• by Mark Walsh  @markfwal, December 8, 2008

The mobile search battle is well underway, with Google, Yahoo and Microsoft all vying to get their search boxes on carrier decks and across the mobile Web. So far, Google appears to be extending its hegemony in search to the cell phone, with a commanding 60% share of searches on the mobile Web. But Nicholas Covey, director of insights at Nielsen Mobile, says it's too early to declare a winner in mobile search. We asked him for his thoughts on the topic and how he sees the search landscape evolving on mobile phones.

Online Media Daily: Yahoo has made a series of high-profile search deals lately with wireless carriers, but Google still claims the lion's share of mobile search. How do you see competition shaping up in mobile search?

Nicholas Covey: In the U.S., the number of mobile subscribers coming to rely on their mobile phones as a means of search is increasing quickly. The audience for mobile search grew about 40% in the last two quarters alone.

The increased prevalence of smartphones, improved mobile offerings from name-brand search providers and breakout mobile-exclusive players such as ChaCha are helping to boost this market to the benefit of both consumers and advertisers.

The battle for mobile search, though, is going to be more complicated and less decisive than online search. Audiences for several categories of mobile search are simultaneously growing: mobile Web, SMS, carrier-portal and even 411 are each going to keep an important place in the mobile search ecosystem.

Today, about as many data users rely on mobile Web searches as on SMS or 411, and just slightly fewer rely on the carrier-portal's search box. Our Q3 2008 Mobile Search Report reveals that for the most part, subscribers rely on just one of these methods. That suggests to me that we won't be crowning a winner in the mobile search market in 2009--instead we'll face an increasingly complex ecosystem of search options and providers.

OMD: What role, if any, will white-label search providers such as JumpTap and Medio play as the major online search brands expand their mobile presence?

Covey: As the carriers warm up to the idea of search deals with the traditional online players, the white-label providers are evolving around their other core competencies. These guys know mobile, and they have key relationships with both carriers and advertisers.

One need only look at the respective taglines for these companies to see this. Both now bill themselves as not just search providers, but as advertising solutions providers. If they stick around, we'll come to know them more for the latter, where there's still plenty of room for them to play roles in this market.

OMD: What proportion of U.S. subscribers use mobile search? Will the new generation of more affordable smartphones help to boost that percentage?

Covey: We estimate that about 44% of all Data Users (or roughly 30% of all mobile subscribers) used mobile search in the third quarter. Yes, the growth of smartphones will contribute to the growth of mobile search, particularly mobile Web-based searching. Smartphone owners made up 28% of the search audience and just 13% of the overall subscriber population.

Smartphone users are only slightly more likely than the total population to use SMS or carrier-portal search, but when it comes to mobile Web searching they make up nearly half of that audience. For that reason, the expanded universe of smartphones, which was up 24% between Q2 and Q3, is great news for mobile search.

OMD: Will mobile search, like all politics, be local?

Covey: Local is already the lifeblood of mobile search. More mobile data users search for local listings than search for content, Web sites, or scores and other information. Consumers are simultaneously getting used to the idea of using their phone as an entertainment vehicle and an information vehicle, and I believe consumers will warm to the latter more quickly. Given access to that information anywhere, it should come as no surprise that when consumers pick up their phone to make a search, most often it's for a local listing.

The increased access to GPS functionality will only enhance that. Just over half of handsets in use are GPS-capable today, and that will expand rapidly. As long as carriers allow consumers and developers to tap into the power of location information, there will be no turning back on mobile's transformation to being the primary provider of local information.

OMD: Based on Nielsen's research, what do people most commonly use mobile search to find?

Covey: As I said, local is still the big driver across all mobile search methods. In addition, we know that subscribers who are using mobile Web search options are often searching for scores, weather and other types of information, while searchers who rely on their carrier search portal are often looking for mobile content. It's worth noting that our Mobile Search Report shows that subscribers tend to be most satisfied with the results when they're searching for local listings, across search methods.

OMD: Search accounts for some 40% of online ad revenue. Can it ever become that big a part of mobile advertising?

Covey: There are many ways in which mobile and online advertising are not directly analogous, but the importance of search to the medium's overall advertising opportunity isn't one of them. When you consider how consumers are coming to rely on mobile for information that often corresponds immediately with purchase behavior, it's entirely possible that search will make up an even more substantial slice of the mobile ad pie.