Facing a backlash over the meltdown of their stocks, Net execs are tap-dancing around the considerable hype and hope of wireless. It may be the 'Next Big Thing'...or maybe not.
While wireless is still the next Internet frontier, Net executives are becoming more cautious about hyping revenue from yet-unproven areas, such sending ads promoting the nearest GAP or Starbucks to wireless users as they walk down the street.
The caution comes as executives of Internet media firms, which rely heavily on advertising, are facing a backlash over the meltdown in their shares, some of which have fallen 90 percent from highs a year ago.
After hyping the first stages of the Internet, including online advertising potential, executives appear to be a bit more cautious about new areas, in hopes of trying to avoid another Internet bubble.
As online advertising dries up, many Internet media companies have been forced to temper their growth forecasts and look for other revenue sources, such as high-speed Internet access and wireless Internet.
"We thought 2001 would be a different landscape, but we are now seeing even more intense advertising skepticism (toward wireless)," Jamie Byrne, DoubleClick's director of emerging platforms, said at an Internet world trade show in Los Angeles.
"The reason we are not further along is because of a lack of compelling services," he added. "The content platforms that carriers are putting forth are not compelling."
Several issues need to be ironed out before executives put their buzz machines behind the sector, including the content currently available and the type of devices most people use.
Currently, many mobile phone users can access news, email, financial quotes and city guides thanks to alliances struck by companies like AOL Time Warner, Yahoo, Microsoft's MSN and others with wireless players such as Sprint PCS Group, Research In Motion, OmniSky and AT&T Wireless.
Web access a 'mess'
However, analysts have said these deals were badly put together and that carriers have to change the way they approach the sector.
"Mobile operators have not thought about what people want and they have made it difficult to get things. They have just made a mess of it," said Kevin Dulaney, an analyst at Gartner Group.
"If you look at Sprint's phone today to get weather, you have to go through three or four screens. It's easier to call someone up." Applications have to be accessible much more easily - often within the first or second screen a user sees, he said.
While the control in the nascent industry appears to lie currently with the carriers, analysts say that will have to change if the industry is going to take off.
"They (major Internet media and service providers) have to begin to exert their prowess. They are experimenting but they haven't shown leadership. It's more reactive," Dulaney said.
DoubleClick's Byrne agreed. "They have been tenuous about adopting advertising, but they can drive it. They have to figure out how advertising is going to fit into their business models and adopt," he said.
