Google In Position to Control Mobile Future

Jagdish Rebello of iSuppli talks about how Google is using it’s classic strategy of giving things away for free to turn the mobile advertising and search markets to their favor.

By pursuing a strategy of working with the mobile chain rather than against it, Google Inc. has a strong chance of success in its bid to transform the wireless business from its traditional model of being driven by voice subscriptions to a new approach of being supported by broadband-based mobile advertising revenue, according to iSuppli Corp. If Google can execute this strategy, it stands to rewrite the rules in the $1 trillion wireless industry.

Google is really attacking the entire value chain, from the the potential to become an ISP to offering an operating system to launching it’s own hardware Google is involved in every aspect of the ecosystem that supports their core business (ads and search).

During the past three years, Google has continually targeted the mobile communications industry with a series of initiatives. From offering free Wi-Fi services, to developing a free and powerful open operating system for smart phones—Android—to offering free maps and turn-by-turn navigation services, to introducing a Googlebranded phone—the Nexus One—the Internet search giant is revolutionizing the mobile value chain in an attempt to unlock new value and to expand an industry desperately searching for the next inflection point.

Like the rest of the mobile value chain, Google is actively seeking to uncover new user behavior patterns and to drive social networking services through the promotion of cloud storage and computing, mobile advertising, and a variety of location-based services. All of the free Google offerings are driving toward this goal.

We’ve even discussed how Google’s free navigation application is a game changer in the industry and as Rebello points out, “The beauty of Google’s navigation initiative is that its offering, while free, will result in profits via mobile search and advertising.”

These moves by Google are intended to drive the increased use of mobile searches and prompt new social networking behaviors that leverage cloud storage and mobile advertising. Given its overwhelming dominance in the Internet search application market, Google is now poised to leverage its search capabilities with Location Based Services (LBS) to drive mobile search results targeted at the location of the mobile consumer. Clearly, Google’s strategy is to expand into areas where it has a competitive advantage due to its dominance in search and advertising. This, coupled with mobile advertising and mobile commerce, has the potential to unlock tremendous value for the mobile user and to drive new revenue opportunities for Google.

Because of all these factors, Google is well positioned to reshape the wireless business in its own image.

via [iSuppli]

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