphones; will $99 then be the "lower-cost" device category he refers to?)

He says that Windows Mobile 7 will incorporate all the key user experiences in the current smartphone market including multi-touch, which to date only the Pre has (and the forthcoming Android Hero) among iPhone competitors. There's also "full flash support." Microsoft is also banking on multiple applications running in the background as a differentiator. 

There's also a discussion/demo of "My Phone," which is cloud storage for Windows Mobile devices, essentially the same as MobileMe from Apple. At the end there's a brief demonstration of "Microsoft Tag," a propreitary barcode reader/system that will be pre-installed on Windows Mobile phones. 

Windows Mobile 6.5

Will iPhone Apps Become 'Portable'

The Windows Blog is reporting a successful case study on how to port an iPhone app to the Windows Mobile platform:

Thompson’s case study shows, that even though there are some challenges in porting a multimedia-rich application from the iPhone to Windows Mobile, the task can be accomplished, especially with the help of developer-friendly tools like Visual Studio, the richness of community content that is available for Windows Mobile, and last but not least by planning the project ahead and doing all the necessary research in advance. Thompson’s experience should save you time as you port your own applications to Windows Mobile.

If Microsoft can show developers how to do this quickly and easily, it may help to dramatically accelerate the development of the Windows apps marketplace. A rich selection of apps is a key element in the future competitiveness of the Windows Mobile platform. The Pre, for example, is a fine phone and mobile Inernet device but plainly less competitive because of the paucity of apps today. 

Separately companies such as Appcelerator and Rhomobile are developing tools that make it possible to develop mobile apps once that run on multiple smartphone platforms and operate like "native apps."

FCC Wades Deeper into Apple Apps Controversy

Last month, prompted by four US Senators, the US FCC began an investigation into carrier-handset exclusivity in the US. The focus is on the iPhone's relationship with AT&T. All that got kicked up a notch with the recent rejection of Google Voice on the iPhone (following the similar rejection of the Latitude app). Now, as you've probably already read, the FCC is asking questions of Apple, AT&T and Google to determine why Google Voice was rejected as an app and whether there are anti-competitive motivations at play.

Here are copies of the letters to the three entitities (courtsey CNN Money):

Here are the questions (verbatim) that the FCC is asking Apple:

  1. Why did Apple reject the Google Voice application for iPhone and remove related third-party applications from its App Store? In addition to Google Voice, which related third-party applications were removed or have been rejected? Please provide the specific name of each application and the contact information for the developer.
  2. Did Apple act alone, or in consultation with AT&T, in deciding to reject the Google Voice application and related applications? If the latter, please describe the communications between Apple and AT&T in connection with the decision to reject Google Voice. Are there any contractual conditions or non-contractual understandings with AT&T that affected Apple’s decision in this matter?
  3. Does AT&T have any role in the approval of iPhone applications generally (or in certain cases)? If so, under what circumstances, and what role does it play? What roles are specified in the contractual provisions between Apple and AT&T (or any non-contractual understandings) regarding the consideration of particular iPhone applications?
  4. Please explain any differences between the Google Voice iPhone application and any Voice over Internet Protocol (VoIP) applications that Apple has approved for the iPhone. Are any of the approved VoIP applications allowed to operate on AT&T’s 3G network?
  5. What other applications have been rejected for use on the iPhone and for what reasons? Is there a list of prohibited applications or of categories of applications that is provided to potential vendors/developers? If so, is this posted on the iTunes website or otherwise disclosed to consumers?
  6. What are the standards for considering and approving iPhone applications? What is the approval process for such applications (timing, reasons for rejection, appeal process, etc.)? What is the percentage of applications that are rejected? What are the major reasons for rejecting an application?

The iPhone app approval process is increasingly being regarded as capriciuous. As question four above implies: why should Apple have approved Skype or Truphone but not Google Voice? (People also don't remember that Voice Central allows one to use Google Voice on the iPhone today.)

A Google Voice app currently exists for Android and BlackBerry and will presumably be coming to other smartphone platforms. 

Until these questions are answered we won't know whether Apple or AT&T or both are ultimately responsible for the rejection and what the precise motivations are. Questions five and six may be somewhat overbroad, but the fact that the FCC is doing this is probably good for the market. 

Windows Mobile vs. iPhone or Android?

The past 12 months have been a "tough year" for Windows Mobile, according to Microsoft's Robbie Bach, president of Entertainment & Devices. Bach addressed financial analysts yesterday during an all-day meeting. We weren't there but Bach reportedly promised better execution in the future and a better mobile Internet experience than on the iPhone coming in Windows Mobile 6.5:

“To date, we haven’t done as good a job as I would like building relationships and getting the right integration with our hardware partners,” Bach said. “You’re going to see dramatic improvement in integration.”

"You will have a very rich browsing experience on 6.5 devices that will give you access to more Web sites than you will be able to get to on an iPhone that will work actively and work well. It really is a much better experience"

I have yet to see Windows Mobile 6.5 in action, despite several efforts. But I pulled out my old Windows Mobile 6.1 HTC phone last night and it seems almost prehistoric by comparison to the iPhone, Android or Pre (which I don't love but generally like). It's thus hard to imagine that the leap from 6.1 to 6.5 is going to be that radical to justify the statement above. 

In addition, it appears that Motorola has all but abandoned Windows Mobile in favor of Android, according to Om Malik's interview with Sanjay Jha, co-CEO of Motorola:

As part of our conversation, Dr. Jha stressed that handset makers need to pick a single smart phone OS and devote resources to it in order to win. He pointed to Nokia and Symbian, Apple and its iPhone OS and RIM’s Blackberry OS. He used that as a logic to justify why his company was betting the farm on Google’s Android. Why? Because it’s the best option for the company right now.

“I didn’t have any other compelling option,” he said. “The other OS got pushed.”

And long-time Windows Mobile partner HTC seems to be shifting toward Android (or at least diversification), although sales thus far have been less than expected. Palm's WebOS may mean that it doesn't produce future WinMo devices. Although, on the other side, Korean OEM LG has made Windows Mobile its primary smartphone OS. And Samsung works with WinMo. 

All the attention at Microsoft appears to be on the iPhone but Windows Mobile is really up against RIM and Android. RIM dominates the enterprise, Microsoft's traditional stronghold and Android is the open-source equivalent to WinMo: a software OS separated from hardware that can be customized by developers and OEMs. In that sense Android is a direct substitute for Windows Mobile and it's free. It's not like Google Apps vs. Office, where Apps aren't at parity in terms of features and functions. Android is a much better mobile OS and offers a much better user experience than WinMo 6.1.

Here are IDC's US smartphone market share numbers:

  • BlackBerry: 48%
  • iPhone: 19%
  • Windows Mobile: 15%
  • Android: 7.5%

But mobile Internet usage and browsing is not aligned with the handset market share numbers. Per AdMob:

  • iPhone: 64%
  • BlackBerry: 14%
  • Android: 9%
  • Windows Mobile: 6%

Notwithstanding Bach's prediction, Windows Mobile 6.5 is unlikely to dramatically alter Microsoft's new underdog position in the smartphone market. Windows Mobile 7 might be able to really deliver on Bach's promise of improved browsing and usability and make the OS much more competitive than it is now. Beyond this, Microsoft's forthcoming retail stores might also help showcase Windows devices.

But the stores and 7 are still a year or more away.

Are Carrier 'Apps Stores' Destined to Fail?

Although they've had mobile applications for some time, US carriers are now trying to raise their apps profiles more formally -- most visbly Verizon and AT&T. Yesterday AT&T introduced a meta-social networking app:

AT&T today announced the availability of AT&T Social Net, a free mobile social networking application that combines access to Facebook, MySpace, Twitter and customizable news feeds within a single application.

“Five of the top 10 searches on our mobile Web portal are for social networking sites, a clear indication of the growing popularity of mobile social networking,” said Mark Collins, vice president of voice and data products, AT&T Mobility and Consumer Markets . . . 

Through a single carousel menu, users can view and manage their social communities, communicate and track events in real time, and get live news feeds from over 35 leading news, sports, and entertainment sites. Once a user populates the application with his or her information, users can see and respond to tweets, status updates, wall posts, profile comments, photo activity and friends’ news feeds across their communities. Users can also access new or unread articles from their customized content feeds.

And yesterday also at its developer conference, Verizon Wireless formally launched its Vcast application store. The store will open in Q4 of this year. It will mimic the 70-30 payment split that Apple uses, with 70% to developers. RIM has also announced that it will support the VCast store. (The repositioning or expanded positioning of VCast suggests that the mobile TV service is not doing well.)

Carriers have access to customer data and have a billing relationship with subscribers. This gives them some "built in advantages." However I have doubts whether carrier apps stores can duplicate the success of the iPhone or Android. They might enjoy modest success, but carrier apps stores are probably better suited to lower-end handsets rather than smartphones.

Ironically carrier apps stores are party of a "dumb-pipe" avoidance strategy re smartphone owners -- to make them relevant to users beyond the billing relationship. However, smartphones minimize the carrier relationship with the subscriber. The device OEM is at an advantage with smartphones. And all the major smartphone OEMs are in various stages of launching their apps stores. So the question, for me as a consumer, is why would I buy from VCast if I can buy from BlackBerry Apps World directly? 

The reasons would be:

  • Payment: it's quicker and eaiser to buy the app through Verizon
  • Unique: it's an app that's not in Apps World
  • The overall Verizon apps store experience is better 

The fragmentation of the smartphone market will be reproduced for developers within a single carrier apps store because they will have to be available for multiple handsets with multiple operating systems. Developing for VCast means dealing with Windows Mobile, BlackBerry and so on.

If I were developing apps for the BlackBerry I would develop first for Apps World and second, if at all, for VCast (unless the financial deal from VCast was better than Apps World). If my app could go both places for more exposure, so much the better. Thus the carrier apps store potentially becomes a secondary marketing vehicle for the developer.  

Finally, the carriers are just not good at user experience design. Collectively all these variables and factors make me believe that they're not going to be able to pull this off and the handset based apps stores will largely prevail.

Bango Introduces 'WiFi Operator Billing'

I was ignorant of the fact that operator/carrier billing won't work if a user is buying something over a WiFi connection (e.g., a ringtone). But apparently:

While mobile operator payments deliver significantly more successful transactions than traditional payment methods, mobile content revenues have been impacted by the increasing popularity of smartphones, such as Blackberry and iPhone. Because these devices can connect to the web through Wi-Fi, operator billing that normally relies on traffic coming through operator gateways, becomes unavailable, making it difficult for consumers to buy content. 

Bango's payment system facilitates these WiFi-based transactions and enables users to pay on their carrier bill. Bango began as mobile payments company and then began emphasizing analytics. But the payments space is hot again with companies such as Zong, Boku, PayPay, Obopay, Monetise maneuvering for position in this emerging market segment.

Micro-Hoo Mobile: Comments from the Conf. Call Transcript

This morning's conference call with Yahoo! CEO Carol Bartz and Microsoft CEO Steve Ballmer covered a broad range of topics related to the Microsoft-Yahoo! search deal. Here are some excerpts from the call transcript related to mobile:

Bartz:

We want to invest in what is really important to our future success, including winning audience properties, display advertising capabilities, and mobile experiences . . .

I'm excited that this agreement provides us with the focus and the resources to invest in our audience properties, display advertising leadership, and mobile experiences . . .

We have the option of using the Microsoft technology for the mobile Web experience. It's not exclusive as it is on the PC. But we certainly have the benefit of it, and we will start, in fact, exercising that right to do it.

So, the only difference is it's not exclusive. If somewhere down the road we wanted to switch, we could, but there's no intent in that arena.

Ballmer: 

I think all of us would say we don't know what we don't know about all of the scenarios that we're going to try to invest in, in the mobile case. If -- and Carol can speak for herself, but it won't make sense to do a whole separate crawl of the Internet for Web sites to do mobile search, and yet what that really looks like, even whether the ad model for mobile search looks like the ad model frankly for PC search, I think that's an interesting question, and this gives Yahoo! flexibility to consider that broadly.

Bartz:

think the thing is for us is what we're very interested in, just like by the way with PC-based, we're very interested on doubling down on the mobile experience to integrate search as part of that, to integrate our content such as our normal finance, news, sports, homepage, that sort of thing. So, being able to have an integrated search is important, and it also frees us up to, as I said, really invest in the other areas of the mobile experience.

So, again it's a partnership that is very supportive, and allows Yahoo! to do what it does well, and that's really be the center of information, entertainment, friends, family, activity, and that sort of thing, both the desktop and the mobile experience we're looking for.

What this means is that Yahoo!, although not required, will be using Bing algorithmic search index for mobile. It makes sense from an economic perspective. Part of the reason Yahoo! is doing this deal is to outsource technology development and reduce costs. It would thus make no sense to invest in search for mobile and not on the PC. 

Mobile search monetization and how that will go is a little more unclear. One version of the story is: direct overlap between PC and mobile. But that's been more Google's approach. Yahoo! has treated PC and mobile search separately. So I'm unsure how this will play out. In the broader relationship Yahoo! will sell "premium search" (complex campagins to large advertisers) while Microsoft will handle the self-service aspect of the business. Yahoo! will thus manage the PC + mobile search and display ad campaigns for large advertisers.

Separately, there are open questions about how differentiated Yahoo! Search and Bing will be on the PC side, but they will certainly be very differentiated on the mobile side (compare m.bing.com with new.m.yahoo.com) despite the fact that they will use the same index. 

Microsoft & Yahoo Strike Deal: Mobile Thoughts & Implications

Microsoft and Yahoo! announced their long-awaited search deal this morning. Here's the press release which includes videos from both CEOs. Here's a site set up to explain the deal and here are the terms laid out by the release:

  • The term of the agreement is 10 years;
  • Microsoft will acquire an exclusive 10 year license to Yahoo!’s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing web search platforms;
  • Microsoft’s Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites. Yahoo! will continue to use its technology and data in other areas of its business such as enhancing display advertising technology.
  • Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers. Self-serve advertising for both companies will be fulfilled by Microsoft’s AdCenter platform, and prices for all search ads will continue to be set by AdCenter’s automated auction process.   
  • Each company will maintain its own separate display advertising business and sales force.   
  • Yahoo! will innovate and “own” the user experience on Yahoo! properties, including the user experience for search, even though it will be powered by Microsoft technology.   
  • Microsoft will compensate Yahoo! through a revenue sharing agreement on traffic generated on Yahoo!’s network of both owned and operated (O&O) and affiliate sites.
  • Microsoft will pay traffic acquisition costs (TAC) to Yahoo! at an initial rate of 88% of search revenue generated on Yahoo!’s O&O sites during the first 5 years of the agreement.   
  • Yahoo! will continue to syndicate its existing search affiliate partnerships.   
  • Microsoft will guarantee Yahoo!’s O&O revenue per search (RPS) in each country for the first 18 months following initial implementation in that country.
  • At full implementation (expected to occur within 24 months following regulatory approval), Yahoo! estimates, based on current levels of revenue and current operating expenses, that this agreement will provide a benefit to annual GAAP operating income of approximately $500 million and capital expenditure savings of approximately $200 million. Yahoo! also estimates that this agreement will provide a benefit to annual operating cash flow of approximately $275 million.   
  • The agreement protects consumer privacy by limiting the data shared between the companies to the minimum necessary to operate and improve the combined search platform, and restricts the use of search data shared between the companies. The agreement maintains the industry-leading privacy practices that each company follows today.

According to remarks made on the conference call, Yahoo! doesn't have to use Bing/MSFT's technology in mobile. There's more flexibility there for Yahoo! to maintain a separate search technology or work with other partners if it chose to do so. However it sounded like Yahoo! would be using the MSFT/Bing technology there as well. Part of the "flexibility" on the mobile side comes from uncertainty regarding how mobile advertising will play out.

Here's a paraphrase of remarks made by the two CEOs regarding mobile:

Bartz: We have option of using MSFT technology for the mobile experience. It’s not exclusive as on the PC. If somewhere down the road we want to switch we could.We’re very interested in doubling down on the mobile experience. Having an integrated search is important.

Baller: We don’t know all the scenarios involving mobile search. This gives Yahoo flexibility on the mobile side.

The two companies on the PC side are creating a single paid search market. There's more gray in the mobile execution. However I suspect that it will also play out the same way in mobile: a combined market for mobile paid search. On the PC side that means the reach of a combined Microsoft-Yahoo is approaching 30% market share; it will be something comparable on the mobile side. 

Partnership Puts 2D Barcodes on Bus Shelters in Paris 'Quartier Numérique'

French 2D barcode platform vendor MobileTag and outdoor advertising company JCDecaux have announced a deal to put 2D barcodes on 19 bus shelters throughout the area of Paris known as the "Quartier Numérique" primarily in the 2nd arrondissement. The area is WiFi enabled. The barcodes provide access to "practical, historical, cultural and entertaining content using flashcodes." According to the release:

To obtain content, users simply shoot one of the flashcodes (2D barcodes) located on either side of the bus shelter with their mobile phone's camera which then gives instant access to the mobile portal via their Internet connection.

The technology works with smartphones and feature phones (with a camera). However the technology is not so instant. MobileTag's software must be installed for the content to render on phones. This software/application download requirement is a barrier to widespread adoption of 2D barcodes. However, apps stores are conditioning smartphone users to download software so this may be less of a barrier over time.

The eBook Is Really Here

Quick: how many ebook readers will there be in the market next year? Five? Six? Seven? Indeed:

  • Kindle
  • iPod Touch 
  • Plastic Logic reader
  • Apple Tablet (rumor)
  • Sony eBook Reader
  • Fujitsu FLEPia
  • Samsung SNE-50K

Putting aside the iPod Touch and the rumored Apple tablet, there are at least five competitors going after this growing market. The WSJ looks at the new entry from Samsung, the SNE-50K ebook device, formerly called Papyrus, which is not available outside South Korea for the immediate future:

Samsung's reader is slim at nine millimeters and weighs 6.5 ounces, less than the 10-ounce Kindle.

Samsung is still working on versions of an e-book reader to sell in other countries and executives said they aim to show prototypes at an industry trade show in January . . .  Samsung's initial e-book reader doesn't support wireless downloads or connections to the Internet, as Amazon's Kindle and readers by some smaller firms do. Instead, a customer must download a book to a PC and then into the device.

There are other hardware OEMs also looking at building e-readers. The emerging critical mass of hardware devices means that publishers and booksellers will take the market seriously, which is indeed happening.

The right form factor and user experience are still very much in development. I believe that the winning devices in this segment will offer ebooks, magazines and newspapers but also be Internet capabile and have color screens. They will also need to retail for less than $300. 

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Related: See this video demo of the new Samsung Mondi (WinMo) "WiMax Tablet"