Commentary

Google Mobile 'Industry Trends Blowing' In Company's Favor

htc

"Mobile before PC" is a mantra Google Chief Executive Officer Eric Schmidt has been chanting for the past year since acknowledging mobile handsets and devices would soon outpace the sale of desktops and laptops. Not only are the phones a more personal tool, but as handset makers like HTC discover how to make the screen larger on a pocket-size gadget, the handheld device will provide the perfect platform to connect with apps in the clouds.

There are more than 60,000 devices running Google's Android mobile operating system shipped daily. In Barcelona, Spain, last month, Schmidt emphasized the company's cultural shift from a PC-to-mobile mentality supporting what he expects will become an advertising boom on handheld devices.

Enterprise mobile data revenue should reach $43 billion by 2014, according to ABI Research. Global revenue from mobile data access services for handsets and computing devices will not lag far behind. The research company expects mobile data access revenue will exceed mobile messaging revenue by as much as 55%.

advertisement

advertisement

The simplest measure of momentum in Mobile is search traffic. Google has seen mobile search traffic rise by five times in the past two years, which has not cannibalized computer-based search. During an average work day, mobile searches rise as desktop searches decline as people go out to lunch, Google Vice President of Engineering Vic Gundotra told investors and analysts during a Webcast Monday. About 25% of Android and iPhone users who download applications spend up to two hours a day using those applications, he says, adding that a huge opportunity exists for advertisers to reach them.

Prior to the arrival of smartphones, cost per clicks (CPCs) for ads came in dramatically lower. With smartphones, CPCs have risen dramatically and location should improve, even exceed, those produced on desktops in the future, Gundotra says.

It's not just Google search or advertising on mobile. The opportunity also resides in applications on mobile devices. Gundotra also says Google Mobile Maps has more than 50 million active users. This one example, along with others in the Google Apps Marketplace launched last week, provides the company push to support cloud computing for mobile devices, an idea that some analysts have pooh-poohed me for in the past.

The Google App Store has surpassed 3 billion downloads, the average Android user downloads 40 applications, and 25% of iPhone and Android users spend two hours per day inside of those applications, according to Gundotra. He adds that Google collects hundred of millions of data points with the user's consent every day.

Google has invested a half decade in location-based technologies. "Industry trends are blowing in Google's favor," Gundotra says. "The Internet we have long awaited for has arrived on mobile."

If I didn't make myself clear in the past, allow me to try again. Google wants to own cloud computing on mobile devices. "What Google Apps Marketplace Means to Cloud Computing" should give you insight into Google's strategy. You can find confirmation in the section of the Webcast on Google's mobile business that explains cloud computing. That's where Gundotra explains how applications won't live on the PC or mobile phone, but rather in the clouds where processing power becomes much more powerful. Sometimes the processing power consists of more than one server, which isn't possible today with the processing power on a standalone device.

As for Google, the Mountain View, Calif., search engine not only wants to own mobile cloud computing, but advertising too. But fragmentation across devices, carriers and contrives has been a killer for advertising on mobile. As a marketer, you know the headaches facing the adoption of advertising on mobile devices. And as handset makers release more devices, mobile advertising becomes more complex. Google's answer: AdWords.

The Webcast provides an overview of the company's view of mobile computing trends, demonstrations of cloud-connected mobile application and services, as well as an update on its advertising business. As Broadpoint.AmTech Analyst Ben Schachter points out in a research note, the session, though somewhat light on new specifics, not only emphasizes Google's push into mobile, but also supports Eric Schmidt's comment at a conference last week in Abu Dhabi that the company's smartest engineers are all focused on mobile.

Schachter writes that key drivers of developer adoption include a critical mass of installed Android handsets, ongoing outreach initiatives, support for Flash, and lack of a cumbersome application approval processes.

Next story loading loading..