Jumptap Raises $26 Million Series D To Take On Google In Mobile Search; Strengthens Ties to AT&T

Mobile search and advertising startup Jumptap has raised more than $26 million in a series D round led by AllianceBernstein. Existing investors General Catalyst Partners, Summerhill Venture Partners, Redpoint Ventures, Valhalla Partners, and WPP also participated. That brings the total capital raised to $73 million.

Jumptap us going to need all the gunpowder it can get. Mobile search is the next big frontier in search as more and more Web-capable phones hit the market. Witness Google’s recent deal to power Verizon’s mobile search. Nevertheless, only 7 percent of mobile subscribers in the U.S. use search. Going up against Google, even in a nascent market, is a tough proposition. But Jumptap thinks it has an edge. CEO Dan Olschwang says:

We have a little different approach. We present a more usable result on the mobile phone than incumbent search engines. We are not trying to take Web results and shrink them onto a small screen. If you are standing on a street and looking for Tylenol for your baby, you are not interested in the recent press release. You are interested in the closest open drug store.

Jumptap’s search algorithm tries to rank actionable results higher than others, and it tries to deliver results appropriate to the device from which the search is being conducted. It also delivers targeted search ads along with the results. Of course, Google understands these principles as well. Jumptap has one more thing going for it in its quest to sign up mobile search deals with phone carriers: it is not Google.

The wireless carriers are wary of Google. But Google can pay them to overcome that fear, as it did with Verizon. Google can afford to pay Verizon more than Verizon could ever hope to make on its own from mobile search, at least in the short term. That may be an attractive short-term business proposition (Verizon can always take over default search when the contract with Googel expires and it ios a bigger business), but it risks ceding the mobile search business in the future.

Olschwang warns mobile carriers:

You give away your monetization ability, your understanding of the customer, and you transition your understanding of the customer to the other party,. In three to five years, Google won’t care about your traffic. It will train the customer to go directly to Google.

That message is resonating with some carriers. For instance, AT&T, which is a Jumptap partner, is about answer the Google-Verizon deal with a new deal with Jumptap. When I asked Olschwang about this, he couldn’t confirm any details other than to say: “We are broadening our relationship with AT&T.”