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Is there an intersection between Web 2.0 and the mobile web which could affect the lives of millions of people in the way that the desktop web did - and will anyone make money from it?

At first sight it seems obvious that the mobile web must have a future. Compared with the hundreds of million of desktop and laptop PCs in the world, there are billions of mobile phones – and a significant proportion can be used to access the web. Yet accessing and using HTML based data on a mobile phone has always been a challenge – navigation without the benefit of a QUERTY keyboard or mouse and the limitations in screen size and resolution have combined to make it an unrewarding experience.

Early expectations of the mobile internet, including the mobile web, were high. In reality, penetration was disappointing: the majority of mobile phone users were unimpressed with the WAP experience, content providers made little investment in mobile services and the uptake of internet-enabled handsets was low. The one unexpected runaway success, and I remember being dismissive of a business proposal built around it, was SMS text messaging.

Now things seem to be changing. Eric Schmidt CEO of Google sees mobile as the next big space for internet growth, in an article in the FT in May last year he wrote:

"Mobile phones are cheaper than PCs, there are three times more of them, growing at twice the speed, and they increasingly have internet access. What is more, the World Bank estimates that more than two-thirds of the world’s population lives within range of a mobile phone network. Mobile is going to be the next big internet phenomenon. It holds the key to greater access for everyone – with all the benefits that entails."

Last week the company announced a partnership with Sprint Nextel to integrate its mobile services in the network operator's new 4G Wimax service. Google's head of special initiatives commented:

"Mobile is the fastest and cheapest way to reach the largest number of people, there are billions of people on this planet who still don't have access to the Internet. And we think mobile presents the biggest opportunity to get them on the Internet."

Moreover, a new generation of handsets - such as Nokia's N95 - are able to render conventional HTML-based web sites on their screens at readable resolutions and with navigation interfaces that are workable (as does Apple's iPhone, although it's currently only available on GPRS (2.5G) rather than 3G (UMTS) networks).

Thirdly, network operators are starting to allow unmetered (subject to fair use) internet access to their mobile subscribers: 3 was the first in the UK but has since been followed by Orange, T-Mobile and Vodafone.

What then will happen in this new landscape of (relatively) unfettered web access increasingly available to billions of mobile phone users? Ray Anderson, CEO of Bango has an answer (and he should know, since Bango is the leading provider of technology and services that get users interacting with mobile web content). He sees the future as "millions of users discovering a universe of interconnected mobile web sites" where each is enabling access to others and diversifying the choice available to users from the current over-representation of games, gambling, pornography and ringtones.

This seems to be building on two converging phenomena: the widespread use of SMS and its integration with internet messaging (through services such as Twitter) on the one hand, and increasing use of mobile phones for generating and uploading user content (such as pictures taken with their embedded cameras - see Moblog) on the other.

But this likely profusion of user-generated, Web 2.0-like mobile content doesn't address one of the great questions of the original web for so many content businesses - how do you make money? Since this was such a frustration to building a monetisable internet business model, especially around content, mobile web service providers like Bango have built their solutions with tightly integrated charging systems (including BillRank(tm) which finds the billing channel that produces the highest margin for a content provider on any transaction).

Maybe the mobile web won’t be such a change from a business point of view - even with the vast hubbub of user-generated content, businesses will make money from selling valuable, discrete content - much as now - only lots more of it as the mobile surfing habit takes hold. Who then might be the losers? I'll leave Doug Richard to answer that in his wonderful article in the FT on 17 April "Mum, what was a mobile phone operator?"

1 October 2007

Originally posted on CandidCapital - 1 August 2007

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