Back in 2005 when Google "quietly" acquired a small 22-month old startup called "Android," business writer Ben Elgin called wireless "the next frontier in search." With the recent hype over Google’s new "software stack" and the Open Handset Alliance, those words are proving prophetic as Google finally goes public with plans for its Android technology.
Senior Analyst and Editor
But not all was revealed in the unifying press release from Google. There were no less than thirty-four quotes from a Who’s-Who list of technology-industry players with a combined market cap that exceeds that of a G7 nation (oh, right-that’s just Google’s market cap).
Beyond all the hype of "…first truly open and comprehensive platform for mobile devices;" and "…fostering innovation on mobile devices" is the real issue of opening up cell phones to the lucrative text-based ad link market-or business as usual for Google. Google will make no less than $16B this year from traditional internet desktop searches, and the comparatively modest number of Apple iPhone-Smartphone viewers on the road.
The prospects for the ad-based mobile market you ask? Well, the Associated Press reported that Oppenheimer & Co. analyst Sandeep Aggarwal predicts Google will harvest as much as $4.8B in annual revenue from the mobile market two to three years after its software first appears in cell phones. They consequently raised the 12-month target for Google’s stock to $850, up from $745 on the news of Google opening yet another gold mine, this time in wireless territory.
Don’t get me wrong, Google is moving in the right direction. Some would say it’s high time the wireless industry enter the 21st century and abandon its protected "walled-garden" approach to tying devices, software and services to carriers and back-end revenue streams.
For all that was announced regarding Google’s plans for wireless, there was still much unsaid. For one thing, search can be enhanced in the mobile domain by the added dimension of location-as in proximity to specific products and services.
In fact, one of those thirty-four quotes found in the original Google press release came from GPS enabled location technology company SiRF Technology. Founder and VP of marketing Kanwar Chandha may have tipped the hand a bit with his quote: "With the emergence of geo search and navigation as key enablers, an open platform like Android can significantly accelerate the development and deployment of location-aware applications, content and services." Translation: look for proximity advertising to drive higher revenue, enable cool new applications and yes perhaps even make life a little easier by telling us where in the heck that new Sushi shop is located-and if the person you are to meet is really in the area.
But the idea isn’t new-in Japan. In July (Display Daily 7-10-07) we covered the emergence of proximity based advertising to cell phones with the headline: Mobile Phone Ad’s Find "In Proximity" Users (…at least in Japan). Here we covered the new "AdLocal" service using technology based on GPS powered 3G cell phones in Japan. Technology provider, Gen Mizayaki, president of Cirius Technologies Inc., said "…this will dramatically change the way on-line ads work." According to Mizayaki, the technology supports on-line ads over a 3G network in a 1 Km radius of the advertiser-but that’s not all.
Remarkably, Cirius gets paid by registered companies who set their own fee level that starts out at 25 yen ($0.20 minimum) per click. They developed a competitive bidding process that allows advertisers in a crowded market to bid up the per click price with incentives that include ad frequency and ad space on the cell phone display. The company claims 100M unique users for advertisers to reach as a potential customer base. That includes subscribers to Japanese cell phone service providers DoCoMo, Au, and Softbank. Juxtaposition this data with the type of cell phone user, perhaps income, and other relevant demographics known by the wireless provider, and we’re talking pin-point advertising accuracy-that’s "in proximity."
But "proximity advertising" is just the tip of the iceberg. The idea of open access to the plethora of data, (i.e. the info cell providers keep on their customers) and the creative ways social networking API’s are being developed (see Google’s new "Open Social" announcement) will broaden the scope of meaningful "proximity knowledge" available to us. (Imagine getting a ping when a friend or family member gets within 3 blocks of our proximity-i.e. Dodgeball mobile social software.) Suffice it to say, that perhaps the Oppenheimer number of $4.8B in new revenue for Google is a bit low-and for Google, that again would be business as usual.