Yahoo is moving to secure a position on the next Internet battleground: Web search and advertising on cellphones.
The company was set to announce yesterday that it was creating a mobile advertising network that will allow marketers to place ads not only on its mobile services, but also on those of other online publishers. And Yahoo is offering tools to help publishers customize their content for easier use with its mobile search service.
Yahoo's network of publishers at this point is tiny -- three Web services, including MobiTV, a video service to be used with cellphones; Opera, a maker of Web browsers; and Go2, a Yellow Pages site. But the company said it planned to expand the network quickly over the next few months.
"We are being very aggressive on mobile and moving extremely fast to get the building blocks in place," said Steve Boom, Yahoo's senior vice president for broadband and mobile. "We felt that business services for publishers is something that was lacking."
Yahoo, which has fallen a distant second behind Google in Internet search and search-related advertising, has been busy promoting new mobile search software, which it introduced in January.
The software, called oneSearch, is intended to allow users to quickly find information like sports scores and weather reports without scrolling through a long list of Web links.
"One area where Google has not outshined Yahoo is mobile search," said Kevin Heisler, an analyst at Jupiter Research.
By focusing on publishers and advertisers, Yahoo is courting groups that are essential to its success on the mobile Internet. The company hopes to start delivering text, display and video ads on third-party mobile Web sites by the summer, Boom said. Last month it announced that it would deliver graphical ads on its own mobile Web service.
Advertising on sites arrayed for mobile phones is a tiny market, but it is expected to grow quickly, and a number of companies, including the leading wireless carriers, are jockeying for position. Yahoo and Google have both been delivering ads linked to search results on cellphones since last year, but Yahoo is the first of the major Internet firms to introduce a mobile ad network.
A few start-ups jumped into this market early. AdMob, a closely held mobile network based in Silicon Valley, announced Monday that it had received US$11 million in second-round financing. One of its principal backers is Sequoia Capital, a venture capital firm that financed both Google and Yahoo early in their development.
Another start-up that has developed a mobile ad network, Third Screen Media, is in conversations to be acquired by the AOL unit of Time Warner, according to people familiar with the talks. Third Screen and AOL declined to comment. The discussions were first reported by the Wall Street Journal.
Analysts say the market for mobile search and advertising is so young, and the relationships between technology firms, advertisers and carriers so fluid, that no real leader has emerged.
"Yahoo has plunged aggressively into the business in the last few months," said Gary Arlen, president of Arlen Communications, a research firm. "But it's so new, nobody is ahead."
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