Background Thoughts from Chairman Jain:From Wireless Week, January 31, 2000
Guest Opinion: Winning The Internet War
By Naveen Jain
Wireless carriers such as AT&T Wireless Services, Sprint PCS and Vodafone AirTouch are colliding with Internet superpowers like AOL, Yahoo! and MSN to become the future leaders of the wireless Internet. The new era of competition is between networks, regardless of whether they?re wireless or Internet companies.
How do wireless carriers expect to compete with the fast-paced Web networks? Carriers need to think strategically about portals and acquire the tools needed to fight the battle and win the wireless Internet war. They need to manage and drive value to their customer base by offering them additional services that decrease customer churn, build stronger user relationships and transform them from wireless pipes into end-to-end service providers.
It is important for carriers to avoid making the same mistake that 99.9 percent of all Internet service providers did in the 1990s by turning their service into a non-sticky commodity that customers could transition into and out of regularly. Carriers need to ensure that they protect their customer base and don?t allow Internet companies to take customers.
Many wireless carriers and Web companies still do not understand how to successfully implement a portal over wireless networks and their idea of a separate portal for just wireless devices demonstrates the industry?s na‹vet‚. Enabling one portal to be accessed from all devices is more important than developing separate portals for different devices.
Networks need to realize that Web portals were successfully established by offering users one place to go for personalized information such as news, weather, stocks, horoscopes, calendars, instant messaging and more. To have separate portals for computers, handheld devices and cars would decrease customer adoption and isn?t as logical as a single one that can be accessed from all devices at any time.
To be successful, carriers need Web-class portal services from first-class providers that have a competency in a vast array of technologies that include gateways from Phone.com Inc., Ericsson and Nokia as well as SMPP and SMTP. These portal services need to include:
Content services: general and personalized content that includes news, stocks, weather, sports, calendar and address book.
Communications services: device-independent instant messaging and e-mail that lets a user use their current e-mail addresses.
Localized services: services based on the exact location of the user.
Commerce services: the ability to purchase from your device over the Internet or from a traditional brick-and-mortar store using one-click purchasing.
Providers can customize the function and look of their portals for specific devices. For example, a portal could be used on a wireless device to receive specific promotions based on the user?s exact location and then make a purchase at the store with the promotion. Commerce is made easier on wireless devices by one click purchasing using personal credit card information that securely resides on the portal.
Naveen Jain is chairman, CEO and founder of InfoSpace.com, based in San Jose, Calif. The company provides an Internet content platform for consumers, merchants and wireless devices.
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COMMENT: Essentially NJ is preaching to the wireless carriers the benefits of having their own private-label portal (supplied by INSP) versus ceding the business to the AOL's and Yahoo's. I think that this highlights some central points and issues in INSP's mobile strategy:
1. INSP has recognized that if it goes head-to-head with the AOL's and YHOO's it will be crushed like an ant.
2. Therefore, the opportunity is to convince carriers to private-label their own portals through INSP.
3. Naveen uses an easy-to-understand analogy of the wireless telcos being like your ISP and the Yahoo's being, well, like Yahoo.
The question you really have to ask yourself is, as a user, would you be content to have your content experience more or less limited to that which your ISP is hosting?
Put another way, it seems Naveen is advocating the wireless telcos revert to the pre-internet user access model of proprietary dial-up services like (old) AOL, Prodigy, CompuServe.
Now, historically, telcos have been pretty dumb figuring out what users really want, and they're always trying to figure out ways to increase their commodity-pricing margins. So, initially, an INSP approach might have some appeal.
But here in 2000 and beyond, are you the internet user going to choose a mobile experience where the content is limited to that which your carrier (with INSP in the background) chooses to provide? (And we already know from Jain's article above and INSP IR that this will be the commodity content of phone #'s, sports scores, horoscopes, the same old stuff.)
Or, are you going to want access to the entire Internet?
I believe that the ultimate consumer (we) will be drivers this marketplace, and not the monopoly-mindset of the telcos.
Having said that, give credit to Jain for recognizing that the carriers have a real need to get some first generation service to the market, and here's INSP showing up with a handy offering. Also, if INSP is successful capturing a goodly number of first generation users, there is presumably a tactical option down the road for INSP to morph in a similar fashion as (old) AOL into (new) AOL.
Perhaps some of you others can visit a few of the competitors so we can try to figure out how their strategy and positioning differs. I'll volunteer to look at Wireless Knowledge, but can we get volunteers to look at the mobile internet strategies of AOL, Yahoo, and Microsoft Network? |
