Source: wsj.com

Google Inc. is developing a new search service for cellphones that will help consumers find and buy ringtones, games and other mobile content as the Internet company pushes more deeply into wireless, people familiar with the matter say.

Google already offers cellphone users a version of its popular engine for searching the Web. Now the company wants to go beyond just looking up Web pages, effectively becoming a gateway for finding and paying for mobile media content.

With the new system, users would search for a piece of content -- say, a U2 ringtone -- and get back a list of providers as well as links enabling them to easily purchase the material. Eventually, Google would charge companies for high placement in the search results, much the way it offers "sponsored links" on computer Web searches, the people familiar with the plans say.

The company has been working for months with content providers -- including large entertainment companies and smaller mobile-media aggregators -- to index their material and make it available via mobile search. But the project has been marred by a series of technical delays, people familiar with the matter say, illustrating that there's a learning curve as Internet giants adjust to the peculiarities of the mobile world. It isn't clear how soon Google plans to launch the service.

The Internet company has considered including a social-networking component that would let users of the company's Gmail email service exchange content, a person familiar with the initiative says. Overall, the service would work much like the Google Product Search service, formerly known as Froogle, people familiar with the situation say. A spokeswoman for Google declines to comment.

Google's plans to broker the sale of mobile content like ringtones and games could become a threat to large cellphone operators like Verizon Wireless and AT&T Inc., especially if Google enables customer payment through eBay Inc.'s PayPal or its own online Checkout service. The operators have built their own storefronts to sell such material, and they would prefer to hold on to consumers' attention and spending. If billing goes through the carriers instead, appearing on customers' monthly bills, carriers could actually benefit because they usually get a significant cut of such transactions.

Though mobile content is still a small market, it is growing quickly. Global sales of music, video, ringtones and other content reached $27.4 billion last year, and they are expected to grow to $59.3 billion by 2011, according to the technology-research and consulting firm Yankee Group.

Google has lately been sparring with Verizon and other operators in Washington over Google's proposal to have regulators open up wireless networks to more services from Internet companies and others. Google has also made a series of moves lately to beef up its presence on cellphones. The company recently began testing a service -- similar to its AdSense platform on the Internet -- that will broker ads for other mobile Web sites. Last month, its YouTube unit made a version of its video-sharing Web site available for Apple Inc.'s iPhone. And the company has said it's working on new software applications for cellphones as well as a software platform for such devices on which other developers could build.

Other Internet companies have also been pushing into mobile lately. In June, Yahoo Inc. launched a partnership with the U.K.-based carrier Vodafone Group PLC to show banner ads on cellphones for such companies as Ford and Nissan. In a small deal it didn't announce publicly, Yahoo also recently acquired a small company called Actionality that brokers ads for applications and games that can be downloaded to cellphones. Time Warner Inc.'s AOL, meanwhile, acquired mobile advertising provider Third Screen Media in May.

When it comes to searches on cellphones, Internet companies like Google and Yahoo have been competing with start-ups like Medio Systems Inc. and JumpTap Inc. The lure for all providers is the potential ad revenue that could be generated by sponsored links alongside search results. Revenue from search ads is still tiny, but Google and others see it growing down the road.

The start-ups have snagged early deals with U.S. wireless operators like Verizon Wireless, Deutsche Telekom AG's T-Mobile USA and Alltel Corp. The carriers integrate the start-ups' search tools into their handsets to make it easier for consumers to find content in the carriers' mobile storefronts and to look up local businesses. Microsoft Corp. is the only major Internet company to land such a partnership with a U.S. carrier, a pact with Sprint Nextel that provides a search bar customers can use to find everything from ringtones on Sprint's storefront to local restaurants.

Translating Internet search to the cellphone screen isn't trivial. While consumers search the Web for just about everything on PCs, cellphone users are usually interested in a much narrower universe of information, such as sports scores, the phone numbers of local businesses and media downloads like games and wallpaper.

The small cellphone screen limits the space to display results, so search providers have to be as precise as possible in determining what a user wants.
Google's mobile search isn't promoted by carriers, but consumers are beginning to discover it. Google has a separate search service that lets users send a text message to "googl," or 46645, to look up a local business.

Credits: Amol Sharma, Kevin J. Delaney WSJ
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