Commentary

How Google Crowd-Sourced The World Before Launching A Mobile Phone

Alleged Google phone- Nexus one

Imagine crowd-sourcing the entire world before launching a product and not spending one penny for a marketing campaign. You could gain insight from reporters, analysts and consumers about the types of services that would and wouldn't work. The online audience segment you address could become your buyers.

You might even determine a fair market price for the product, or gain insight into the continent where the product should launch first. And if the product happened to be a mobile phone, you could even determine the best carrier to bundle services. Even if the phone doesn't exist now, Google has proven that the market is ripe for the company to jump on in.

And to think it all started with a blog post and a few Twitter tweets from Google employees.

Following Friday night's news leak that some employees had begun testing the phone, news surfaced that Google would try to sell the handset, dubbed Nexus One, several ways. But when the phone's $500 price tag surfaced, people expressed their discontent in blog posts, Twitter tweets and on posts in Facebook.

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Jonathan Yarmis, research fellow at Ovum, an analyst firm focused on the telecommunications market, says the question now becomes how to subsidize the $500 price -- how does Google divide the cost between itself, consumer and carrier?

There are a variety of ways -- from creating an advertising-supported model, to having consumers pay a higher proportion of the cost for the phone and allow them to pick the carrier. A service contract with a carrier, such as T-Mobile, becomes a third way.

The Android developer's network will contribute, too. "Not only will Google build a developer's network, they must," Yarmis says. "At the end of the day, the operating system has less to do with the success of a platform, and more to do with the killer applications supported by developers."

As Google attempts to grow the Android developers' network to support consumers and advertisers, it will run into rivals Apple, Microsoft, Research In Motion (RIM), Sony Ericsson, and Symbian.

But it's important to note that the programming models for the iPhone and Android are similar, Yarmis says. Programmers continue to look for a developers network similar to Apple's that gives them as much freedom as possible. Many developers have distaste for Apple. "They don't like Apple's heavy-handed approach to determine the appropriateness of an application, and they are really not happy that Apple takes 30% of the revenue from the application," he says.

Building a developers network for Android plays into Google's $750 million AdMob acquisition, which will become a crucial part of the company's bid to own search and display advertising on the mobile phone. Most of Google's business today is based on desktop advertising, but Yarmis believes "mobile advertising will become even more profitable than their desktop business." And that profit will come from adding location to search.

The move into mobile will allow Google to bring advertisers closer to consumers wherever they go in the world. If mobile becomes the next vista for advertising, Google strategists can darn well figure out how to own that space and bring advertisers value.

"The elephant in the room" remains privacy issues. I nod my head on the other end of the phone as Yarmis explains this factor: Even if someone knew all the searches you did, that data still wouldn't be as sensitive  as knowledge of your relationships and physical location, which are key hallmarks of the mobile platform. That information remains incredibly valuable to advertisers, who will likely pay for it.

Yarmis points me to an application for Windows Mobile called "Oops I'm Late!" that identifies a user's location based on the GPS, as well as appointments made through the calendar feature on the phone, to determine whether the user will make it to his appointment in time. If the system recognizes the user will be late,  it will send a notification to the person waiting.

When it comes to marketing, nothing short of genius, I say.

1 comment about "How Google Crowd-Sourced The World Before Launching A Mobile Phone".
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  1. Amin Haq from Media Flint, December 21, 2009 at 9:20 a.m.

    While there are many theories behind Google's entry in to the mobile hand set market, I struggle to find a good reason why they should be building mobile phones. Google is unbeatable in Search. But the iPhone is the Google of the mobile phone world.

    Yarmis claims that: "Many developers have distaste for Apple. "They don't like Apple's heavy-handed approach to determine the appropriateness of an application, and they are really not happy that Apple takes 30% of the revenue from the application." Well, isn't this exactly how advertiser's on Google's PPC platform feel about the company? Google's singular focus on the "User Experience" has PPC advertisers scrambling every time their Quality Scores dip and advertisement costs soar.

    Mobile advertising business appears to be a promising new opportunity. However, Duking it out with Apple, who reinvented cool, seems a really expensive and risky way to leap frog would be competitors in the mobile ad space.

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