Mobile Europe - August 1, 2007

Excerpt:

Location-based services are making a comeback. The initial excitement about them fizzled out because neither the phones nor the data plans could deliver. What's more, the vision of a service that could push coupons to users as they passed stores and shops was a privacy nightmare, observes Greg Sterling, a senior analyst at Local Mobile Search, an advisory service from Opus Research and Sterling Market Intelligence.

"It was a pipedream, and even if it would have worked in principle, it lacked the context to be more than annoying spam," Sterling says. After all, a coupon for a restaurant is pretty much meaningless unless the service can establish the mobile user is looking for a place to eat. It's an important piece of the location services puzzle that can be provided by mobile search. In Sterling's view mobile search is the ingredient that can turn location-based services into profitable value propositions.

This new breed of location-based services is bound to take off - but only if it's offered free to consumers, Sterling says. This is borne out by data from Opus and Local Mobile Search that predicts a dismal future for the paid directory service business. It reckons revenues will drop from $3.5 billion in 2006 to $1.8 billion by 2010 in the U.S. alone. At the same time the advertiser-supported model, which offers consumers free directory services, is expected to increase to a $3 billion business in 2010 from $203 million in 2006.

From the article, "Taking search to another level", Mobile Europe, August 1, 2007