Is Google Celling Out?

By Aaron Goldman, VP Marketing & Strategic Partnerships
Appeared In MediaPosts’s Search Insider

THERE'S BEEN A LOT OF coverage lately regarding Google's efforts to crack the mobile search nut. As the Internet landscape solidifies and more and more inventory is locked up via long-term deals or acquisitions, it appears Google is looking to the mobile frontier to extend its reach and drive incremental ad revenue.

A recent piece in Investor's Business Daily highlights Google's struggles to land deals with the wireless carriers, who view Google as a competitor.

So, first and foremost, when it comes to online advertising, are we talking about ads that appear on a Web site? Or ads that are displayed via Internet connection?

Currently, many of the large carriers are building out portals designed to keep users within their domain while browsing for music, video, and other content on their mobile devices. Some, like Verizon with its Get It Now service, have even tried to create their own search engines. The last thing the carriers want to do is give people access to third-party search engines and have them steered away to other properties or content they can't monetize.

So far, it seems like they're getting away with it.

As I learned on Monday during a panel discussion at the Search Insider Summit, over 80% of all mobile search and content interaction in the U.S. takes place "on deck" (within a handset application) as opposed to "off deck" (within the mobile Web or WAP environment). According to Omar Tawakol, chief advertising officer at Medio (a company that creates such applications for carriers), this contrasts sharply with the mobile landscape outside the U.S., where the ratio is flipped--and approximately 80% of all mobile search and content interaction occurs "off deck" on the open Web.

Déjà vu 2.0

Does this situation sound familiar? It's reminiscent of the apprehension Web publishers showed when Google AdWords and AdSense distribution was introduced. Then, the question was: Why syndicate ads or search functionality from Google when you can show your own ads and limit the navigation options of your users to keep them in your domain?

The answer quickly became clear. Search options provide a better user experience--no one property can satisfy everyone's needs at all times--and Google can monetize the ad inventory better through its relevancy algorithms.

The quagmire the wireless providers find themselves in today also resembles the early plight of Internet Service Providers, which also happen to include some of the same players in the mobile space. AOL, Comcast, SBC and others poured millions into creating portals for their users--complete with e-mail addresses -- in an attempt to keep subscribers engaged with their own content and, of course, ads.

We all know how that panned out. And it's only a matter of time before the Verizons of the world abandon their strategy to restrict their subscribers to their VCast portals and open the doors, er, floodgates, to a broader and richer user experience.

Gotta Hand It To 'Em

With the large carriers continuing to resist comprehensive partnerships, Google has turned to handset manufacturers and smaller carriers to try and carve out a piece of the pie.

Just last week, Helio and Samsung introduced a new phone featuring Google maps and satellite positioning technology.

This deal is just the tip of the iceberg, though. And, assuming larger partnerships with the major carriers themselves are still a ways off, a focus on continued handset innovation and search integration could provide a short-term lift and force the collective hands of the carriers.

Imagine a phone with easy-to-navigate search functionality that doesn't require opening a browser and visiting a search engine. Now toss in Google Talk and Gmail--as easy to operate as text messaging. Add Google Calendar, Documents, and Spreadsheets and Palm may soon be looking over its shoulder.

Taking it to the next level--how about a camera with simple tagging and uploading functionality to post to Picasa or YouTube? And throw in a direct-connect jack to view pics and video on TV.

You could also add a feature to enable blog posts on the fly through Blogger. Or incorporate Dodgeball (Google's mobile social networking service) to locate friends and family nearby.

Money Talks

There's no question many consumers would clamor for a Google phone. Google already has a hip brand, and with some cool unique features, the GoogPhone could really take off. And the functionality would generate a good deal of content interaction which, in turn, would lead to ad revenue.

One of the biggest reasons search has been so widely adopted by consumers on the non-Mobile Web is because there is too much content to navigate linearly. With the proliferation of short-form video and major companies creating WAP-enabled Web sites, the need for robust mobile search has arrived.

Another lesson learned from the larger Web is that the best advertising is relevant and non-interruptive. This goes double in the mobile space. With a smaller screen and shorter attention span, consumers will not tolerate invasive ads. Google is primed and ready to bring its subtle, targeted ads to the mobile environment both from a sponsored search and contextual perspective. Google has already firmed up its Mobile AdWords platform--offering both pay-per-click and pay-per-call placements. Contextual can't be far off.

By sharing in the search ad revenue, handset manufacturers and carriers are poised to unlock a new revenue stream and stand out in the wildly competitive (and somewhat fickle) wireless space. The first mover--especially if it could lock up any sort of exclusivity with Google--could reap some serious rewards.

The only question is how long the major carriers will hold on to the belief that they can create a better model than the one that's proven itself time and time again on the Web and in the mobile environment abroad.

Hopefully, the carriers will stop being cell-fish and embrace Google like the rest of the world has. Then they could really raise the bar.


Copyright © 2008 Resolution Media, Inc. All rights reserved.