Online search has brought Google (Nasdaq: GOOG) and Yahoo! (Nasdaq: YHOO) amazing results and huge profits in the past several years. Now, dozens of companies are looking to capture similar success in mobile search by helping consumers find what they want from their mobile phones -- and serve them lucrative advertisements in the process, of course.
Amid the fray of companies both large and small rushing to offer mobile search services, the wireless carriers are carefully carving out their place in the mobile-search value chain. All the major U.S. carriers, including Verizon Wireless (a joint venture of Verizon Communications (NYSE: VZ) and Vodafone (NYSE: VOD)), Deutsche Telekom's T-Mobile, and AT&T's (NYSE: T) Cingular, favor partnerships with younger startup companies to deliver branded mobile-search services. By avoiding online search heavyweights like Google or Yahoo!, the carriers are in a better negotiating position to control and profit from the services.
Wireless service provider and Motley Fool Income Investor selection Alltel (NYSE: AT) followed suit recently by partnering with JumpTap, a private firm developing wireless search and advertising solutions, to offer mobile search with the click of a single button. Alltel will soon offer several wireless phones that include a dedicated button on the keypad to quickly pull up a search box. The company claims the offering makes finding relevant content, services, and information easier than ever.
The new offering is encouraging for investors in Alltel, since it keeps control of the brand, and hence advertising dollars, with the carrier. Fewer middlemen between paying advertisers and the consumer means more money for Alltel and its investors. Had Alltel partnered with Google rather than JumpTap, the financial benefit would likely be far less attractive.
Another reason to like the service: It makes access to mobile search tools drop-dead simple. Other companies such as Microsoft (Nasdaq: MSFT) realize the importance of this, as well -- the software giant recently bought Tellme to allow consumers to use their voices for search input, rather than a clumsy phone keypad.
While it's still early in what's projected to become a massive market for mobile search -- $11 billion globally by 2008, according to Piper Jaffray -- shareholders should be encouraged that Alltel is not rushing into the market. Instead, it's taking prudent steps to realize more value in the long run.
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Fool contributor Dave Mock prefers a Star Trek tricorder for searching unknown areas while mobile. He owns no shares of companies mentioned here. Vodafone and Microsoft are Motley Fool Inside Value recommendations. Dave is the author of The Qualcomm Equation. The Fool has a disclosure policy.
