Mobile Industry: Beware of Google?

Is Google’s strong brand a boost or a burden to mobile operators and providers that offer its popular search engine on their portals? This article hints that “many wireless firms cringe at Google’s mighty brand”. Moreover, the article echoes the fears I’ve heard in the marketplace that companies are worried Google’s search (but really any search, for that matter) will direct “customers to content or information outside their domain”.
Well, I’ve heard convincing arguments on both sides. Second and third-tier mobile operators can certainly benefit from aligning with a strong search brand as it saves them from investing money they don’t have to ‘wow’ users with search capabilities or compete with familiar brands. Tier-one operators with strong brands can have it both ways. They can comfortably co-exist with a strong brand (consider the partnership between T-Mobile and Google), or they can tie up with white-label providers to distance themselves from Google and preserve their own brand dominance (the strategy pursued by Verizon Wireless, for example).
There are no right or wrong choices here. Ultimately, the choice of a mobile search engine (and who says there should only be one?) is dependent upon the operator’s business rules. However, there is a growing concern in the industry about brand dilution, revenue-share and just how much of the all-powerful analytics should remain in the hands of branded search engine providers.
Why the worry? The article (quoting new figures from Informa Telecoms & Media) points out advertisers are warming to mobile marketing. It forecasts that mobile ad revenue will jump to $11.3 billion worldwide by 2011, up from $871 million this year. Search-related mobile ad revenue will climb to a whopping $1.5 billion in 2011, up from just $3 million this year. (James: pls bold this last sentence for emphasis.) Moreover, an Informa analyst connects the dots in Google’s roadmap and argues wireless firms worry about Google’s mobile goals because advertising drives the search giant’s business, effectively putting Google at odds with operators’ own business plans. And Google is a formidable foe, ranking #1 in mobile search according to research firms M:Metrics and Telephia, the article says. It further hints that “local search is one area where Google will likely butt heads with wireless firms”.
The article ends by listing some recent Google acquisitions in the mobile space, supporting its underlying argument that Google’s real ambitions collide with wireless companies’ business models. However, the article is short on analysis and fails to tell us where the conflict is. The article also neglects to mention Google’s recent acquisition of Neven Vision, which gives Google an edge in image capture and search, as well as others that will vastly improve Google’s ability to present and even broadcast mobile ads. Not to mention how Google’s tie-up with PayPal (through eBay) can, in theory, create a closed m-commerce space in which users can search, find and purchase without ever leaving the Google zone. (I also miss a hard look at Yahoo, the other branded search engine company that has made a big push into mobile search). Nonetheless, the article is a brave documentation of the battle for eyeballs that ironically pits mobile companies against the same search providers that can boost their brands and their capability to deliver a good search experience.

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