• Reuters, Tuesday, November 7, 2006 12:16 PM

Yahoo is moving into selling ads on mobile phones. The Sunnyvale, Calif. Web giant, whose stock has slumped this year, will begin delivering graphical ads to mobile phones as part of a test to bring Web-based brand marketing to a wireless market.

Many believe advertising on mobile phones could be the next big land grab for content producers hungry for ad revenue. Later this week, Yahoo will begin evaluating slimmed-down banner and button ads to the growing number of users of Yahoo's Mobile Web service. To be sure, it's a far trickier task to create ad inventory on a cell phone than a laptop or PC, due to the size of the screen. That's why Yahoo will have to spend some time evaluating how the move plays with users. Most recently, Yahoo has been testing delivering text ads to phones that are tied to searches performed on mobile Web browsers.

Banners are not new on cell phones. Many small start-ups, like Third Screen Media, already serve mobile banners for agencies and marketers to their big cell carrier partners. It's a potentially lucrative market, because content owners and carriers can charge a premium for reaching consumers on their most personal device. Mobile Web usage is still slight--between 2% and 3% use it more than five times per week, says Jupiter Research. Usage is expected to pick up as carriers upgrade their networks and consumers upgrade to next-level cell phones.

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