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!

Google Buying Wireless Spectrums

Its been specualted for quite some time, but Google has finally gone public in its plan to bid on wireless spectrums. Wireless spectrums are the frequencies on which your mobile phone functions on. The 700 Mhz frequency spectrum is the one Google will be bidding on when the FCC puts it up for auction.

Its just another way that today's biggest and baddest company is attempting to break into (and takeover) wireless.

Here is the offical anouncement on the Google Blog.

Online Advertising... In a nut shell

I work in online advertising. It’s a great space to play in - I liken it to the wild, wild west – things happen fast and everyone shoots from the hip. How does it work and why are there so many companies and people making tons of money? The answer is YOU! As more people are becoming wired – blogging, news, sports, services, products, whatever – the marketplace for online advertising expands. Huge companies such as Google, Yahoo, and Microsoft are all making significant plays and acquisitions to get into the advertising space.

In the last 16 months, the following advertising companies have been acquired:

• aQuantive (Microsoft) - $6 billion
• Doubleclick (Google) - $3.1 billion
• Right Media (Yahoo) - $680 million
• Blue Lithium (Yahoo) - $250 million
• Tacoda (AOL) - $275 million
• AdECN (Microsoft)
• 24/7 Real Media (WPP Group) - $650 million

And don’t forget-

• Facebook (Microsoft) – 1.6% share of company was bought by Microsoft, valuing the company at $15 billion! (I hate you Mark Zuckerberg, boy genius)

Why such a flurry to get into Online Advertising? Unlike traditional advertising – TV, Print, Radio, etc – online advertising is performance based. You don’t just guess about what might work and try it like traditional advertising. Advertisers have the ability to target, optimize, and segment based off of actual performance and metrics. The online advertising space has really become a performance driven machine – convert or get out.

At one time ads were paid for at a cost per impression (CPM) rate. As the industry began moving towards performance, ads began being paid for on a cost per click basis (CPC). Today, the ultimate in performance based pay out is cost per action (CPA). Not only do you have see an ad, click on it, but you actually have to buy something in order for the ad placement to get paid. This is the reason that behavior targeting and optimization ad companies are getting bought like mad. If you have the ability to target and base what ads are being shown according to history – what they have seen and bought – or contextual as to what they are looking at, its very, very powerful.

Where its going? The next frontier will be mobile. This is obvious to me every time I walk down the street or ride the train. Everyone is now mobile wired. Everyone has a cell phone and everyone is always on it. As the mobile platform expands into a more viable advertising platform many things will change – how we buy things, how we pay for things, and how we advertise. This is why there is a huge push by Google and Apple to get into mobile – either with software (Google) or hardware (Apple).

One of the most interesting things I’ve heard is that Google is attempting to make a play for TV band that is being used for broadcast (its being phased out due to cable and satellite). They want to put mobile on it. Those guys are way too smart and have way too much dough.

Quick Glossary:

• Impression – View of an ad
• Fold – What a user can see on a page without scrolling
• CPA – Cost per acquisition
• CPM – Cost per mil aka cost per impression
• CPC – cost per click
• Media – Any page, email, search term, or placement that can be bought to place an ad.
• eCPM – effective CPM – Revenue made per user

Anyway, I’ll expand on a later day on Mobile. Comments Appreciated!

Android Demo!

So, google is not coming out with the GPhone. Its answer to the iPhone is instead, get ready- Software! Google is developing Android - a linux-based open source mobile operating system that they will be giving away to mobile companies. I'm unsure what their play is, but I'm guessing its mobile advertising. Its just more validation that everyone - including me - thinks that mobile is the next frontier for advertising.

Google's new open source mobile software demo:

Anyway, pretty cool stuff. Enjoy.

Initial Post

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