(InfoWorld) - Spending on mobile search and display advertising will skyrocket in the coming years in the U.S., finally making cell phones a viable vehicle for this type of online marketing, according to research firm The Kelsey Group.

Spending is expected to total $33.2 million this year and grow at a compound annual rate of 112 percent through 2012, when it will hit $1.4 billion, Kelsey Group analyst Matt Booth said.

This means that major players in online advertising, such as Google, Microsoft, and Yahoo, as well as the major mobile carriers, will battle it out in a market that is uncharted territory. "Between now and 2012, the opportunity [in this market] is wide open," Booth said.

As the market morphs from tiny into sizable, Internet companies and carriers are learning as they go, figuring out how to compete and partner with each other, win over advertisers, and better serve mobile subscribers, he said.

The boost in spending follows technology advances, such as the increasing availability of mobile broadband services, the expansion of GPS capabilities, and improvements in device usability at the hardware and software levels, he said.

For Google, the broadening of the mobile channel for search advertising comes at a good time because it currently has ad inventory backed up awaiting increased traffic, Booth said.

Its no secret that mobile is the next big frontier for Internet services and advertising, although the markets explosion has been prematurely predicted in the past.

Kelsey Group expects mobile Internet users to grow at a 20 percent compound annual clip in the U.S. through 2012, when there will be almost 92 million people going online via their cell phones.

Previous unfulfilled expectations havent discouraged Google, Yahoo, Microsoft and other big Internet companies from adapting in recent years their PC-based online services like e-mail, instant messaging, photo managers, and search engines for mobile devices.

Yahoo, for example, has a suite of mobile services and applications called Yahoo Go for Mobile 2.0, while Google offers mobile versions of several services, including Gmail, Maps, YouTube, Picasa, Blogger, and search. Meanwhile, Microsofts mobile offerings include Windows Live Hotmail, search, Spaces, and Messenger.

Beyond adapting services to mobile devices, Google has also expressed interest in bidding in an upcoming U.S. Federal Communications Commission auction of 700MHz wireless spectrum set for January. There have also been rampant rumors that Google is developing a cell phone, but the company hasnt officially acknowledged those plans.

(InfoWorld) - Hewlett-Packard launched a server based on Intels new Tigerton quad-core Xeon processor Thursday, battling IBM for customers who run data-intensive business applications like enterprise resource planning and virtualization software.

HP announced the rack-based ProLiant DL580 G5 and the blade-shaped ProLiant BL680c G5, each using four of Intels Xeon 7300-series chips.

Compared to HPs current ProLiant servers with dual-core versions of the Xeon or AMDs Opteron chips, both new servers are designed to better support virtualization, allowing users to handle their applications with a smaller number of servers than they need today, the company said.

The announcement comes less than a week before AMD is expected to launch its own quad-core server chip, called Barcelona. HP, Sun and other vendors are expected to use that processor in a range of new platforms for similar markets.

In the meantime, Intel is enjoying increased popularity for its Tigerton chip. IBM also chose the Xeon 7300 chip to upgrade its server lineup, combining the processor with its own X4 chipset instead of Intels Clarksboro chipset. IBM announced the System x3950 M2 server on Wednesday, also touting its virtualization abilities.

IBM designed the server for fast-growing businesses so it can easily scale up for larger deployments, such as data centers and ERP or CRM applications from providers like SAP and Oracle, said Jay Bretzmann, manager of product marketing for IBM. Compared to systems based on its X3 chipset, IBM will add memory and an internal USB interface for loading embedded virtualization software.

"As cores started multiplying, the need for memory started growing, particularly in the virtualization space. So we offered a low entry price point and head room to grow," Bretzmann said. Together, those improvements will allow users to get greater utilization out of their servers instead of having the computers sit idle while waiting for new jobs, he said.

"There are so many applications that really scale. Databases are the flagship; if you write a database that doesnt scale well, youre not going to be in business for long. But virtualization allows you to load multiple OSes and achieve the flexibility and utilization that are key for quad-core technology," he said.

IBM intends to keep its X4 chipset in the market through 2009, then offer a fifth-generation version by 2010, he said. IBM plans to launch the System x3950 M2 server at high volume in the fourth quarter.

HP is selling the DL580 for $9,219 and the BL680c for $9,669. IBM will announce pricing for the System x3950 M2 when it is shipped, in the fourth quarter.