SAN FRANCISCO - Search and advertising still pay the bills at Google, but as the company moves into new markets such as mobile and Web apps, increasingly its fortunes will be tied to developers outside the Googleplex.
At this week's Google I/O developer conference here the company will be reaching out to thousands of these third-party developers in an effort to enlist their help in creating robust ecosystems for up and coming Google products. How successfully Google is able to tap into this developer culture to fuel growth in Google products will determine Google's standing in the competitive landscape.
In mobile, this means that Google will have to get app developers to think of its Android smartphone and OS first rather than as an afterthought to developing apps for Apple's iOS platform. It also means creating an ecosystem that pushes a cloud-based computing architecture with Web apps at its core.
On each front Google faces challenges. Despite the fact that it now dominates sales of smartphones in the U.S. and around the world, Google's Android platform appears to be struggling to keep the attention of developers who worry about the platform's fragmentation issues. These developers also worry about their ability to make money from the apps they create for Android.
Meanwhile, when it comes to Web apps, Google faces the challenge of improving the Web's programming standards--in particular so that Chrome OS helps illustrate the power of Web apps rather than their shortcomings.
Android or bust
Google's Android mobile OS has had a meteoric rise over the past couple of years since the first Android smartphone was introduced in late 2008. The OS has quickly climbed from zero market share to owning close to 23 percent of the worldwide smartphone market, according to Gartner. And Android's march toward dominance is expected to continue. Gartner projects that Android could snag as much as 38.5 percent market share worldwide by the end of this year. And by the end of 2012, the Android OS may account for roughly 49 percent of all smartphones shipped throughout the world.
Meanwhile, Apple, Google's closest competitor, is expected to trail Android with about 19.4 percent market share worldwide at the end of 2011. And about 18.9 percent market share worldwide by the end of 2012, according to Gartner.
Despite this growth, smartphone app developers seem hesitant to fully embrace the Android platform. Instead of developing new mobile applications for Android smartphones and tablets first, developers are still looking to Apple's iOS platform initially. And yet, the number of apps for Android smartphones in particular is growing. Some experts predict that the number of smartphone apps in the Android Market may even surpass Apple's App Store this summer in terms of the total number of mobile smartphone apps it has available.
But despite the fact that the Android Market is catching up in volume doesn't necessarily mean that Android has become a top priority for developers.
"It's not just the quantity of apps, but it's the quality of those apps," said Scott Webster, who writes for CNET's Android Atlas blog. "And it's about whether developers are thinking of Android first when coming up with new capabilities."
While developers clearly recognize Android's long-term importance in mobile, they see Apple as a more lucrative path initially.
In a recent survey of more than 2,700 app developers in April conducted by IDC and Appcelerator, a software tool kit provider, app developers indicated that creating applications for Apple's iOS products took the highest priority for them. And Android followed as a second priority.
"Interest in Android has recently plateaued as concerns around fragmentation and disappointing results from early tablet sales have caused developers to pull back from their previous steadily increasing enthusiasm for Google's mobile operating system," Appcelerator said in a statement when the report was released.
Fear of fragmentation
Nearly two-thirds or about 63 percent of respondents said that device fragmentation in Android poses the biggest risk to the platform. This isn't surprising especially for smaller developers who have fewer resources to sink into their endeavors.
Paul Zimmer, founder of FlatPack, which developed a game for the Apple iPad, said that his company is holding off on developing apps for the Android platform. The No.1 priority for him and his small team right now is getting new games and apps out for the Apple iPhone and iPod Touch devices.
"The concern for us with Android is the fragmentation issue," he said. "With Apple we're guaranteed a discrete number of devices, screen sizes and device capabilities. But with Android the testing burden is so much higher because there are so many different variables."
Scott Kveton, CEO of Urban Airship, a company that offers developer tool kits for creating apps across platforms, agrees that the fragmentation issue is a deterrent for many developers.
"There's the fact that manufacturers are coming out with different devices with different screen sizes and different hardware capabilities," he said. "But there's also the fact that so many devices are running different versions of the Android OS. And the carriers and handset makers have much more say over which version runs on which devices."
Indeed, there are several Android handsets in the market that have still not gotten the Android 2.2 Froyo update let alone the latest 2.3 Gingerbread Android update.
Kveton said this is not the case with Apple, which controls the software platform updates and ensures that the same software release is made available for all compatible iOS devices at the same time.
Another major barrier for some developers is the fact that it's difficult to make money from Android apps. Zimmer admits that making money in any major mobile app market is getting harder, especially for smaller developers. The sheer number of apps in either the Apple App Store or the Google Android Market make it extremely hard for a small company to break out and to be discovered by users. But with Android it's even harder to make money because the Android user base is less likely to spend money on apps, he said. He said that even large app developers are making most of their money on the Android platform from advertising.
Even with these challenges, Urban Airship's Kveton notes that Android will likely overcome these barriers as the platform matures.
"Android lags Apple by about 18 months in many areas, including in-app purchasing and push notification," he said. "So in another year or so, I expect Android to catch up in terms of how developers view the platform. There will be so many devices out there, that no matter how much of a pain it might be, they'll have to develop for it."
Kveton predicts that the U.S. developer community may continue to focus on Apple for a while longer. But he believes that markets outside the U.S., such as Europe and Asia, where Android is growing rapidly, will likely view Android as the No. 1 platform to develop for within the next year or so.
"Google may not have to do anything and the developer community will gravitate toward Android in some markets," he said. "Just look at Microsoft. It didn't matter much if the Windows platform was a pain to develop for. They still were able to build an ecosystem because there was so much money to be made there. And with Android's installed base growing so rapidly, it offers the same thing."
Web Apps: The next frontier?
Android is only one facet of Google's developer interests, though. At the same time, the company also has long used Google I/O to tout the idea of Web-based applications.
Web apps serve Google's interests in different ways. Of course it's got its own--the online Google Apps suite that competes with Microsoft Office for $50 per user per year. Former CEO Eric Schmidt called Google Apps the company's next big billion-dollar revenue opportunity after search.
But search is the real cash cow at Google today, and the company's broad advocacy of Web apps probably is more closely aligned with search. The more time people spend online--and they will when compelling destinations such as Facebook lead them there--the more times they'll end up at Google's search box.
Web apps are maturing, but there's a huge amount of work to be done--standardization, browser support, developer training. There's healthy development, but today it takes Herculean effort to build something as complex as Google Apps.
It's not clear exactly how the arrival of Chrome sat at Microsoft, but it certainly didn't lower the priority of producing IE9, which has put Microsoft back in the browser game. Over the next years, with the gradual spread of Windows 7 and its successors, expect IE9 to spread as a mainstream browser.
Google has an interesting reason to build Chrome: to further its other businesses. Google can--indeed, it does--use Chrome as a mechanism to launch new technologies to the Web-app world. Among them are SPDY for faster server-to-browser communication, Native Client for faster execution of Web-based programs using a computing device's built-in hardware, notifications to alert Gmail chat users to new messages.
Getting Web developers and rival browser makers to adopt such technologies isn't easy, but it's easier when Google has a browser it can use hammer out the technology and to show the benefits. And it also gives the company a real seat at the table during Web-standards discussions.
Web programming is a fixture of the programming world, competition with native apps notwithstanding. A less certain future awaits Google's Web-only operating system, Chrome OS.
This software benefits from the vast amount of Web programming under way, giving it a big head start over operating systems that must start from scratch. But Chrome OS also is a gamble that people will find a use for devices that can handle Web apps and nothing else.
Chrome OS strives to reach beyond limitations of present browsers with features such as offline storage for working when there's no network connection and Native Client for better performance.
The trouble with those options, though, is that developers must be recruited to support them, and it's not clear whether they will unless Google can convince other browser makers to add support. The top two browser makers, Microsoft and Mozilla, have shown little enthusiasm for Native Client, for example.
Google is a patient company, though. And meanwhile, there's Android.