February 8, 2008 4:00 AM PST
Is mobile really a sure thing for Google?
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With half the world's population soon owning a cell phone, the opportunity to reach more people on the Web via a mobile device is huge. Research firm Gartner predicts that worldwide mobile advertising revenue will grow from less than $1 billion last year to $11 billion in 2011. Google has already been adapting its Web search, mapping service, and advertising tools to work on mobile phones. And it's even bidding in a U.S. auction of wireless spectrum and developing software for mobile phones.
The company has also spearheaded the Open Handset Alliance--which advocates open standards for mobile software--in an effort to coordinate its work with that of handset makers, chip developers, application developers, and cell phone operators.
Because Google has dominated search and advertising on the traditional Internet, the expectation is that the company will also take the mobile market by storm using the same tools and the same strategies. But shoehorning its existing Web tools and applications onto a tiny mobile phone isn't going to be easy. If Google is not careful, it may find itself chasing some new, innovative start-up that figures out how to out-Google Google in mobile.
"In some ways Google is now the incumbent," said Farhad Divecha, director of the search and mobile marketing firm AccuraCast. "Their search products and advertising tools aren't the best right now, so there's a good chance someone could come in and do it better."
Back to basics with search
Google first came on the scene a decade ago with a new search algorithm that could serve up better and more relevant content to users than had ever been done before. So while other companies, such as Alta Vista and Yahoo, had been in the search business for years before Google came along, it was this giant leap forward in the user experience that catapulted the company to success.
It is not surprising that search was one of the first tools that Google adapted for cell phones. And by most accounts the tool works fine. When used with the Google Maps application, mobile users can even search for local restaurants and get directions to each establishment.
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But critics of Google's mobile search tool say its results aren't always as relevant as results from a desktop Google search. Another common complaint is that Google provides search results from regular Web pages and tries to trans-code them for mobile phones. Often these sites don't render well on certain phones.
Yahoo Go, a similar application, is considered more robust and more user-friendly than Google's search tool.
"Yahoo has been far more aggressive than Google in doing business development relationships with handset makers around the world and thus has more direct handset and carrier deals," said Greg Sterling, principal of Sterling Market Intelligence. "Of the two companies, Yahoo is probably farther along in some respects than Google is."
Google is also limited in the information it can gather about a subscriber's usage patterns and location because carriers are unwilling to share subscriber data, said Jorey Ramer, founder and vice president of corporate development for JumpTap, a company that provides mobile search and advertising software used by mobile operators to develop their own search services.
JumpTap, which is currently working with 16 carriers around the world, is able to access this user data because it collaborates directly with these carriers, Ramer said. Google, on the other hand, could become a direct competitor to carriers, including Verizon Wireless and AT&T, if it wins spectrum licenses in the 700MHz spectrum auction now being conducted by the Federal Communications Commission. What's more, Google's business model depends on its consumer brand and its direct relationship with consumers. Ceding too much control to Google makes carriers nervous because they don't want their services to become commoditized.
"Carriers appear less likely in the near term to partner with the portals (such as Google) because they know what they will have to give up in exchange," said Brian Cowley, chief executive of mobile ad provider Ad Infuse.
Google has also adapted some advertising products to mobile, including its AdSense program, which matches ads to a site's content, and AdWords, which matches key words in ads with search results. These services work well on a mobile platform, according to Google. But the problem is that their results are difficult to track, which means advertisers or Web site owners may not be able to tell the effectiveness of their advertising campaigns.
One reason is that "cookies"--the little digital tags that are left on a computer when someone searches or clicks on a Web page--expire much sooner on cell phones than they do on PCs. Sometimes they are even blocked entirely by certain carriers. And most handsets are shipped with cookies disabled by default. Without these digital tags, it's hard to track clicks.
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