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Year In Review: Search Goes Mobile
The iPhone was introduced on June 29, 2007 and that was effectively the beginning of the mobile internet era. With the iPhone also came the acceleration of mobile search for Google, the default engine for the iconic Apple device.
This year mobile became a cornerstone of Google’s strategy with a string of announcements, product tweaks and the $750 million AdMob acquisition announcement (now under FTC scrutiny). The aborted $500+ million Yelp acquisition was also partly about mobile as well.
The big mobile story of 2009, however, is the rise of smartphone adoption and in particular the iPhone 3GS, which became the top-selling handset in the US this year. However Android also came into its own in 2009, with a massive ad campaign from Verizon on behalf of the Motorola Droid that boosted public awareness of the operating system, as well as the arrival of a dozen (or more) devices in 26 countries from more than 30 carriers.
The Android year ended with a frenzy of speculation over the Google-HTC Nexus One, the fastest and best Android device to date.
With the rise of smartphones came more intense data usage and more frequent Internet access — putting a massive strain on iPhone carriers AT&T in the US and O2 in the UK. In the US there are now roughly 70 million mobile internet users, compared to just over 200 million on the PC internet. Next year the US mobile internet will cross 100 million users without too much trouble.
Smartphone users, now about 15% of the market, search more and are much more engaged with their devices than non-smartphone users. While mobile search volumes don’t approach PC volumes (yet), the frequency for the most intense mobile search users begins to look like search on the PC. Eventually mobile internet access and “search” (which will take various forms) will eclipse the PC internet. In some developing countries the mobile handset is the primary internet access tool already because of a lack of PC “infrastructure.”
The mobile handset, with precise location awareness and more “context,” offers ad-targeting advantages over the PC as well.
In its Q3 earnings call Google’s CEO Eric Schmidt said that the company had seen “30% quarter-over-quarter growth in mobile searches in the third quarter.” Google’s Engineering VP Vic Gundotra argued at the recent Google “Evolution” event that we’re now in a new era of computing and merely at the “beginning of the beginning.”
He’s right of course. One really feels that this in a tangible way this year.
Yahoo Mobile Starts Strong
Yahoo was ahead of its main rivals in mobile in several ways entering 2009. The company had more global carrier search and ad deals than Google or Microsoft and it had greater sophistication to offer advertisers seeking mobile distribution. Yahoo said earlier this year that it could reach up to 800 million mobile subscribers globally though its various operator relationships.
In early 2009, Yahoo rebranded and reorganized its mobile assets under the moniker Yahoo Mobile. The company also saw the departure (via the Carol Bartz regime change) of longtime head of its Connected Life division (now Yahoo Mobile) Marco Boerries. It also brought more coherence to a disparate array of mobile products with new mobile apps and a new mobile internet homepage. The new mobile experiences more directly connect the personalized PC and mobile Yahoo sites, with cross platform content (and ad targeting) if users are signed in. Yahoo also shuttered its “Yahoo Go” application.
In April, Yahoo made a range of mobile search improvements and introduced voice search through a deal with Vlingo. Yahoo Mail ended the year, according to Nielsen, as the second most visited US mobile destination after “Google Search.”
The biggest Yahoo search news this year of course was the deal with Microsoft, which still has yet gain final approval from regulators. However the deal will extend to mobile, giving Microsoft potential access into all of Yahoo’s mobile search deals globally.
Having started the year in a leadership position, Yahoo Mobile ends the year on a more uncertain note with few recent product announcements and Google stealing most of the mindshare and press coverage. While the “mobile is critical to our future” rhetoric is in place at Yahoo it’s not yet clear whether the company has the resolve to compete as aggressively as necessary to keep pace with partner-rival Microsoft and Google.
Microsoft Wins and Loses
It was a good news-bad news year for Microsoft in mobile. As mentioned, Microsoft/Bing will get the benefit of Yahoo’s previously negotiated mobile search relationships and reach around the world as part of the larger MicroHoo search deal. The company also won a massive and much contested search and advertising deal with Verizon, the largest US mobile carrier with 89 million subscribers — only to see that deal undermined to some degree with the introduction of the Verizon-Motorola-Google Droid phones and corresponding PR.
Earlier this month Microsoft introduced Bing for the iPhone, as part of a plan to reach mobile users wherever they may be. The app is quite good and in some ways superior to the Google app for the iPhone. Like the Google app it includes voice search (via Tellme).
Windows Mobile, the operating system, rebranded as “Windows Phone” in an effort to generate more consumer awareness. Microsoft introduced Windows Mobile 6.5 to mixed reviews. And it saw Windows Mobile handsets lose traction in the marketplace. Motorola abandoned the Microsoft mobile OS entirely in favor of Android and there were suggestions that HTC and Samsung were losing interest as well.
Many writers and prognosticators piled on and suggested that Microsoft get out of the mobile OS business. However, if it were to do that Bing and other Microsoft mobile services would arguably be at a disadvantage vs. Google. The company gets another chance to improve with Windows Mobile 7, due out some time in the second half of 2010. Yet, as with Nokia’s Symbian, fundamental questions have arisen about WinMo’s ability to compete going forward.
Windows Mobile handsets confront BlackBerry in the enterprise, which is now dominant, and the iPhone, Android and BlackBerry, again, on the consumer side. Unlike Windows on the PC Microsoft has been put in the position of the underdog in mobile computing. Yet Microsoft also faces challenges on the PC front as computing increasingly moves away from the desktop and into mobile (i.e., netbooks, smartphones, tablets) and The Cloud.
Google Putting It All Together
Among the three major PC-based competitors, Google is clearly the leader as the search battle mobilizes. We haven’t seen any formal marketshare data for some time from the familiar numbers firms, but consumer surveys indicate that Google is leading in the category by margins tracking its PC search share. As mentioned, “Google Search” was the most visited mobile website of 2009 according to Nielsen.
Consumer advocacy groups have voiced strong opposition to the AdMob aquisition, now being reviewed by the US FTC. As a technical matter the acquisition wouldn’t diminish competition in the mobile ad network realm; however as a practical matter it would make Google the dominant mobile advertising company with a combination of search, display and video assets. Less noticed and discussed is the Teracent acquisition, which has significant implications for automating Google’s mobile display ads.
Google is simply executing much more effectively across many more fronts in mobile than its competitors. Beyond Android, AdMob and Teracent here is a sampling of the mobile announcements and product enhancements, large and small, from Google this year:
- Google voice search in more languages, search by location and Google Goggles (visual search)
- Google Navigation and GPS-guided turn-by-turn directions
- Connecting “starred” items on PC Maps with mobile Maps
- Improved movie search with trailers
- Coupons for mobile
- Various improvements to mobile GMail
- Improvements to Google News for mobile as well as introduction of a mobile version of Fast Flip
- Several upgrades to Google Earth for the iPhone
- Analytics for mobile apps
- Location history on Google Latitude in mobile
- Quick search box for Android phones
- Personalized search suggest for mobile and search options for mobile
- Local browse (by category) for nearby businesses
- Improved image search
- Crowdsourcing of traffic data
- Map layers
- Google Voice for Android and BlackBerry devices
- Various mobile YouTube upgrades including launch in multiple languages
- Improved mobile product search with barcode scanning
- Local window decals with QR codes that bring up Place Pages
What may be most impressive about Google, however, is that it recognizes the limitations of its core product on a mobile device. Accordingly it has worked to develop voice search (as have Microsoft and Yahoo to a lesser degree). But it has also taken a “browse” (vs. search) approach to finding local businesses and introduced visual search (Google Goggles), as well as barcode scanning for products. Google is thus pursuing “mobile search” across an expanded array of modalities.
Mobile Search Moving “Beyond the Box”
One of the most interesting developments in mobile this year is “augmented reality” as well as use of the camera more generally as a search tool (e.g. Amazon Remembers, ShopSavvy for products). What constitutes “search” on a mobile device must be thought of more conceptually than on the PC, where it almost exclusively involves a text query in a search box.
We will see search evolve rapidly on mobile devices in new and interesting ways that employ voice and the camera, as well as location awareness, to deliver content and information other than through text links on a SERP. In many cases today apps take the place of a search query by delivering specialized information to the user, often combined with location (e.g., using Yelp’s app to find a nearby restaurant) — all without entering a query per se.
As mobile databases expand and more of the world and internet content is tagged and geotagged we may see lots of interesting mobile apps leverage use the camera or some version of augmented reality for more types of things. In the near future, for example, we will likely see the ability to call up a Facebook profile after snapping the picture of the person at the opposite end of the bar. And the ability to point the camera at a building or landmark and get more information about that thing or location is already possible in Wikitude and other mobile apps.
When we started the year mobile and “mobile search” appeared to be a wide open field. “It’s so early,” was the widely heard refrain. That’s paradoxically correct and no longer accurate.
Google has already won this round of the mobile search contest and seems well positioned (vs. its main rivals) as search moves “beyond the box.” However as new types of mobile devices, tools and services come into being and the mobile internet grows around the world, to become the primary internet for millions, there will be new “search” opportunities that are unpredictable or only dimly visible today.