News : Mobile search about to become real business - MCN

By Tarmo Virki

HELSINKI (Reuters) - Advertising revenue from mobile Web searching is becoming a serious business and could be worth $2.4 billion by 2011, a key player in the industry said.

Mobile Content Networks Inc. (MCN), which says it offers a more mobile-tailored search function than Google or Yahoo!, said it was seeing strong demand from mobile phone operators.

MCN earns money from placing ads alongside mobile phone search results screens and says the market is set to more than double each year as consumption of wireless data and mobile content accelerates.

"The mobile search business has started to move from an investment phase to the phase where it is a business on its own merits," Kimmo Paaso, a co-founder of MCN, told Reuters in an interview.

As networks grow faster and most handsets now come with Web browsers, Internet companies like Google and Yahoo are moving aggressively to bring search, e-mail, mapping and other familiar online services to phones.

"I am not worried about them. What they're offering is different and we complement each other," Paaso said.

Most of the searches done on mobile phones are not general Web searches, but for mobile content -- typically music tracks or games -- for which MCN has started to charge content providers on a pay-per-click model.

The technology of MCN, which has so far raised $16 million from venture firms, is used by brand owners to control client relationships in the wireless world.

"At the moment operators' interest is very big, especially in Europe," Paaso said.

MCN hopes its data collecting technology, based on the splintered nature of information on the wireless Internet, should help it keep its niche next to search engines of major rivals, which are suited better to traditional Internet.

The firm also has a strong position in the first major mobile search market in Japan where top local telecom operator NTT DoCoMo uses its technology, and where it works together with Yahoo Japan Corp.

MCN's direct rivals include JumpTap, Medio Systems and Microsoft, after its 2006 acquisition of Motion Bridge and 2008 purchase of Fast.

Microsoft has sought to duplicate its PC strategy in the wireless sector with its mobile phone operating system, Windows Mobile.

But the software is in only a small proportion of so-called smartphones -- phones with computer-like functions -- and mobile users are focusing more and more on online services they can access rather than just applications loaded on handsets.

(Editing by David Cowell)