Wapreview recently ran an interesting article on Yelp Mobile, a service featuring user reviews of everything from restaurants to services and businesses. What I find particularly interesting is that they are sponsored by Palm. To me sponsoring web sites, particularly in the wireless domain, seems to be a win-win situation for the site, the sponsor and the mobile web in general.
On the one hand it’s obviously a win for the sponsored site. On the other hand it’s also a win for the sponsor in several ways. Big web companies like Yahoo and Google and also hardware manufacturers like Palm, Nokia and others live from their image. In my opinion this is one of the reasons why they offer so many services for free.
Sure, they do advertising on those sites in many cases. Nevertheless, I think many services might not be sustainable simply from the advertisement money they generate directly. I rather suspect that the main revenue stream of those companies is the advertising included in some of their other products which are loosely coupled to their services like search or sold ads on other web sites (e.g. Adwords). Free services get additional attention for profitable services which in turn generate more money which in turn again generates revenue to sponsor free services. A nice ecosystem.
Yahoo’s mobile activities around the recent Football world cup is another good example. They surely invested a lot of money into the mobile site for the event. At the same time they also advertised their involvement and thus generated attention for themselves and the mobile web. So a lot of people did not only become aware of Yahoo but also of the mobile web.
Many companies want to expand into the mobile space. So their sponsoring and advertising does not only help their brand but also helps to expand a market which is still in its infancy.