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Fear of Yahoo spurs Google, NTL to race into mobile networks - Sky may follow.

NTL has put in a bid of close to a billion pounds for mobile virtual network, Virgin, while Google has decided to launch itself as a mobile brand, setting up its own MVNO. Both are clearly reacting to rumours that Yahoo will go live as an MVNO within three months, leaving them without a presence in wireless communications.

Presence, of course, is the magic word which is driving all this.

The NTL bid was confirmed this morning, as an £817 million offer, sending Virgin Mobile shares up eight per cent, with investors expecting a higher bid from rivals.

The list of rivals isn't short. Since NewsWireless first reported Yahoo's intentions to get into the phone market - see  "Who will buy Skype?"  and  "Mobile phones next?" - the reality of mobile as a key to the future of the Internet has dawned on the big email and IM carriers.

Yahoo's plans are still secret, but the Yahoo brand will be launched on mobile phones all over Europe within weeks, rather than months. Google's new European vice-president, Nikesh Arora, has decided, belatedly to respond by cashing in on the Google brand - before joining Google, he was Chief Marketing Officer and a Member of the Management Board at T-Mobile.

Other recent announcements which bear heavily on NTL's decision will have been the takeover of Skype by eBay, the launch of Google Talk, and the growing number of instant messenger links into established landline telcos.

One analyst told NewsWireless that the odd one out might well be Microsoft's MSN, which desperately wants to be part of "mobile presence" but feels the MSN brand isn't strong enough to battle it out with companies like Virgin Mobile and (when it launches) Yahoo.

"There's also a perception in some parts of Microsoft's Windows Mobile software department that they don't want to set up shop competing with their customers in the mobile business," said this analyst, asking for anonymity.

The term "presence" derives from the ability of instant messenger networks to show when an Internet user is online, using the computer.

The software which tracks this is still clumsy, but far more helpful to an advertiser than anything available in television or other advertising media, where it's a matter of guess work whether your message is being seen. All IM systems can tell when the user has switched to the IM window, and some can tell whether the user is using the keyboard.

Skype was the first to have an application programming interface which allowed users to put their presence status up on the Web, on their home pages. But till now, the only IM that actually shows that the user has their phone switched on, and logged in, is MSN, which runs on the Microsoft Windows Mobile smartphone platform.

The ultimate dream will be to know not only that the potential customer is online, but where in the world they are.

For this to happen, the Web must reach out into the mobile phone arena. By launching its mobile phone in Europe, Yahoo takes its first step towards being able to track advertising targets through real space, not just through cyberspace.

This is what is behind much of T-Mobile's plans to launch Web'n'Walk - providing Google-based Web browsing to mobile phone users. If linked to an advertising medium such as Google Adsense, it would become possible to track which retailer the target is nearest to, and offer that opportunity to a local advertiser. For example, if it is known that the user regularly stops at Starbucks, Costa could pop up an advert on screen pointing out that it has a special on latte, fifty yards away.

Potential buyers for Virgin, however, would include people like Sky, which was rumoured to be interested in Skype (eBay put in a bigger bid) and which has now bought EasyNet.

Reuters has suggested that, according to analysts at Bear Stearns, Vodafone Group Plc and France Telecom's Orange were possible counterbidders, "although others said both were likely to be deterred by antitrust concerns."

Contrary to the understanding of analysts at Seymour Pierce, the purpose of buying Virgin is not to acquire Virgin's pay-as-you-go customers, but the working network. Reuters quoted Jim McCafferty at SP saying: "Virgin Mobile does have customer-facing skills which the CATV (cable TV) companies lack. However, we question the quality of the Virgin Mobile customers which are typically low ARPU (average revenue per user) and may lack the income to buy other services," which is quite probably a valid point, but not what matters, long-term.

The assumption that a bigger offer will come along, however, isn't without counter-assumptions, mainly based on the fact that T-Mobile hasn't had a happy relationship with Virgin, and has tried either to pull out of the deal, or spoil it, on several occasions. It may be that under the new T-Mobile management, this uneasy working relationship will become closer, in which case, the buyer of Virgin gets a read-made brand and network - but it's equally possible that T-Mobile might want to re-negotiate, or even talk the value down to the point that it can take the brand in-house.