Ovum Comment: Cellcos to develop search engine

09 Feb 2007

According to the UK's Sunday Telegraph, a group of major mobile operators are planning to develop a search engine to rival the leading Internet search brands in mobile Internet services. The report claims that operators including Deutsche Telekom, France Telecom, Hutchison Whampoa, Telecom Italia, Telefonica, Vodafone and Cingular Wireless are planning to work out the details at the 3GSM Congress in Barcelona next week. None of the operators has so far commented publicly on the reports.

Ovum principal analyst John Delaney comments:

If these reports are true, we applaud the operators for correctly grasping the importance of search in the development of mobile Internet services. Two of the most frequent starting points for Internet users are the contact list, for communications; and the search engine, for finding what they need among the mass of information that is accessible. Thus, the service provider through which mobile users access their contacts and search the Internet can be, by default, their 'portal' - i.e. their habitual point of entry when using the mobile Internet.

So if the operators succeed in establishing an alternative to the dominant Internet search engines for mobile users, that will be a big help in their bid to avoid relegation to the role of 'dumb-pipe' access providers. A caveat, though: success must come through user choice, not through having the operator search engine imposed on them. Users can be nudged towards the operator search engine, for example by setting it as the default home page, but they will only carry on using it if it's good - otherwise they will just set Google or Yahoo (for example) as their home page instead.

What do we mean by 'good'‾ We mean it must look simple, be easy to use, and return excellent results. In fact, it must do the same things that made Google successful! Excellent search results require excellent content indexing, but that's not enough: the usefulness of the results to the user must not then be compromised by giving excessive prominence to hits on the operator's own portals, or to paid-for links.

In other words, the operators need to be clear about what role they expect their search engine to play. Is it a way of driving advertising revenues‾ Is it a way of driving usage of their own content‾ Or is it a way of ensuring that mobile Internet users continue to see their operator as a service provider, rather than just an access provider‾ The temptation will be to say 'all of these' - but it will be very difficult to produce a successful operators'-own search engine on that basis.

John Delaney is a principal analyst in Ovum's Consumer Group

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