MSNBC.com, one of the top U.S. news Web sites, said on Wednesday it will test an ad-subsidized news service for cellular phones in a bid to gain a wider audience among mobile phone users.
U.S. wireless service providers now put everything from Web surfing to video and music on cellular phones. Media firms have been eyeing this trend as a potential opening for using the mobile phone to expand ad revenue and viewership.
MSNBC.com, a joint venture of Microsoft Corp. and NBC Universal News, is one of the first U.S. media companies to test the theory with a three-month experiment that it hopes to expand into a full-on service by the end of summer.
It will launch the service on Wednesday at the CTIA wireless show in Las Vegas, where it hopes to discuss potential carrier partnerships.
Mobile providers including Verizon Wireless and Sprint Nextel Corp. charge monthly fees of $15 or more for sending video clips to phones.
MSNBC hopes to boost mobile usage of its site by adding photos and video clips that are popular among online users such as "The Today Show" and other NBC programs as well as slideshows and text articles, paid for by short ads.
"The whole point of bringing multimedia and photos is to attract the mainstream viewer," said Catherine Captain, a marketing executive at MSNBC.
"We didn't want to add one more charge," she said. "We think the mainstream public will move to an ad supported model."
According to MSNBC, only about 1 percent of its estimated 25 million monthly desktop Web site users also view its stories on cellphone browsers, which show a free text based news service minus the ads, photographs and video on its site.
Consumers already used to Web ads could accept the MSNBC.com model, if the commercials don't interfere with the mobile experience, said Yankee Group analyst John Jackson. But convincing cellular operators to sign on could be tougher.
"The real challenge here is rationalizing the business models of MSNBC and carrier A, B and C who all have different ideas about how to charge for accessing this type of service," he said.
Wireless providers have been cautious about mobile ads but some such as Sprint Nextel, which offers NBC clips through its streaming video service, have said they would look into whether customers want some free services in exchange for ads.
MSNBC seeks to keep its own direct relationship with consumers but also aims to work with service providers and could work on pacts for sharing the advertising revenue.
"What we'd like to do is end up crafting a business model with them rather than imposing something on them," said Dan Mucha, MSNBC's manager of business strategy and development.
MSNBC's service will first work only on Microsoft-powered cellphones and Microsoft's mobile unit will be the exclusive advertiser, but it aims to extend that to other phones and other advertisers after the trial period, Captain said.
Action Engine, a privately-held wireless software company is providing the technology behind the service. NBC is owned by General Electric Co. and Verizon Wireless is owned by Verizon Communications and Vodafone Group Plc.