Special Report: Portals find more wars to wage on wireless Web

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While portals battle to top each other in monthly traffic and ad revenue, there's another important war being waged out of roaming range: Which portals will dominate a wireless Web?

In 1999, 3.6 million U.S. wireless subscribers had Web-browsing capabilities, according to researcher International Data Corp. It expects that number to grow to 40.4 million by 2003. Top portal players such as America Online, Microsoft Corp. and Yahoo! are laying the groundwork for mobile Internet access. They are busy aligning with carriers and formatting personalized content--from stock quotes to horoscopes and address finders--to wireless devices.

"[The portals] are all getting into this business at a furious pace," says J.G. Sandom, president of Rapp Digital, New York, the interactive arm of Omnicom Group's Rapp Collins Worldwide. Mr. Sandom, who's been closely watching the activity, and is a member of the Wireless Application Protocol Forum, an organization setting standards for content created for wireless devices.


So far, AOL and Yahoo! "are the most active ones we're seeing," says Callie Pottorf, research analyst for wireless and mobile communications at IDC.

AOL and Yahoo!, the two most-visited properties on the Web, are intent on porting their prominence to wireless.

Ms. Pottorf is confident other portals such as Lycos and Walt Disney Co.'s Go will jump in soon. It's only a matter of time, she says, since she foresees the day coming when "more people will be accessing the Internet in the future with a wireless device than with a PC."

AOL made a big play when it purchased Tegic Communications last year for an undisclosed sum. Tegic's T9 Text Input software, which makes it easier to input messages through a keypad, is licensed to 90% of the wireless phone manufacturers.

To top it off, the week of Feb. 28 AOL announced a slew of deals regarding its AOL Anywhere initiative at the Cellular Telecommunications Industry Association convention in New Orleans. AOL signed deals with Arch Communications, BellSouth Corp., Nokia, Motorola, Sprint PCS and Research in Motion to carry AOL's Instant Messenger service, along with other AOL properties, such as AOL Digital City, MovieFone and the soon-to-be acquired Map-Quest.com. It previously linked with Casio Computer Co., Hewlett-Packard Co. and others.

In addition, Netscape Communications, AOL's subsidiary, is said to be working with Lucent Technologies to develop a wireless portal. An AOL spokeswoman would neither confirm nor deny this.


Long term, analysts see AOL's pending acquisition of Time Warner as a strong play to cull magazine, movie and music content for wireless devices. AOL now serves no ads to users of its wireless content.

"AOL wants to make the products on wireless devices easy to use for the consumer first and monetize it later," says an AOL spokeswoman. "Downstream, as compression improves, we will see more opportunities for interactive advertising."

Yahoo! has also been aggressive in the wireless realm and is serving a limited number of ads. Last year, it purchased wireless software start-up Online Anywhere for $80 million in stock and rolled it into its Yahoo! Everywhere product.

Online Anywhere's software enables Yahoo! to more easily format its content and services for non-PC devices. Yahoo! has also signed deals with carriers around the world, including Palm Inc., Motorola and D2 Mannesman Mobilefunk, a major German mobile service provider, as well as providers in Singapore and South Korea.

While declining to give subscriber numbers, Sadhana Joliet, a producer for Yahoo! Everywhere, says the early success it's had with Sprint PCS has spurred on its wireless efforts. Yahoo! began offering content last year on the Sprint PCS Wireless Web.

Yahoo! recently opened a mobile center where users can learn about downloadable content and services. Personalized content from My Yahoo!, including e-mail, calendars, stock quotes and weather, is available via wireless devices. Advertising, however, is limited to Yahoo! Alerts, an e-mail notification service that delivers alerts on timely content, such as sport scores, stock quotes or auction bids. Anyone with a pager, phone or handheld device equipped with text capability can receive alerts.


Early advertisers include Beyond.com and E-Stamp Corp. Whatever model it is, advertising will be part of Yahoo!'s wireless offerings.

"Unless it's a value-added product," Ms. Joliet says, "our goal is to provide content for free no matter what kind of access we provide." While most of the ads are simple text messages, Ms. Joliet says it's a great space for advertisers because ads stand out on a small screen. "We're designing it so it's not obtrusive and frustrating to the user," she says of the way ads are displayed.

Ms. Joliet says Yahoo! is exploring voice ads and the ability to target ads via location. Geotargeting technology relies on carriers to supply the service, and many of them aren't yet equipped to do that, she says.

Microsoft is not far behind AOL and Yahoo!. Later this quarter or early next, it expects to introduce MSN Mobile 2.0 in conjunction with wireless provider Nextel Communications. The service will offer two-way Web-browsing capabilities on mobile phones. The current generation of MSN Mobile offers wireless phone users notification services such as e-mail and paging, news, lottery numbers, sports and weather information. When the 2.0 service debuts, users will be able to browse the Web and connect to Hotmail, Microsoft's free e-mail service, to read mail from their wireless phones.

Beyond notification services, 2.0 users will receive a variety of Microsoft offerings--MoneyCentral, Expedia, MSNBC--and other services. MSN Mobile 2.0 is positioned as a content provider and a portal. So far, there is no advertising on the service.

[email protected] IN THE GAME

[email protected] is also touting the everywhere message and has struck deals with a variety of vendors to make its personalized content available on handheld devices. It released a version of MyExcite for the Palm VII last fall and will have a version of its content ready for phones later this year. While programs are available to automatically reformat Web pages for wireless devices, Rob Wilen, senior director and group manager for wireless at [email protected], says the company is taking extra time to redesign those pages, editing information so that it fits on a tiny screen.


"We think the way you interact with the mobile devices is sufficiently different than how you interact with a computer," he says. While Excite isn't yet selling ads in this medium, Mr. Wilen says he can imagine text-based sponsorships and targeted offers in the future. "I think the consumer will reject untargeted advertising, especially graphical advertising that they haven't opted in for or that doesn't provide value," Mr. Wilen says, noting that people paying per-minute fees likely will reject big ad downloads. "I think you'll see a fair amount of experimentation this year," he adds. "I don't dare to predict when it'll become a mainstream advertising medium."

Contributing: Tobi Elkin, Jennifer Gilbert

Copyright March 2000, Crain Communications Inc.

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