Local mobile search? Hold the phone

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tickets from the online service. It similarly has a deal with Stubhub to sell tickets to sporting events. Eventually, 4Info would like to partner with companies like Starbucks or Peet's for placement in local searches for coffee, for example. A searcher might see a command to hit Reply 1 for the nearest Peet's.

"The advertising world on the Internet somehow needs to be ported to mobile devices--and that's what we're doing for local directory and real-time information sources," Shah said.

In many ways, mobile search faces tougher demands than conventional Web search, however. Providers have much smaller real estate to deliver results so they have to be exact, with consideration of immediacy and the user's location.

"The advertising world on the Internet somehow needs to be ported to mobile devices--and that's what we're doing for local directory and real-time information sources."

--Pankaj Shah, CEO, 4Info

For this reason, advertising is a black diamond. A future scenario would be to take a cell phone user's personal information--where a person lives, search history, income, current location--and use it to deliver targeted promotions. A New Jersey resident who searches for movie times in Manhattan could receive a coupon for the nearest parking garage and an ad for a local restaurant.

Still, this kind of service would have to be delivered with the consumer's permission, given current laws against wireless advertising. For this reason, the industry is still figuring out how best to approach the advertising equation.

"There is a type of ad model for the cell phone, just not the type thrown up without the consumer's permission," said John Styers, Sprint's director of data communication services.

"We have to be very careful on how we do this so it's not abused, so when you're paying for something you're getting what you want," he added.

Premium fees are the lowest hanging fruit immediately for cell phone carriers like Sprint. Styers said Google likely will charge a small premium to consumers for its SMS service once out of beta and those fees will be split with the carrier. Google denied any plans to charge, however.

Other wireless carriers see a bigger opportunity in a new mobile advertising business on the order of commercial search for the Internet.

"Carriers are treading cautiously with respect to Google and Yahoo, because they could own the relationship with the advertiser," said Fast's Baker. "The companies that recognize that Yahoo built Google's brand, they want complete control of the economic environment of their mobile portal."