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Why Google Acquired NFC Tech Company Zetawire

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Here we go again. Little known Toronto-based Zetawire got scooped up by Google in August, according to The 451 Group Analyst Ben Kolada. The Canadian startup designs near field communications (NFC) technology.

While it's a small deal, don't think of this one as another day, another acquisition-at least for Google. It's not a technology that Google acquired to hide in the background, only to dissolve or make disappear one year later.

NFC enhances Google's reach significantly into areas such as acquisition related advertising, deals and promotions and it would have pretty much the same market multiplier effect that existing Android versions have done, according to Vishal Jain, an analyst at The 451 Group.

Jain, who tracks mobile payments and advertising, says the Zetawire acquisition is more about the software architecture to run a complete NFC-based ecosystem. "So, Google got the NFC software in OS from NXP and chips from Samsung-NXP, but lacked the business layer that could integrate all its functional modules," he says. "Zetawire helps solve that a bit."

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Google inked a deal with NXP Semiconductors earlier this month, revealing it would build the company's NFC technology into the Nexus S smartphone.

Similar to Jain, my technology experience comes from the electronics industry, semiconductors, radio waves and the backbone of the Internet, and I can guarantee this innovation isn't going away anytime soon. In fact, Google will spur it to new heights. It launched its first NFC marketing service earlier this month.

Marketers and advertisers, welcome to the new world of cross-channel attribution modeling that will send consumers from brick-and-mortar to online to mobile to television to print to radio. And if for some reason you can't see it coming, check out this Forrester Research report released Monday.

It appears that Google will build NFC into the "Recommended on Google" window stickers available to businesses listed in Google Places. So, businesses placing the NFC-enabled phone within a few inches, information will be streamed to your phone. NFC will connect the Web, searches, paid search ads and the brick and mortar store. Get it now?

The possibilities for advertisers and marketers may seem grandiose, but for those in the tech industry it's a long time coming. Most of the hype has been around making electronic wallets a reality. SEO by the Sea founder Bill Slawski uncovered a Zetwire patent filing focused on a secured electronic transaction system. It describes a payment system, an advertising system, and an identity management system as well as their associated methods. And while everyone seems stuck on the payment system, really folks, hire an engineer and start thinking about the possibilities related to advertising marketing.

The number of mobile payment users worldwide will exceed 108.6 million in 2010, up 54.5% from 2009, when there were 70.2 million users, according to Gartner. The research firm suggests mobile payment users will represent 2.1% of all mobile users in 2010.

Guess it depends on who you ask. Companies and Markets has released a report in November predicting the global market for mobile payments will reach $264.8 billion by the year 2015, with the Asia-Pacific region leading the way.

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