advertising

Prior to the Android announcement, a major building block of the gPhone rumour mill was the idea of a mobile service that was entirely ad-supported. The idea was that Google and whichever mobile carrier(s) agreed to the scheme would release a phone (whether there would be an initial hardware cost or not was not certain), for which the entire cost of the voice and data plan would be covered by ads running on the phone (text messages? pre-voicemail? pre-call!?).

The entire idea seems to have come from this Wall Street Journal article from Aug 2, 2007, and sepcifically this statement:

Google even envisions a phone service one day that is free of monthly subscription charges and supported entirely through ad revenue, people familiar with the matter say.

Subsequent to this article this sentence came to dominate the gPhone discussion. Talk of Google revolutionizing the industry became the norm. Adding gas to the flame was Google's interest in the 700mhz spectrum auction. Here it seemed Google was actively attempting to secure the infrastructure necessary to launch its own, perhaps ad-supported, mobile network. And hey, haven't they already bought up a bunch of the dark fiber in the continental US? Would they next attempt an overthrow of the government?

And then the announcement: Android.

No gPhone, just some prototype devices to run Google's new mobile OS. A number of the mobile carriers whose business model would be seriously debased by the advent of an ad-supported network turned out to be willing partners in Google's plans. Oh, and advertising barely rates a mention in any of the Google-sanctioned Android info released so far.

Any time Google picks its nose the net pundits fall all over themselves to figure out how the search giant is going to realize some ad revenue from the act. This is not entirely unreasonable - ads represent the vast majority of Google's revenue, and as a publicly-traded company they are beholden to shareholders. But Google have been responsible for a number of initiatives and purchases that don't seem primarily motivated by the desire to increase ad revenue. Writely? Open Social? Calendar? Sure, the opportunity for some ad revenue is there, but often Google seems motivated by something else.

Jason Calacanis, on the most recent This Week in Tech podcast (Nov. 11, 2007) indicated that he felt Larry and Sergey were not so much interested in money as they were interested in innovation, the changing tech landscape, and just building cool stuff; I think this informs much of Google's actions. These guys just want to put the Google stamp on the world. If they can have a hand in deciding the future of the internet and technlogy, the revenue will find them.

And by doing things like Open Social and Android, by setting standards and working towards practical, open solutions, Google is helping to guarantee that it remains a relevant player without being evil. By remaining relevant, Google is helping to ensure that it will be in a position to take advantage of the next revenue stream that comes along.

And the ad-supported phone? Maybe at some point in the future we'll see it. There are certainly opportunities for ad revenue to be had here - paid listings on WhatsOpen, anyone?

Valleywag has revealed what a source tells it is the first Android app. Or, at least, Valleywag has revealed what its source tells it is an app created by the company that has also written the first Android app. Got that?

The company is WhatsOpen.com, and apparently they have a secret little bit of software that shows nearby stores and their operating hours. Apparently this bit of software has, umm, been ported to Android. Or WhatsOpen.com has written software for Android that does kinda the same thing. Or something. The article's kinda vague, but, hey they have screenshots!

This is pretty much exactly what Leo Laporte has been saying all along (as well as a few others). The real power of Google in the mobile space is in localized advertising. Mash up GPS, Google Maps, and advertising and pretty soon your phone is telling you that there's a good burritto to be had in a little Mexican place just around the corner from where you're currently standing.

CNN Money has an interesting story about monetization, advertising, 3rd party app distribution, etc.

Note the observation in the second-to-last paragraph, about openness to 3rd party developers diluting the app landscape with a lot of junk; we definitely see this problem with Windows mobile apps. This is the other side of openness, and something Apple has been trying to avoid with the iPhone.