Google Phone

Although there’s nobody claiming that Google has build a platform and an alliance of companies with the expectation that they’ll fail, more people are switching on to the fact that the search giant needn’t necessarily sweep the handset board with Android in order to come out near the top.  As they’ve done in the 700MHz spectrum auction - pushing the FCC to include contract clauses for open-access that will benefit Google no matter whether they win (or even bid) or not - the sheer threat of Android is likely to force rival manufacturers and OS designers to step up their game and, Frank Hayes of TechNewsWorld believes, mimic some of the third-party applications and polished web experience their new competitor is promising.

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From small suggestions big rumors grow; after a flippant post over at UK paper The Guardian, talk is growing of Google’s possible plans to buy out Skype from auction giant eBay.  Article author, Jemima Kiss, suggests that negotiations are already in process, with eBay seemingly wanting to rid itself of the VoIP service it has found surprisingly hard to monetise:

“This makes sense on a number of levels, particularly because it fits with Google’s ambitions for disrupting the mobile industry through its new open mobile phone development platform Android, and for eBay - which was recently forced to admit that it had paid too much for Skype” Jemima Kiss, Guardian

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In the build-up to Android’s announcement, many analysts and commentators alike have put forward the idea of cellphone contract where watching adverts subsidises or, in some predictions, completely funds the monthly line-rental of the handset itself.  Existing business models (albeit on a far smaller scale), including the UK’s “Blyk” and Virgin’s “Suga Mama” scheme, have have moderate success but nothing on the same scale as some predicted for the gPhone.  Well, today we have Android and the promise of an open-source OS and software suite, but if you were hoping to cancel your direct debit to whichever carrier currently owns your soul, think again: Android project leader Andy Rubin has gone on record calling the idea of an advertising line-rental model “crazy”.

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Just as happened with the iPhone, the prophesied Google cellphone is causing pre-emptive waves across newsrooms and blogs as various agencies sift through the scant evidence and clamour to have their say.  Today it’s the turn of the New York Times, who are keen to differentiate between the “revolutionary” and “customer experience redefining” iPhone and Google’s potential next-step into the mobile marketplace.

No longer is this step a rumour; it’s become a matter of when and not if.  NYT’s Miguel Helft is quick to label the search giant’s intent: using mobile ads to broaden their market share.  If anything, Helft makes it sound like, where Apple planned a revolution in the cellphone industry, Google aren’t particularly bothered what industry they’re entering, just as long as it caters to their role as advert and search provider.

“Google wants to extend its dominance of online advertising to the mobile Internet, a small market today, but one that is expected to grow rapidly. It hopes to persuade wireless carriers and mobile phone makers to offer phones based on its software” Miguel Helft, NYT

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We’ve already talked about the potential impact ad-revenue funded cellphone contracts could have on an industry built around high-return tariffs and costly add-ons, but Business Week are next up to cast a speculative eye over the possibility of a rival network in which customers swap their own attention for those all important bundled minutes.

Key to the concept - and you just know it’s Google that’s fingered as having the background and wherewithal to handle such a monumental task (and make people love it) - is tailored advertising.

Business Week points to existing, far smaller scale endeavours such as Blyk in the UK or Virgin Mobile’s “Sugar Mama”, both of which give free network time to consumers willing to receive ads from marketing partners; they also highlight Google’s capacity to turn even this opening gambit upside down, leveraging their integration of search, geographical location and historical interest to massively focus specific messages that are correct for time, place and - most importantly - functionality present on a mobile device.

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We’ve talked quite a lot here on Google-Phone about potential revenue schemes by which non-traditional carriers might monetise subscribers, and yesterday Google used YouTube - which they acquired last year - to trial what analysts are calling the first major sign that the search company intends targeted advertising to fund the gPhone. The adverts, which are contextually themed to each video and overlaid relatively discretely at the bottom of the frame, disappear after a few seconds if not clicked on, and so far occur only sporadically through viewing rather than affecting every clip.

The belief is that this, coupled with Google’s ongoing trials of ad-revenue supported mobile service, could potentially be the answer to the issue of how best to serve adverts neither too intrusive nor avoidable; analysts are saying that cellphone screens could display such advertising when users are dialling or surfing the net:

“It showcases the fact that you can do ads that are unobtrusive in at least one format with video. It very well could be that you could use a derivative of this to handle cellphones. It does look like Google is getting closer to bringing out that property” Rob Enderle, Technology Consultant

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