Tuesday, December 4, 2007

Google's Plan to Take Over the (Mobile) World

This post expands on my earlier post on online advertising and on Mobile advertising in particular. In the last year or so, Google has begun to aggressively go after the mobile space. I personally agree with them that mobile is the next big platform for technology and advertising. There really are three pieces to the Mobile puzzle - Hardware, Software, and Infrastructure. Google is making a very smart play for 2 out of the 3.

The Software Play - With the release of the iPhone, mobile as a technology and as a platform grew in leaps and bounds. The iPhone eventually (3G broadband speeds sometime in 2008) will be a full-fledged mobile web browser with the ability to download and surf the net at broadband speeds. The iPhone has already surpassed windows mobile as the most used mobile web browser today. Google's answer to the iPhone is the Android (See the Demo here) operating system it is developing. Based on open source software, Google will be giving it away to carriers- Verizon and Sprint are already signed up. This is the software play that Google is pursuing. If they own the mobile operating systems, they own a considerable amount of user information, and the interface for which the user will interface with the web. A considerable advantage in any space.

The Infrastructure Play - Google will be bidding on the 700 MHz frequency spectrum when the FCC auctions it off in the near future. This means that Google will be attempting to buy the frequency on which your cell phone functions on. This means that they will be able to control who uses the frequency and how much it costs- a huge completive advantage. There have also been rumblings and rumors that Google will attempt to buy a carrier such as Sprint, T-Mobile, etc. This really would enable them to close th gap in terms of controls user experience (Android), platform (carrier), and infrastructure (spectrum).

What about Hardware? Good question. The answer is that although the iPhone is revolutionizing handset hardware, there are really 4-5 key players in the mobile handset market. Mobile handsets in the past 5 years have been highly commoditized, and in some cases given away with sign up on a two year plan. This is the reason Google is making plays for Software and Infrastructure, but not Hardware.

Why a huge push for Mobile? With the hardware and software innovation that the mobile industry is going through currently, the next (and perhaps final frontier) for advertising will be mobile. Google is an advertising monster and clearly sees which way the industry is going. If they control infrastructure, software, and carriers- they will have already won the battle for advertising on mobile devices.

Prediction 1
Google will successfully win the auction for 700 MHz frequency spectrum.
Prediction 2
Android will be highly adopted by both users and carriers. Android will be the standard for mobile operating systems within 3 years.
Prediction 3
Google will become a Mobile carrier by buying a carrier or creating their own.
Prediction 4
Google will be a mobile advertising beast in the next 3-4 years.

This is what happens when really, really smart guys have almost unlimited amounts of money and capital...

Comments appreciated!


Anonymous said...

Looks like we have the next Microsoft on our hands. I'm a bit torn: I like to see a Silicon Valley company dominating, but I also hate Google because of their discriminatory (meaning you have little chance if you didn't either go to an Ivy League school) hiring practices.

In any case, I'm thinking it might be time to invest in Google stock (if you can't get hired by them, might as well profit from them).

*kicks self for not buying early on*

Mike Ouye said...

I totally agree. Google is not as hard as you would think to get in. A ton of people I know *could* of worked there.

Everyone I know has at least one story of them turning down an offer, or a buddy who got rich quick...