Targeted ads on the go

Earlier this year, AvantGo announced its partnership with CompUSA to debut the first national wireless coupon; users show a salesperson a PDA featuring the coupon to get the discount. Companies such as Intel and Northwest Airlines have jumped on the bandwagon.

New York-based Vindigo provides an interactive entertainment guide for 20 major cities. When users update the service, Vindigo uses the opportunity to upload local business information, including relevant ads.

But is selling mobile advertising profitable? Most companies currently rely on alternative revenue streams, says Alan Reiter, an analyst at Wireless Internet & Mobile Computing, a mobile-technology information firm. "No one's really rolling out nationally, so the money isn't there yet," he explains.

AvantGo derives most of its revenues from licensing software, with profitability projected for the first half of 2003. Although Vindigo won't disclose numbers, David Shankman, the company's vice president of marketing, says that its revenue streams are also diversified among software creation and licensing, as well as advertising and the sale of aggregate information.

Reiter says that most statistics about wireless advertising are much too optimistic. "There are privacy and other issues that need to be resolved," he says. "Do carriers and service providers have a right to send you ads you haven't agreed to receive? The Federal Trade Commission is looking into that now, and [its decision] will have a great impact on the future of wireless advertising."