Wednesday, February 22, 2012

Forget Google and Apple. Is the real money for operators in expanding local communication?

Maybe we need to forget about Facebook, Google, Amazon and Apple.  Maybe the real money is not in the epic fight for platform dominance.

Maybe the real money, at least for operators, is in the next tier of internet sites – local banks, media outlets, online communities and local shopping sites. Today most of these sites offer only one-way communication – they communicate with and sell to their readers through a blog or articles or banner ads or the occasional video.

What if these sites could expand and then monetize their communications? What if they could include voice and texts and video calls, all through their own site?

photo by photostock
Let’s take an imaginary site aimed at parents.  There are lots of these in reality, and they do quite well. Parents are an engaged and constant audience. However, the audience is also not large enough to make serious money off advertising alone.

But what if active commenters on this imaginary parenting forum could call each other? What if a resident expert was available for voice or video consultations … at a price?  Would people outside major cities pay USD 5 to talk to a specialist for a couple minutes?  I bet they would.

Voice is also a boon to advertising.  It is hard to convince people to buy complex products with a text-based ad. And parents often need to make complex changes – new house, new car, new insurance, new appliances.

This is already happening. Google is seeing this now with its click to call ads – more than 10 million last month, mostly for companies already dependent on calls, like florists and insurance companies. Cable provider Comcast has seen 270 percent greater click through on mobile than desktop click to call ads.

But don’t be fooled by Google’s success with national players. Operators are perfectly situated to take advantage of smaller, more local markets. They have the local sales forces that Apple and Facebook do not. They have the billing capacity (and trust) for micropayments or easy on-site billing, especially outside the US.

They have the customer support organizations necessary when you offer complex communications.

There is a window here for operators, but it will not stay open forever. Eventually, someone else will buy minutes in bulk to sell to local site. Or another local player will develop a local sales force, or another company will start consulting with sites on how to expand their communication business.

The time is now for operators to transform the internet from an ad-based ecosystem to a communication-based one.


  1. This requires a marketing mentality that understands the customer and end users. Can you point to one service/application where they have excelled at that? Also, the competitive WAN model showed how central procurement and subsidization (800, VPN, prepaid cards, etc...) where highly profitable and captured the marginal value of every customer. Anyway, the googles, facebooks, zyngas, groupons are all winning the big data battle now and into the future.

    1. I believe the operators enterprise services are good example of customer understanding, packaging and foot-work from the operators. However, they need to lift it from only selling "this is how you can reduce your cost on data and voice," into "this is how we can help you grow your business with X% by adding communication services."

  2. it make sense in some way! and from my personal view also think the operators should try their best to build the platform for 3rd parties services or developers. That's an open platform model like the Internet, but also you can find in the internet the winner is not so many at least compared with the loser on it. but the internet model make everyone believe that he/she will be successful. so this is an ecosystem friendly model. Operators need to think more on how to provide the capabilities from the network and help the upstream players to stick on this platform. The identity management, service authentication & authorization, billing, etc. are very valuable things from operators, based on those capabilities the operators can re-sell its others from its network, voice, messaging, presence, location, etc.

    1. Exactly, by exposing their assets and making it very simple to add advanced communication services to your web site or application, and sharing the revenues with these providers, you are adding a completely new revenue channel for developers, who in many cases (at least today) are only making money on advertising.