EDM08: MOVING TOWARD EVERYTHING EVERYWHERE
OVERVIEW
EDM08, held in London in June, was organized this year with two key objectives in mind. First, we wanted to expand on the previous year's focus on mobile search. We sought to do that by developing a program that addressed what we see as key components of the mobile search ecosystem: operators, advertisers, technology, and content.
Second, we wanted to emphasize the importance of innovation in the directory and search space. Innovation seems particularly important for established firms which are vulnerable to start-ups that adopt technology rapidly. We sought to emphasize innovation by the introduction of an Innovation Showcase at which businesses with innovative products and services could present their concepts to investors and other delegates. Unfortunately, today we are in an extremely difficult investment period, as reflected by the announcement that for the first time in thirty years, not a single venture capital-backed firm raised capital in the US through an IPO in the second quarter of the year. Yet despite these difficulties, and in some instance because of these difficulties, innovation goes on.
This is a period of tremendous uncertainty and transition across a broad range of the information services market, from directories to search to mobile to fixed communications. Though the stock market prices can react to events instantaneously—for instance, when a buy-out offer is announced—stock prices more often adjust to market changes over a period of time. So for instance, we see that the stock price of directory publisher Yell has declined more or less steadily over the twelve months ending July 1, 2008--86.3% over the past year, 84.2% over the past six months, and 61.3% over the past three months. Likewise, shares of directory assistance provider telegate have fallen 52.3% in the past year, 23.5% in the past six months, though it has risen 13.8% in the past three months. Not all directory and search stock prices have fallen, so there is some good news. On the upside, we see that Baidu's stock price has risen 89.1% in the past twelve months, lost 18.5% in the past six months, and gained 16.3% over the past three months.
Stock prices are set based on the market's assessment of future prospects of each organization, though assessments of future prospects may differ more widely in uncertain times. When Bill Gates stated last year that no one under fifty would use yellowpages in five years, many agreed with him, though many—particularly in the yellowpages business—disagreed vehemently. If the declines in prices for Yell and telegate are any indication, it seems that over the past year the market has come to share Gates' opinion, putting tremendous pressure on a wide array of directory firms. While the impact of market perceptions of publicly traded firms are readily visible, market perceptions impact privately held firms as well. A key example of a privately held firm suffering from overall market difficulties as well as from difficulties in the directory space in particular is kgb (nee INFONXX), which filed a registration for public sale on December 14, 2007, and has yet to go public.
While every firm hopes for improvements in overall market conditions, each firm needs to adjust their businesses to reflect not what the realities used to be and not what they wish realities were, but what the business realities are today. Many firms have made these adjustments, though some firms and organizations have yet to do so.
Each of the participants in this space has their own perspective on the market as a whole and on their own offerings in particular, and each positions their offerings and their firm accordingly. How one perceives each offering depends in no small part on how one sees the market.
CONCLUSION
Delivery of phone numbers by themselves is no longer a challenge—the challenge is to employ technology to deliver richer communications and information that was only imagined just a few years ago. Unlike what they say in the movies, if you build it, they may not come, so the challenge everyone faces is how to create services and business models that make delivery of these new services economically viable.
Different participants in different segments of the directory and search space--operators, advertisers, technology providers, and content providers--have different perspectives and strategies, so a good strategy for one firm doesn't necessarily represent a good strategy for another. One of the biggest mistakes we have seen some firms and industry associations make is to view the Internet, WAP, SMS, and other mobile services as a threat. We don't believe it's helpful to view these as a threat, we think they should be viewed as reflections of the future and as opportunities.
Google reported that it has seen fifty times more searches on Apple's first generation iPhones than on any other mobile handset, and the rush is on to deliver more web-friendly mobile phones in the form of next generation iPhones, Android devices, and other competitive handsets. Key to iPhone's success is user experience. We believe that firms who can improve the user experience, through social networking, mobile-specific content, greater relevance, more content, semantic search, targeted ads, and through other means, are on the right track.
FURTHER INFORMATION
For further information about mobile search and other information services, detailed coverage of each of the EDM08 presentations, or information regarding future conferences and activities, please visit us at www.EuropeanDirectoryMarketplace.com or contact us as follows:
Info at EuropeanDirectoryMarketplace dot com OR +1 (703) 506-1220
posted at 11:39 PM
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