Extra, extra! Gannett gets the (text) message
The nation's largest newspaper publisher wants to zap sports scores and stock quotes to your cellphone.
SAN FRANCISCO (Business 2.0) - The delivery boy used to toss newspapers on your lawn. Now he's sending text messages to your cellphone.
On Tuesday, Gannett, the publisher best known for flagship USA Today, struck the first-ever deal between a major newspaper chain and a mobile search firm. A three-year marketing agreement with Palo Alto-based 4Info will make it easy for readers to get up-to-the-minute sport scores, weather updates and flight information sent to their mobile phones.
Several months in the making, the Gannett-4Info agreement underscores the changing ways -- and places -- in which consumers expect to access media.
The deal was made possible by two converging technology trends: wireless short codes and mobile search. While both have been around for a while, the combination of the two makes for a particularly easy way to get information while on the go.
Short codes -- five-digit phone numbers designed for wireless data services -- allow users to send information queries in a simple text message, instead of using cumbersome cellphone Web browsers or signing up in advance for wireless alerts at a PC. Mobile search is an adaptation of the Web's search-engine technologies to the needs of cellphone users.
Starting in early February, USA Today will run ads in its sports, weather, and finance sections encouraging readers to send text messages with queries such as "Lakers," "GOOG," or "UAL 2767" to a short code managed by 4Info. Within seconds, users will receive an automated text message back with the score of the latest Lakers game, a Google stock quote, or the status of a United flight.
Though the codes will initially appear only in USA Today, the deal is expected to slowly expand to include some of Gannett's other publications. The service will be available on all U.S. carriers and will be free, except for any charges users incur by sending or receiving a text message.
Short codes have taken off in the U.S. since last June, when Sprint (Research) and Verizon (Research), the last holdouts among major U.S. carriers, started supporting third-party information providers' use of the system. Before that it was possible to receive information by text message, but it usually required signing up for alerts in advance on a website while using a PC.
Short codes, by contrast, only require a text-messaging-capable cellphone to use, and can serve up information on demand.
"We've experimented with mobile search over the last few months," said Gannett spokeswoman Tara Connell. "We're always on the lookout for new ways to get information to customers in ways they want it."
Across the U.S., newspapers have battled dwindling circulation as younger readers turn to other sources of news. While USA Today's circulation is holding steady at 2.3 million, Gannett is eager to attract younger readers.
According to the Pew Internet & American Life Project, almost two out of three cellphone subscribers between the ages of 18 and 27 use text messaging, while only 7 percent of cellphone subscribers over 60 send text messages.
Over the last year, mobile search has become one of the hottest areas in wireless. Unlike Web search engines, which scour billions of Web pages for information, mobile search focuses on simple, preprogrammed search for common requests, like stock quotes and movie times.
"Mobile search is rapidly becoming a logical choice for consumers who want to have instant access to the information they need, whenever they need it," said Jack Williams, president of Gannett Digital in a press release.
Google and Yahoo have introduced versions of their services tailored to cellphones. And venture capitalists have funded a raft of new companies like 4Info eager to tailor information to users on the move: wireless startups received an estimated $1.3 billion in 2005.
While most consumers use text messaging to send notes to friends, U.S. wireless data services took off last year thanks to promotions like text-message voting on "American Idol." Revenues for U.S. wireless data services grew 38 percent from $4 billion in 2004 to $5.5 billion in 2005.
Under Tuesday's agreement, neither Gannett nor 4Info are paying anything, but 4Info anticipates eventually making money from contextual advertising, much like the text ads that appear in Web search results. For instance, a user that sent a query for a stock quote could receive a response with a line that said "brought to you by E-Trade," with a link to a wireless trading application. Any time a user clicked on the ad, 4Info would receive a small fee.
"Sometime later this year we will start working on a revenue model for this," says 4Info CEO Pankaj Shah. "Right now we are focused on distribution, and this was a great first step."
While the business model is still being worked out, Gannett's message has come through: Text messages are a viable new medium to reach readers. And where there are readers, advertisers generally follow.
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