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TECH TALK: Mobile Internet: Business Models

August 23rd, 2006 · No Comments

What are the avenues to make money on the mobile Internet? I think there will be three options: ads, alerts and relationships.

Advertising on mobile internet sites is not likely to be very different from what we see on PC websites. The limitations of the mobile will mean than ads need to be used carefully. The standard approaches of banner ads and pay-per-click ads will be complemented with click-to-call ads. One point to keep in mind in countries like India is that for brand or transactional ads, it is key to have mobile websites. Considering that most businesses in India still do not maintain websites or have websites with outdated information, creating publishing tools which enable easy management of mobile websites will be critical.

The second potential revenue source is via SMS alerts that can be sent on demand to users. These can be for specific events. For example, a user may want to receive an alert a few minutes before a TV program. Another user may set up an alert when a stock price crosses a high or low watermark. A third user may want to receive an alert when Tendulkar comes out to bat. SMS alerts can be set up while a user browses the mobile Internet. In India, users would be prepared to pay about a rupee or so for every incoming SMS.

The third, and perhaps the largest, opportunity is around enabling relationships. One can think of this as permission marketing, but it is much more than that. In this case, the information communicated by a business to a user isnt advertising but is akin to editorial. The relationship is built around incremental information the whats new. Mobiles are the perfect devices to both create and consume this incremental information. Relationship-driven marketing is, according to me, the next big thing beyond contextual advertising. It puts the user in control by enabling the user to subscribe or unsubscribe at any time. It also reduces the cost of marketing for businesses.

With every new medium comes a new form of interaction. The Internet made searching the reference web easy and advertisers have flocked to put ads based on the content that users are searching for. The next step is, according to me, where users define their interests via subscriptions on future content. In emerging markets like India, given the limitations around the installed base and the usage of the PC, the mobile will emerge as a key marketing channel.

Tomorrow: The Bigger Picture


TECH TALK: Mobile Internet+T

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