THE LEADING Internet search engine and the most accessed website in the world--Yahoo!--has set foot in the Philippines in a bid to conquer another realm of cyberspace: WAP or the Wireless Application Protocol.

Yahoo! content will be made available via Globe Telecom mobile phones' WAP services in June. Yahoo! Asia inked a mutual exclusivity deal--particularly a co-branding agreement--with iAyala, a wholly owned subsidiary of Ayala Corp., to provide Filipinos with Yahoo! content via WAP services to Globe Telecom Handyphone customers.

Zapping data over mobile phones isn't entirely new in the country with the short message service (SMS) for global system for mobile communications (GSM) networks having been around for some time. The Philippines eventually became the text messaging capital of the world. Globe Telecom's SMS traffic analysis report said that Filipinos send 14 million messages a day, much higher than 600,000 messages sent per day in North America, the 1 million messages in Australia and the SMS traffic equal to an entire month in South Africa (GSM Association).

Yahoo!, listed in Nasdaq as YHOO, is the most popular search engine on the Internet. It claims to offer a comprehensive branded network of services to 120 million individuals each month worldwide.

The agreement indicates that Globe subscribers with WAP-capable phones will have access to the services of Yahoo! Asia such as Yahoo! News, Yahoo! Mail, and my Yahoo!, a customizable, web-based service that allows users to select and aggregate information such as news, stock quotes, weather updates and other features in one centralized location.

"I think we have always liked to establish a local presence (in the Philippines). Given the market is mature enough, and given a new business model, this is an opportunity available to us. We have to watch the market very closely as Filipino Internet users increase and as online advertising and other online businesses start picking up," said Savio Chow, vice president and managing director for Yahoo! Asia.

iAyala announced that Globe customers who access Yahoo!'s services through WAP will only be charged Globe's standard airtime tariffs for WAP services.

"The question of pricing is an evolving one, particularly because this is a very new area (WAP services). The only thing we know right now in the area of WAP is that prior to GPRS (general packet radio service), it will be basically priced on airtime (tariffs)," said Gerardo C. Ablaza Jr., president and chief executive officer of Globe Telecom Inc.

Asked if Yahoo! Asia talked with Globe competitors prior to the deal, Chow replied that he talked to "several people" but, he added that what made Yahoo! Asia decide to pursue an agreement with Globe was its being a major player in the country and its wide subscriber base.

"So one consideration here is always the brand--a very large, well-known and big brand to help us," he stressed.

Chow added that the mutual exclusivity deal means that Globe Telecom cannot ink deals with Yahoo! competitors while Yahoo! cannot work with Globe's competitors. He added that the deal is good only for a certain period of time. Both parties, however, were tight-lipped on the duration of this multibillion-peso deal as well as the specific amount of investment agreed upon.

"Co-branding is one way of working together. There's exclusivity: I cannot go to Smart and do the same thing with them, they (iAyala and Globe) cannot go to my competitors for the same thing," said Chow.

As IT press alarmed both Globe and Yahoo! Asia that the exclusivity issue might defeat the very essence of open connectivity of WAP, both parties stressed that the deal expires on a certain period so that, eventually, both of them become more open to the Philippine market.

Asked how Yahoo! Asia intends to generate money over its content on Globe's WAP services, Chow replied that the potential of advertising should not be undermined. Yahoo!, through Globe mobile phones, would provide benefits and services for customers and it is that provision of benefits that brings revenues to Globe. Yahoo!, in return, needs Globe by way of advertising interest.

"I think the potential for advertising is abundant. The phone is very personal, we carry it with us all the time so that it creates different opportunities for advertisers to reach a particular individual. Carriers will be able to track down the subscriber faster," said Chow.

A question was raised regarding Globe Telecom's capacity to carry value-added services such as WAP. Globe claimed that a "significant development" took place late February when the National Telecommunications Commission granted Globe another 5 Mhz of frequency. Globe claims that today it has already a total of 15 Mhz, a situation, it says, "that's very new."

"In a couple of months we will be exploiting frequencies and that's what makes us confident with value added services like WAP. It is going to strengthen our ability to maintain an offer," said Ablaza.

Jack Madrid, executive director of iAyala, stressed, however, that success of companies like Yahoo! is not just about technology, but about bringing together content and community.

"We view this agreement as a big step forward for current and future WAP phone users in the Philippines. The deal will make Yahoo! Asia's offerings more widely available and bring the Philippines into the wireless Internet space," said Madrid.

Yahoo! Asia continues to expand. It has four offices in the Asia Pacific region. It has already established offices in Japan, Korea, Australia and the rest of the Asian countries. It has offices in Beijing, Singapore, Hong Kong and Taipei. Chow estimated that Yahoo! Asia has about 25 localized websites around the world carrying various languages.