So, it has been a while since I have had a thought...a Thursday Thought that is. My every week idea has slipped to once a quarter...I will work on that.
So, I just read the cNet News.com interview with Deep Nishar, Dir of Product Management at Google. The title of the article is "Google's ambitions going mobile." I thought that it has been an interesting few weeks with regards to Google and their mobile ambitions.
First, Eric Schmidt, Google’s CEO in an interview with Reuters says that cell phones should be free. He said that cell phones are becoming more like personal computers, and that advertising should be a viable form of subsidy.
Next, we hear from Chris Sacca, head of special initiatives at Google, criticizing cell phone carriers for attempting to block Google from delivering their downloadable applications to carrier customers.
So Mr. Schmidt wants carriers to give the phones away for free, very much implying that the future revenue stream on mobile devices is in advertising. I am curious about the "advertising should make them free" model. The last catalog that I got from Dell was not offering free computers so that I can search for stuff on Google. The Best Buy catalog was not offering free HDTVs so that I can watch TV ads. I understand the objective, and think that this may be an early salvo for Google to test the waters of the concept of offering their own phones. I have long believed that they would have their name etched onto the outside of a phone, not just on an app that appears therein.
Then Mr. Sacca is complaining that the carriers are trying to block Googles access to their customers. Was this an attempt to paint the carriers into a corner? - The internet is free, tear down those walled gardens and give us your customers. Mr. Sacca feels that a carrier wanting to have some control over what a subscriber downloads to their handset has "scary, scary implications". From a carrier perspective, the notion of hundreds of thousands of phone calls into their customer service call centers (vs. the application developers) when the applications do not work have scary implications.
Next, Mr. Nishar discusses location based services as the "second big category we are focusing on". Not too much of a surprise here. LBS and advertising will go hand in hand. LBS will increase the value of an ad impression exponentially. The cell phone makes things individual, the location makes things relevant. Advertisers will pay top dollar for both. When asked what is next for Google in the mobile market, Mr. Nishar says "I think you'll see us do more with location-based services, like developing more locally flavored products." Advertising is Googles product.
So, free phones + carrier compliance + location flavored products = huge mobile advertising push for Google. Think about it...there are many more cell phones connected to the internet worldwide than there are computers. Google's business model is advertising. In order to sustain their dominant position in the advertising business, Google needs to dive deep into mobile.
The question...err Thought that I have is this, will Google, and if so when, make a strong move into the mobile space? When will we see a Google MVNO branded Moto RaZR offered for $10 per month with unlimited advertising? I think it is on the horizon. What do you think?
