Google Goes Mobile

By Peter Koeppel

Google will be leading an effort to develop software that will make mobile phones more like mobile computers with improved Internet access. Indeed, according to a recent New York Times article, it's looking to transform the mobile industry in the same manner that the PC changed the world of computing in the 1980s. In order to accomplish this goal, Google will provide outside software developers with access to their phone's (the so-called "G-Phone") functions. They hope this will encourage software developers to create PC-like programs and services for the phones.

The company recognizes that the Internet is going mobile, and it has aligned itself with leading telecommunications and technology companies to make and market their phones. A group called the Open Handset Alliance expects to sell the Google-powered phones in the second half of 2008, according to the Times story. Critics point out that other companies have tried to form similar types of alliances and failed and that Google will face stiff competition from established players such as Microsoft, Nokia, Palm and Research in Motion. In addition, the two largest cellular carriers in the U.S., AT&T and Verizon Wireless, are not part of the alliance.

Google is looking to become the dominant player in mobile advertising, as they are in online advertising. The Mountain View, Calif.-based powerhouse hopes that by making it easier for consumers to access the web from their cell phones and by making the experience more like that of a personal computer, it will be able to increase the reach of its advertising. Google has said it likely will share ad revenue with the wireless carriers.

ENERGIZING THE MOBILE INDUSTRY
"Just like the iPhone energized the industry, this is a different way to energize the industry," Sanjay Jha, COO of Qualcomm, said when interviewed for the Times story. Jha also said Google's efforts will bring more Internet features to moderately priced phones. By allowing outside software developers access to its Android software platform, Google also hopes they will create new types of devices that have both cell phone and wireless Internet capabilities. "As a result of the platform, you'll be able to do amazing things on your phones that you've never been able to do before," says Google CEO Eric Schmidt.

Google is going up against some strong competitors, but the company certainly has the clout and resources to gain a significant foothold in the mobile marketplace. Google's surging stock price clearly indicates that Wall Street and investors anticipate that Google will be able to diversify its revenue base from new businesses outside of online advertising. In my opinion, mobile advertising has the potential to be as big as online advertising for Google. It will be interesting to see how Google's venture into mobile plays out over the next few years, since it has the potential to transform the industry.

Peter Koeppel is president of Koeppel Direct Inc., a full-service media buying agency based in Dallas. He can be reached at (972) 732-6110, or via e-mail at pkoeppel@koeppelinc.com.