SAN FRANCISCO (Reuters) - “Mobile, mobile, mobile” were the words of Google Inc. Chief Executive Eric Schmidt this week when asked what technologies are most intriguing to the computer Web search leader.
Google, which generates billions of dollars from online advertising, is racing to bring consumer services like search to the phone. Its rivals in this field include Yahoo Inc., which has made strides in the fast-emerging mobile Web market, and Microsoft Corp., which bought voice-recognition technology company Tellme Networks Inc. last month.
“The biggest growth areas are clearly within the mobile space,” Schmidt said during a question-and-answer session at the Web 2.0 Expo in San Francisco.
Pay-per-click advertising tied to Web search results erupted into a multibillion-dollar industry within a few years, and Internet companies hope mobile phone services will follow a similar growth trajectory.
ABI Research forecast global mobile marketing and advertising to increase sixfold to $19 billion by 2011 from an estimated $3 billion by the end of 2007.
Google, which controls nearly 50 percent of the U.S. Web search market, is not necessarily a lock to carry over its success on the computer screen to the mobile phone.
“One of the big game changers is mobile,” said Tim O’Reilly, founder of O’Reilly Media, a publisher of several popular lines of technology manuals for software programmers.
“Google’s dominance in search is dependent on this idea that we sit, typing away at a keyboard to look up information,” he said, “but we are in for some huge disruptive upsets.”
Improved voice-recognition technology and the inclusion of global positioning system chips into mobile phones open the door for new applications to help users find relevant information wherever they find themselves.
In addition, improvements in handset technology make today’s cell phone capable of doing almost as much as computers of a decade ago.
Last month, Yahoo introduced a new Internet search system to deliver locally relevant answers to mobile phone users’ questions in fewer steps than Google. Subjects include news headlines, business listings, local weather and links to other Web sites.
Yahoo has signed deals to feature its software on four of the world’s top five mobile handset makers.
Tellme Chief Executive Mike McCue said the pace of innovations on the mobile phone was five to 10 times faster than the computer.
“There are incredible breakthroughs happening,” McCue said in an interview. “The phone is a place-holder name for the next-generation computing device.”
Microsoft bought Tellme in a deal sources say is valued at more than $800 million, its largest acquisition in five years.
At the heart of Tellme’s appeal is a voice-recognition database that allows the company to predict what information callers are seeking and decipher many different accents and dialects.
Initially, mobile search will serve as an alternative to 411 directory assistance service, which costs as much as $1.85 for every call.
Earlier this month, Google also began offering voice-activated directory assistance. At the time, O’Reilly speculated in his blog that Google started the free service at least in part to build its own speech database.
Industry watchers and company executives recognize the inherent difference between search on a computer and on a mobile phone. Search on a computer can be a browsing activity for research, while mobile search is more about finding information and then acting on it.
“We are in the very earliest days of this,” said McCue. “It’s not about taking the existing PC model and way of thinking and moving it over to the phone.”
The business model of search on a mobile phone will also differ from the pay-per-click model of a computer, he said. Users may be willing to be billed for a subscription for unlimited search.
Additional reporting by Eric Auchard