Microsoft Corp.'s $44.6 billion bid Friday to buy Yahoo Inc. could potentially set the stage for yet another battle with search goliath Google Inc. - this time, on cellphones.
That's the next battleground for search as more people begin to use their phones to surf the Web, lured by faster wireless networks and devices such as the iPhone. Mobile search is nascent today, with the majority of people still using their phones for basic communication. But all three companies have been aggressively expanding their cellphone efforts over the last year.
Google said in November that it would create its own mobile phone platform and is bidding against incumbent wireless carriers in the ongoing auction of spectrum at the Federal Communications Commission. At the Consumer Electronics Show in January, Yahoo emphasized its mobile platform, and Microsoft introduced a voice-activated cellphone search that allows a person to say the word "movie" and receive a list of nearby theaters.
Meanwhile, start-up companies are moving into the fray - Cambridge's JumpTap Inc. provides search services for companies like Alltel Wireless, Virgin Mobile, and international operators and has raised $46 million over the past three years. Mobile search company Medio Systems Inc. in Seattle counts Verizon Wireless and T-Mobile among its partners. And Boston's Go2 Media Inc. provides local search services, trying to help people find on-the-go information, such as nearby restaurants and hotels.
"Why do you go after the heavyweight in their own weight class?" said John du Pre Gauntt, senior analyst at eMarketer. Mobile search is "where Yahoos and Microsofts of the world say - 'hey, this is ground that is still contested ground.' Nobody has that slam dunk."
In the world of online search, Google has an undeniable lead over its competitors, fielding nearly 70 percent of all search queries in December according to Web analytics firm Compete Inc. But most people with cellphones don't use them to reach the Internet. And only an average of 5.9 percent of all mobile phone users used search in the three months ending December 2007, according to mobile media company M:Metrics.
And no company is clearly dominant, according to M:Metrics. During that three-month period, each company reached a small percentage of the total population of mobile users. Google commanded 3.5 percent; 2 percent for Yahoo; 1.4 percent used a wireless mobile carrier's homepage - which could be powered by companies like JumpTap or Medio; 0.2 percent used Go2; and 0.5 percent used Microsoft's mobile search offerings.
What gives start-ups a fighting chance against goliaths like Google is the fact that wireless carriers have been reluctant to cede control of search to the powerful Internet search engines. After all, Internet providers like Comcast and RCN haven't benefited much from the advertising dollars that have made Google a giant.
"They get a flat fee for their Internet service, but for the thousands of dollars you spend through your PC each month they get nothing," said Dan Olschwang, chief executive of JumpTap, which powers search for 20 wireless carriers worldwide.
Although small now, mobile searches could be a lucrative business in the future. According to eMarketer, 411 million people will use mobile search worldwide this year and bring in $221 million in search ad revenue, projected to grow to 901 million users in 2011 and $2.4 billion in search ad revenue.
That's only a small fraction of overall advertising revenues, but du Pre Gauntt said mobile search could represent a $100 billion opportunity, if the local advertising dollars that today flow to billboards, print media, and other outlets end up in the most local venue of all - the screens in people's pockets.
But even as upstarts manage to score partnerships with carriers, Internet heavyweights are expanding their efforts both with wireless carriers and on their own.
Google, for example, plans an aggressive future move into mobile, and already offers its services on phones in various ways.
And the potential combination of Yahoo and Microsoft could position the companies to compete more powerfully, too.
"A whole bunch of things you can do on a mobile, like location-based advertising and contextual advertising, are things that you can't do on a PC," said John Byrne, analyst at Technology Business Research Inc. "It's something that's going to be increasingly significant."
Microsoft has recently focused on mobile and currently powers the search function on Sprint phones as well as the mobile search that anyone can access from a cellphone Internet browser.
"As people now increasingly access the mobile Web and get access to information and mobile content from device, it's going to become more important," said Matt Champagne, Microsoft's director of mobile for online services group.
Yahoo has made mobile search one of a handful of priorities in the new mobile space, according to Lee Ott, global director of mobile search.
"Yahoo has, for example, a half-billion users on the PC today; when we look at mobile we're looking at a much, much bigger world because the number of phones outnumbers PCs," said Ott, who added that the company has partnerships with more than 20 wireless operators to power their searches, offers its own mobile search portal, and recently disclosed a deal with AT&T.
But whatever happens, cellphone searches won't be the same as Internet searches. So, people using a small screen and numeric keypad will be searching for different things.
"When you search for wallpaper on the mobile phone, you're not looking for wallpaper for your house," said Rob Adler, chief executive of Go2. "When you look for pizza, you're not looking for the definition of pizza."
Carolyn Y. Johnson can be reached at cjohnson@globe.com.
Correction: Due to a reporting error, a Sunday business story misnamed the chief executive of go2 Media. He is Rob Adler.
