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The Coming Mobile Threat

Mobile marketing presents both a challenge and an opportunity to Web advertising giant Google. While improvements to the mobile Web will cause more people to conduct searches on their cell phones, the cell phone's tiny screen means that Google will have less inventory to sell. On a standard computer screen the search leader can fit about 10 ads, but on a cell phone you get only one or two paid ads.

Says BusinessWeek: "Imagine the horror that would befall your business if a large slice of what you sell suddenly disappeared. A similar fate could befall companies that depend on online advertising, as small screens become the gateway to the Internet." That said, no one believes that mobile phones will replace laptops overnight, but if the adoption of Web usage on Apple's iPhone is any indication, Google and its competitors better get prepared.

Isn't Google already working on this? Earlier in the first quarter, when those infamous numbers from comScore were released (not that those were necessarily wrong, by the way), Google came out saying that it was tweaking its algorithm to promote ads that were likely to convert while eliminating those that were not. The end result was fewer ads, but more qualified--and thus more lucrative--leads generated from ads that were clicked on. Perhaps Google decided to tweak its algorithm with a view to the mobile shift in mind? After all, if the future means less space for ads, wouldn't Google be wise to make sure that fewer ads cost more and convert better?

Read the whole story at BusinessWeek »

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