A battle between mobile networks and internet giants like Google Inc. and Yahoo Inc. is looming as several mobile operators plan to block advertising on their networks.
One European wireless carrier told the Financial Times it has installed blocking software in its data centres and plans to start using it before the end of the year.
The software prevents most types of advertising from loading in webpages and apps, though it does not interfere with “in-feed” ads of the kind used by Facebook and Twitter.
The blocking technology was developed by Shine, an Israeli start-up, the shareholders of which include Horizon Ventures, the investment fund of tycoon Li Ka-shing.
Li also controls Hutchison Whampoa, which owns one of the world’s largest telecom groups.
“Tens of millions of mobile subscribers around the world will be opting in to ad blocking by the end of the year,” the report quoted Roi Carthy, chief marketing officer of Shine, as saying.
“If this scales [up], it could have a devastating impact on the online advertising industry.”
Marketers will spend almost US$69 billion this year on mobile ads — more than triple the sum they spent two years ago — research group eMarketer predicted.
Shine said it was working with several operators, including one with almost 40 million subscribers, but declined to name them.
An executive at a European carrier said it will initially launch an advertising-free service for customers on an opt-in basis.
But it is also considering a more radical idea that it calls “the bomb”, which would apply across its entire network of millions of subscribers at once.
The idea is to specifically target Google, blocking advertising on its websites in an attempt to force the company to share its revenues.
Google is the world’s largest advertising business, generating US$60 billion a year from search, YouTube, as well as services such as Google Display Network and DoubleClick, which deliver ads for third-party sites.
Many mobile operators are frustrated that digital media companies profit from their high-speed networks without having to invest in the infrastructure behind them.
Google said it would be unreasonable for mobile operators to block ads, arguing: “People pay for mobile internet packages so they can access the apps, video streaming, webmail and other services they love, many of which are funded by ads.”
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