Yahoo kicks off mobile ad test

Yahoo Inc. ratcheted up its sponsored mobile search program on Wednesday, launching a beta test for all users of its mobile portal in the United States and United Kingdom.

All mobile phone users with access to the Yahoo Mobile network will now see paid results when they search for certain terms. The full beta test follows limited trials in the two countries as well as a broader rollout in Japan, said Michael Bayle, senior director of monetization at Yahoo. The company plans to gradually expand the search terms involved.

Both Yahoo and Google Inc. are working to expand their lucrative search advertising businesses to the still-emerging mobile Web. The challenges include creating a good user interface on a wide variety of phones and determining the value of a consumer's click on a mobile search result. But the rewards may be rich from the billions of cell phones in the world, said Greg Sterling, principal analyst at Sterling Market Intelligence, in Oakland, California.

"It's just an enormous opportunity, and the needs of mobile users are more immediate in most cases than those on the Internet," Sterling said.

In Japan, mobile search ads have commanded higher prices than those on the Web, Yahoo's Bayle said.

Because of limited screen space and network speed, users generally won't see as many sponsored links on their phones as they do on the Web, according to Bayle. Yahoo may place one paid link at the top of the results list and sprinkle in a few more farther down, he said. But where it makes sense, such as when a user searches for "car rental," there may be more paid results, he added.

The ads will behave differently, too, because many companies don't have a mobile Web page. Clicking on a link generally will take the user to a WAP (wireless application protocol) page created by either the vendor or Yahoo, Bayle said. That may be a full mobile commerce page or just one that gives a store location or a button to place a call to the merchant.

The paid search results represent the first ads on Yahoo's mobile presence, which includes mail, messenger, news and other content, Bayle said. Analyst Sterling thinks it's likely to be the first step toward a wide variety of mobile Web advertising that includes banner ads, coupons and other elements. Google Inc. also is venturing into paid mobile search, he said.

"It represents the mainstreaming of... advertising in the mobile environment," Sterling said. Consumers probably will respond well to mobile advertising as long as it's relevant to them and there isn't too much of it, he said.