Microsoft’s Tellme Acquisition ‘Accelerates’ Mobile Search Competition

Notwithstanding Microsoft’s own existing speech assets, the Tellme acquisition appears to be complementary and strategic for Microsoft across the board. There were the four principal areas, identified in the release, that would be pursued or enhanced by the acquisition: unified communications, speech platform, software plus services and mobile services and search.

Indeed, Microsoft wants to put a speech front end on all its applications and on its OS. While this holds some interesting possibilities for search on the desktop and for the desktop itself the real promise from a consumer standpoint is on mobile devices and in the car — or at least that’s what I’d like to focus on for purposes of this post.

In a now widely cited quote from the Wall Street Journal (May 8, 2006), “The Next Tech Battle: Internet Searches on Cellphones,” (subscription required) Microsoft CEO Steve Ballmer says, “The leading-edge battleground between us and Google in local search really will come on the phone.”

Although I might dispute this in principle, the sheer fact that there are between 200 and 220 million cellphones in the U.S. and more than 2 billion globally argues there’s a great deal of truth, by default, in Ballmer’s quote.

While mobile search is a complicated issue, mainstream usability remains one of the core barriers to consumer adoption. In addition, data plan costs, network speeds and hardware issues are some of the “moving parts” that need to align to drive adoption. However the Tellme acquisition aims to address some of the core usability questions in an accelerated fashion and put Microsoft at the forefront of mobile search.

Tellme and Microsoft’s carrier relationships also make this a potential white label platform that carriers can use for mobile search and monetization (with adCenter on the back end). If Microsoft aggressively seeks to pursue those types of relationships — it already has a significant relationship with Sprint and Tellme has relationships with Verizon and AT&T — it will be competing with JumpTap, Medio Systems and the more recent FAST-InfoSpace partnership.

Stepping back, we appear to be in what might be called a “moment of acceleration” (I avoided the term “watershed”) and intensifying competition for mobile search and marketing. In the past 24 hours alone there have been three mobile announcements. Next week there are three more (that I’m aware of) coming.

In addition to the Tellme acquisition, Medio Systems put out this release yesterday claiming to be the numerical leader in mobile search in North America. And free directory assistance (DA) firm Jingle Networks (1-800- Free 411), which is like Tellme in delivering speech-enabled mobile search, put out this release in which they say they’ve captured 6% of the mobile DA market in the U.S.

Yesterday also, rumors of a “Google phone” were generally confirmed. And the iPhone, though not yet out, has shaken up the market and caused mobile handset makers to respond.

Competition is rapidly intensifying in mobile search (and marketing) and all the players, carriers, handset makers and content providers are positioning themselves for accelerated growth over the next few years. Microsoft’s Tellme acquisition doesn’t guarantee anything but it gives the company a tremendous asset and an accelerated opportunity in a sure growth area of mobile local search (“free DA”) and it also puts additional pressure on rivals Google and Yahoo, as well as others, to respond.

Related posts:

Related Topics: Channel: SEM | Microsoft: Bing Mobile | Search Ads: Mobile Search | Search Engines: Maps & Local Search Engines | Search Marketing: Local Search Marketing

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About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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