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WIRELESS INTERNET BUSINESS: It Is Different!

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VoicenData Bureau
New Update

Portals and vortals (some not-so-imaginative commentator’s term for vertical portals) are old ideas. It is time for wireless portals. Call them wortals, mortals (mobile portals), or by any other name you might fancy. But the fact is that the likes of Airflash, Wapaw and Avantgo are all set to take the place of traditional (Everything becomes old, traditional, giving away to the modern. The Web, with all its might, is no exception.) web portals like Yahoo!, Lycos, and Excite. At least, in terms of mind share. And sooner than you think. 

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In the next six-seven years, more people will access Internet from their cellphones than their PCs. Sounds quite strong as a statement. But that is what most analysts say. And they do not sound too prophetic. Last year, more than 160 million cellphones were sold world-wide–much more than number of PCs sold. By 2002, there may be 700 million cellphones in use. That is why everyone is rushing off there.

There is a new opportunity. Every guy thinks it is for him. And him only. He does not know how. He is not too keen to find out. He is busy exporting his business model and process to the new opportunity. He is not willing to accept that it is a fundamentally different business. But that is nothing new. It happened with many companies not too long ago. Right?

Is It Really Different?

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Yes. It is a new business. There is a new set of rules, yet to be defined properly. But one thing is certain. You cannot port the same business model, which worked for the traditional Web business, and yet hope to succeed in the mobile Internet domain. Yes, the mobile Internet may not be a different entity by itself. But the business of mobile Internet is different. And there are reasons for that.

Reason #1: The media are

different

One,

while the Web is global and anonymous, the cellular is local and

personal. Your cellular phone, like you, has a unique identity.

No other person on the earth can have the same number as your

cellphone. Your PC does not have that. In the traditional

Internet, there is no difference between a surfer who is

accessing it from a kiosk and you, who are accessing it from

your own personal notebook.

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Two,

every medium is unique in itself. When cinema came, it was used

as a memory for stage. The movies were getting shot at one

location. But soon, it was realized that it had no time and

space constraint. Someone imaginative enough has to exploit the

new capability of the medium. Cellphone is with you always. That

is a uniqueness. This can be exploited to provide unique,

effective on-the-move services. What are they? A million-dollar

question.

Three,

for succeeding in the business, one needs to understand the

limitations of the medium. Every gap can be turned to a business

opportunity. Information overload, for example, is a no-no in

mobile data services. Local content is crucial.

And there are many more

such subtle but fundamental differences. Reason #2: The objectives are

different

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Internet got started in

the eighties. The Web is comparatively newer. In the early phase

of development, Internet developed as a communications and

information-sharing medium. Collecting and storing information

has been the objective of traditional Internet. The content

provider tries to provide as much as possible. It is a game of

plenty. It is for the user to filter the information.

In mobile Internet, the

service provider–whoever that is–will need to do a lot of

filtering. The new mantra is relevance. The user cannot go

through loads and loads of information. He needs just what he

needs–nothing more, nothing less. And each user has his own

choice. You have to customize it for each single user. Tough,

but not an impossible task. Just know your customer extremely

well. And understand his needs.

Reason #3: The ground realities are different

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The wireless content business need not follow the same path that the Web content business does. In the early phase of Internet development, there were clear boundary lines between segments. Few technology suppliers were in access. Almost no access provider was into content. Today, a Microsoft is in content. An AOL can acquire a Time Warner. The development cycle of wireless Internet will be different because of this.

One identifiable early trend is the way the wireless content business is getting organized. In the traditional Web business, content came first. Their organization (directories and portals) came later. Today, there are already too many wireless portals (see box) out there, though there is very little WAP content available. A search for

India in Altavista today gives you more than 22 lakh matches. A search for India in Wapmap (WML pages only) gives you just 14 results.

And Hence: Revenue models have to be different

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The two major ways of

getting money in the Web business (apart from VCs and IPOs) are

advertising on the web site and charge for information.

Interestingly, there is little innovation in these revenue

models. They have directly been imported from the earlier era.

Advertising is what media (newspapers, magazines, radio, and TV)

has been relying on for years. Pay for information is the model

that information researchers have been following for quite some

time. Analysts believe both these will not work in the mobile

domain.

It does take an analyst to

say that bar advertising is out from day one. It is also

difficult to believe that short message advertising will be

sustainable. Pay for information will also work for very few,

customized type of information.

That leaves one to look at

the other example from the traditional Internet business–e-commerce.

Mobile commerce (m-commerce) is the option here. The good thing

here is that the major roadblock that traditional e-commerce has

faced– security–is less serious in mobile domain. By

definition, m-commerce is more secure than e-commerce. Your

cellphone is yours. That adds a great level of security. But

then, few will surf on their cellphone to find a good ghazal

album. Only essentials–food, tickets, etc.–will be ordered

from a mobile phone. But yes, by all probability, more

frequently. Many think enabling

services like mobile banking will be the killer application in

the wireless domain. But now, most of our thinking is derived

from the earlier age. Till someone finds a really new killer

application, we have to live by that.

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Just a single line

summary:


The business model and, hence, the revenue model in these two

businesses are as different as selling pharmaceuticals and

running a hospital.

Time to Take

Positions


If you are unsure about how a new business will develop, buy a

few small companies and/or announce some "major"

initiative in that area, and watch out for the future to unfold.

Though this comment is often made about a particular IT company,

to some extent it holds true for most technology majors today.

And that is what these companies are doing in the wireless

Internet business.

How else can you explain a

Lucent, a Microsoft, an IBM, and an Oracle setting up wireless

portals. "God knows" was the response of a global

analyst when asked about the strategy behind this mad rush at

setting portals. Interestingly, he believed in the power of WAP,

and the business opportunity that lies ahead, "What I am

trying to tell is that mobile Internet business is not

synonymous with setting up a wireless

portal."

He is right. We have seen

that in the past. We are going to see that in future. What

people are most comfortable with is playing the old game on the

new turf. Naturally, it fails. There can be

a lot of debate on the positioning of these mega players. Let us

look at something that is more imminent and immediate.

And that is the big battle

between the cellular service providers and the Web content

providers. Both have their strengths and weaknesses.

Cellular service providers

think they "own" the customer, they are local and so

have a better feel of the local requirement (a major advantage),

and better understanding of the customer. Their weakness,

however, is that they are limited to small areas and are not

seen as people who understand the content/information business.

The Web content providers

have strong brands and the logistics of information collection

and dissemination. And of late, have been getting a lot of money

from the market. Their weakness is that they hardly know the

user, let alone his requirements, and they operate on a global

one-way basis. Local content is kind of alien to them.

Interestingly, the

technology suppliers are backing the respective camps depending

upon their own strengths. Telecom companies like Nokia are

backing the cellular service providers whereas the IT majors

back the Web content providers. Tomorrow’s

Men


Any new business has new opportunities, which the traditional

businesses often ignore. That creates a whole new set of

companies which rush in to cash in on these opportunities,

created many a times by the gaps arising out of the failure of

the traditional service providers to fully understand the

"grammar" and thus the capability of the new medium.

There is no reason to

believe why this will not happen in the wireless Internet

domain. While both the cellular operators and web companies have

a lot of strength, many of them have one weakness. They are not

willing too much to adapt to the changes and in stead trying to

do the new business in the same old way. This will create a

major gap, which can be tapped by the new WAP service providers.

There are already quite a few of them.

Many experts see emergence

of strong wireless content brands, some of which will develop

into being mega challengers and some of which will get acquired

by the bigger companies. Those cellular, technology, or web

companies which adapt will survive.

Many also see cellular

companies turning to small content providers at the back-end.

Some of them may develop the expertise and build the brand and

may eventually challenge their principals–a la Microsoft.

It is difficult today to

say who these players will be. But today, some of the wireless

portals have done a pretty good job. Especially AirFlash, Wapmap,

Waply, and Wapaw. And as expected, portals sponsored by big

companies–about which we have read so many press releases–are

either non-existent or in a underdeveloped condition. Lucent’s

Zingo for example is just one page. It says, "Zingo

experimental portal. Status: presently offline and

inactive." And there is a Lucent logo. Many other "big

wireless portal initiatives" are still not out there.

Morning shows the day, did you say?

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