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Google Gets Into The Push SMS Business In India, Takes On MyToday, SMS Gupshup


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Google is making a habit of entering market segments in India that others have spent time and effort and money evangelizing: they did that to local language search and local business listings search, and now are trying to grab a piece of the Push SMS subscription pie. Via an email from a kind reader, we were informed about the launch of Google SMS Channels. Digital Inspiration had also written about it.

At the time of posting this, there are already 242 channels live on the site, many of them user created. As a publisher, or a sender, it’s a fairly simple process for creating an alert – just choose an available keyword, verify your mobile number, add an RSS feed as a content source, and you’re good to go.

The numbers, the numbers, the numbers
As we’ve mentioned earlier, the Push SMS business suffers from a problem of plenty – the more the number of users, the higher the cost. We’ve heard that bulk SMS rates have been coming down, and though none of the publishers or bulk SMS providers have confirmed this, we’re told that they’re now lower than Rs. 0.05 per SMS, or around $0.00108 (at Rs. 46.31 to the dollar).

If Google were to send as many as 10 million SMS per day, it amounts to a cost of Rs. 18.25 crores per year, which at the current conversaion rate is around $3.96 million. If the Rupee strengthens, then at around Rs. 40 to the dollar, it is around $4.56 million.

Do note that MyToday and SMS Gupshup claim that they’re sending more than 10 million SMS’ per day.

The monetization?
MyToday and SMS GupShup have tried to monetize the service with advertising. Netcore (MyToday) MD Rajesh Jain, in particular, has been evangelizing mobile marketing quite aggressively over the past couple of months, at several conferences. He’s coined a phrase called “Invertising”, or Invited Advertising. According to his calculartions, the Mobile Marketing business can be Rs. 1000 crores (around $215 Million) per year in 2 years – with Rs. 600 crores ($130 Million) from Invertising, Rs. 300 crores ($65 Million) from SMS advertising and Rs. 100 crores ($20 Million) from WAP advertising. Of course, there are a number of assumptions involved with the estimation:

Click on the image for an expanded view, or take a look at his presentation here (PDF). What I’d like to know is – what are the current CPM and fill rates for MyToday and GupShup?

The Search-Alert Opportunity
Mobile content and search startup Zook has already implemented alerts around their local search results. Sameer Shisodia, founder of Zook informs us that they are enabling SMS alerts related to local business search results. For example: for a query “Shoes Deals”, one  can select a city (Bangalore), and set up alerts for those. Google provides a similar service with RSS feeds for Google News Search results; They can monetize by incorporating SMS alerts for local business search, like Zook. However, Zook doesn’t appear to have an option for publishers.

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Related:
Analysis of the Cost of Push SMS Services


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  • http://www.mobme.in Sanjay Vijayakumar

    Wow – This is interesting. :)

  • http://www.vfirst.com Vijay Shukla

    Thanks for the update.

    While one certainly needs a great vision and deep pockets to start SMS subscription channels, specially in India where the mobile penetration is significantly than the internet penetration.

    However, the key to success is the number of SMS pushed in a day. The key to success in the answers to the following questions:

    1. How well the subscription service provider knows its customers? In other words, how deep is the profiling of the customer base?

    2. How well the cost of push SMS is managed? (not going after long term and very high commitment and thereby compromising on business agility)

    3. How well the subscription service provider makes the content relevant and uniquely available for the target audience? (e.g. there are more than 10 ways of receiving cricket score on one’s mobile – relevant but not unique! Update on cooking tips for kashmiri food – unique but may not be relevant!)

    Best, Vijay Shukla
    vijay.shukla@vfirst.com

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  • VasGuy

    20% or not 20% (Google news remains 20% for more than a year). It is going to hurt MT/GS and even the operators’ on deck services.
    But not today, as this is not reaching via internet to everyone. But who knows what it could become tomorrow.

    All this aside,
    I love the true “opening of platform” here. Our Indian VAS or telecom operators yet haven’t done such easy app/service launch !

    Potentially, this growing nicely will mean , revenue models could be challenged. I never saw any such fear when free content on SMS started. Google can do some mega attempts.

    $5M is not even a cost in Google’s cash books to make it big. I am sure Orkut eats lot more than that without any-direct-revenue yet.

    Surprise could be there if Google does not buy any of our today’s free service provider because:

    * They get enough users anyways. (This is very probable as even our current FSP are getting users without some extra ordinary efforts, just word of mouth and relevant content is good enough)

    * FSP are not able to grow at larger pace and get a very large lead. (case in point here is of youtube. Even if google had G!Video, youtube was growing in user traction much faster and we know what happened later)

    * FSP can not sustain the growth or volumes. (Challenge of bleeding when yr competition is google is very serious. I do not know if VC’s will give them money when Fall Street is needing a bailout. Also, ref to the comment above, I do not think it will at all be an issue for google.)

    * Service innovations are limited. (Google has gone into this war at different level. They are opening content issue to be solved by whole world. Unlike our FSP who have to keep partnering or generating whole lot of content. This is like can a branded content shop can generate user;s attention from a large tail of user generated content. This democracy is killer part in Google’s service) (Just in case a get 1 in 2 week alert for about 6 keywords that I have subscribed at Vakow)

    blah blah and more blah.

    The world is definitely interesting now :- ) for users, i said.

  • alok

    This is an awesome service! MyToday and other players need to take note definitely!

  • Lord Haw Haw

    My today guys need to stop being arrogant and come back to mother earth. Their dealings with providers is quite pathetic and arrogant.

    One guy who I was talking to wouldn’t stop talking and let anyone else speak. my platform is the greatest. blah blah blah… I hope google wipes these guys out…

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  • Dushyant

    Great analysis, nikhil

  • Sanjay

    I Think This is Very Good

  • naresh kumar

    it very good