Wednesday, March 01, 2006

What Did Google CFO Really Say?

Yesterday, when Google dropped their "bombshell", the cheers were deafening. No, not from Steve Balmer, they came from the hundreds of companies with applications for the mobile industry.

It's interesting that 99% of the stories on Google announcement fail to mention what the CFO really said, "we see lots of opportunity in local and mobile". These reporters, the same people that probably use Google's service all day, are eager to see them fail. They missed the big story.

Go through the headlines and see if you can find that quote. Bloomberg summarized it.

It's called the Law Of Diminishing Returns. Google dominates the Internet advertising space with their search engine for the PC, or 800 million devices. They are the biggest fish in that pond. Google ran out of runway space.

Where do they go? They tackle the sea. There are over 2 billion devices waiting for an application that will deliver relevant search/information. Soon, there will be more Internet traffic over mobile devices than PCs. What happens when there is another type of "keyword" to resolve information and deliver ads to?

There have been numerous strategists that say the mobile search and mobile marketing industry will be much larger than PC search. I agree. The mobile can be utilized in ALL of the other forms advertising (TV, radio, print).

Google is getting their search window embedded on a number of new phones and have a good SMS (text message) service. I don't imagine it will be too long before they become the dominant player in mobile.

This is How Google makes a Googol

This really isn't a stumble, it's more like a pause. A pause to Phase 2.

Phase 2 is what ubiquitous computing is all about. Phase 2 is when every physical item in the world can, and will be, connected to the internet, and will deliver relevant information.

People are no longer stuck at their office, home pc, they are mobile, using their mobile devices for more than speaking. The combination of a portable microprocessor and trillions of objects having their own link to the net, this is Phase 2.

So yes, I agree, there are lots of opportunity for mobile.


Anonymous said...

More drive by "reporting".

Anonymous said...

PP, with regard to your comment:

" There have been numerous strategists that say the mobile search and mobile marketing industry will be much larger than PC search. I agree. The mobile can be utilized in ALL of the other forms advertising (TV, radio, print)."

What do you make of the fact that with their recent acquuisitions, NeoMedia now own close to a 50% market share of the Mobile Marketing sector?

Scott Shaffer said...

My comments will be forthcoming.

In the meantime, you might be interested in this

Anonymous said...

"50% market share"
Come on! Show me numbers before you make a statement like that.

Tomi T Ahonen said...

Dear Pondering Primate and readers:

Excellent blog. First, a bit of background. Yes there are about 800 million PC-type devices that access the internet today. But there are over 1 Billion users on the web. Already today, about 25% of all internet access globally is from a cellphone. Leading countries are Japan, China and Korea, where mobile phone users accessing the internet number over 150 million.

Secondly, obviously I totally agree with you. I was one of those early fanatics of the mobile internet, who wrote so in my second book, m-Profits back in 2002, devoting a whole chapter to this transition (fixed telephony to mobile telephony, and fixed internet to mobile internet) in what I called "Money Migration."

Search is already one of the top 10 uses of mobile phones, but yes, its tiny in users, traffic and revenues, compared to the mobile application giants, SMS text messaging, ringtones, mobile gaming, TV voting etc. But search is definitely destined to migrate to mobile real soon. 2.2 Billion cellphones vs 800 M PCs. Every cellphone user is accustomed to pay for mobile content, most internet users on the web expect free content. The phone is with us 24 hours a day, always on, always connected. The PC based web needs to be accessed, and connected.

If I was Google or Yahoo, my biggest internal project was to become a winner in mobile search. Its the battle they cannot afford to lose.

For my thoughts in this space and links to my books, visit my blogsite

Tomi Ahonen :-)
4-time bestselling author and consultant

Tomi T Ahonen said...
This comment has been removed by a blog administrator.
Anonymous said...

PP: Given the very long list of players in this emerging market that you've identified previously, I believe it's way too early to claim a (50%) percent market share as referenced (in NeoMedia's case) by another poster above. Going it alone now seems rather risky even at this early stage especially if Google, Yahoo and Microsoft pay (cellphone makers and/or carriers) to dominate the mobile window. When will you be posting your comments about NEOM's shopping spree? Do you think it likely that other "independents" might now clammer to join this "roll up" in progress? Should they? Or should they (which ones?) go it alone?

Scott Shaffer said...

My comments will come at the appropriate time.