Portal power

The content discovery process on the web often starts with a Google search. In doing so, the user explicitly tells Google the nature of their ‘mission’ and the company has built a business around selling knowledge of that mission to advertisers. It is a simple and effective model which has grown out of the popularity of Google’s interface and will continue to expand rapidly because it reached critical mass ahead of its competitors. What happens, however, when content discovery goes mobile? This is a question Google, Yahoo and other competitors in the web portal business are looking at very closely.

The last few days have been filled with announcements of various deals between Yahoo, Google, Motorola and RIM to improve access to web portal services through direct integration with particular hardware devices. All of the major web portals are recruiting heavily in the mobile industry; Google and AOL have also made acquisitions in this space over the last 6 months.

There is a unifying theme to all of this activity: availability. The portal companies are currently focused on increasing distribution (e.g. Google’s deal with Motorola, Yahoo’s agreements with Cingular and Nokia) and making their services as accessible as possible (e.g. AOL’s acquisition of Wildseed’s mobile OS platform).

This is a logical and necessary step, but availability is only half the equation.

Deals between two ‘hot’ companies like Motorola and Google are always going to attract press excitement. However, the deeper question of understanding the changing dynamics of customer behaviour in the mobile environment is yet to be addressed.

Mobile changes the rules for companies like Google and Yahoo. In the mobile environment, a text search is often insufficient to fully understand their ‘mission’. The portals can no longer rely on some of the factors which are taken for granted with PC-based customers. Basic assumptions suddenly need to be questioned: what kind of navigation buttons does the mobile handset have? How big is the screen? What happens if the battery dies in the middle of an interaction? For companies like Google, which has traditionally relied on the integrity of its user experience as a key selling point, these simple problems are big issues.

There is also a strategic question here relating to the understanding of users’ missions. On the web, Google, Yahoo et al are in an extremely strong position because they have the best understanding of users’ missions by virtue of the terms input to their search engine. In mobile, network operators have access to an additional set of data which define the users’ mission even more precisely – location, billing and historical activity. Operators are better placed to understand user needs.

More importantly, users in the mobile environment aren’t looking for the same high-volume, immersive search/browse experience which characterises web navigation.

It would be logical to assume, therefore, operators are in a better position to capture the value in mobile content discovery and, eventually, mobile advertising? Not necessarily.

Portals like Yahoo and Google have other strategic assets which can be leveraged. Their free email accounts are the most obvious. Google’s recently launched mobile mail service is far and away the most usable I have seen. It has the potential to be a huge driver for Google in the mobile business. Both the operators and the portals are very much aware that access to personal email is one of the most compelling reasons for consumer adoption of mobile data services.

Instant messaging is another. So too is mapping – check out Google’s excellent Java-based mobile mapping client for an example.

Email and messaging are services where existing loyalties are very hard to break. Companies which own the relationship with the consumer in the desktop environment have a very good chance of extending that relationship to the mobile.

This provides a powerful base for cross-selling additional services. Google, for instance, has recently introduced a feature to its main Gmail service which allows RSS content feeds to be plugged into the interface. I can now read my email and see headlines from my favourite sites at the same time. A similar service for mobile could easily become the ‘home screen’ of choice for wireless subscribers. That’s a frightening thought for network operators intent on capturing the lion’s share of value in the mobile data business.

To achieve this, however, the portal companies know they need to gain mobile-specific expertise. Hence the acquisitions and the frenetic pace of recruitment. They have the building blocks – compelling services and customer loyalty – now they need the knowledge and experience to navigate the complexity of the mobile value chain.

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