Mobile portals searching for sound revenue models will draw few users and will disappoint companies expecting them to drive traffic, according to a recently released report from Forrester Research. Instead of relying on portals for traffic, companies will link up with sites that orbit user activities to form what Forrester calls "mobile activity networks".
The WAP site owners that were interviewed for the Forrester survey believed they knew how to drive WAP traffic - by placing links at mobile portals. However, the mobile portals interviewed don't aim to drive traffic to other sites. On the PC-based Web, portals drive traffic because users need them, but in contrast, portals won't play the same role in the mobile Internet because user circumstances differ sharply. Mobile Internet users have no time, interest, or need to surf from WAP portals.
Driving little traffic, mobile portals will not be able to generate advertising fees or revenue-sharing to make money. Instead, they will have to cover their costs either by selling premium content or driving indirect revenue like boosted operator airtime and reduced customer churn. This reality will affect all four categories of mobile portals - operator portals, Web incumbents, mobile pure plays and white labels.
Only the biggest operator portals will survive, Web incumbents will keep costs low, mobile portal pure plays will disappear and white-label players will be swallowed, a Forrester analyst predicted. Instead of placing links and buying ads on mobile portals, businesses will most effectively drive traffic by teaming up with one another to form "mobile activity networks", which Forrester defines as "Mutual links between a group of mobile sites that orbit specific user activities."