Saturday, July 21, 2007

doubt: google's mobile push (round 1)

No one debates that ads are good business. As a user of numerous free Google services funded (no doubt) by ad revenue, I'm hardly in a position to call foul on ads.

That Google can develop a suite of powerful mobile applications is not in doubt.

That Google wants to make those applications available to mobile phone consumers is also not in doubt.

That Google expects to generate ad revenue from serving ads to those individuals is most certainly not in doubt.

But what I doubt is the willingness of individuals to put up with ads on their mobile phones.

In today's New York Times article "Google Pushes for Rules to Aid Wireless Plans", Miguel Helft and Stephen Labaton report that

Google believes that the cost of voice calls and data connections to the Internet may be partly subsidized by advertisements brought to users by Google’s powerful online advertising machine.

Even pea-brained me can see where Google is going with this idea, and I'm not entirely sure pea-brained me likes it.

Let's say Google can buy spectrum and offers free or near-free access to users who buy their phones off the shelf. The cost of mobile to the rest of us who don't want to stare at ads before we hit the SEND button is going to skyrocket. After all, who pays for the cell towers, the call centers, the rest of the infrastructure that keeps our mobile communications network working? The mobile companies are going to have to make up for all of those users they're losing.

Or am I willing to spend $500 on a phone because I don't get a subsidy from the phone company?

Or am I willing to put up with the quality hassles that come from n-number of phone companies trying to make sure their services work with m-number of handsets when they have no idea which handsets their consumers want to use?

Or am I willing to put up with the fun that happen when all that "free software" Google wants to load on my phone - for free - fails to play together nicely? It is "free" after all. You pays your money, you takes your chances. It's one thing if your GMail email doesn't go through, or if your Blogger account suddenly goes dark. It's entirely another if you can't count on your mobile phone.

What I'm reading here is that Google wants a seat at the mobile table, and is complaining that the big carriers are keeping them out. Google is going to have a massive fight on its hands trying to find a way to make me look at AdWords on my mobile phone, to convince the carriers that this idea is good for them, and to convince the government that forcing carriers to wholesale part of their spectrum won't result in chaos.



Jeff said...

Maybe it's just me, but I see unlimited wireless access (voice and data) not too far away.

There was a time when you used to have to pay for each local call you made -- now you pay a monthly fee and call all you want.

There was a time when you used to have to pay for each minute/hour of internet access you used -- now you pay a monthly fee and browse all you want.

Is there any reason mobile use isn't going this way? All the major carriers already offer unlimited data plans as add-ons, as well as unlimited off-peak calling. It's only a matter of time I think before you will be able to pay a flat fee for all you can use.

In that case, advertising subsidies are irrelevant. They're basically irrelevant now with Internet use -- sure, a few ISPs and browsers have free add-supported versions, but most of the US (and I think the world) is on the all-you-can-drink model. The question is not whether we'll get there with mobile, but when.

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bob said...

Hi Jeff,

My doubt wasn't that the price of cell phone service would go down or even standardize around a flat-fee model.

What I doubted was that the FCC would go for Google's 'demands' (which it seems to have rejected), that consumers would accept ads on their phones (they won't), and that an essentially 'free' or 'near-free' model subsidized by ads would work for any number of reasons.

I agree with you that any commodity market will, through competitive pressures, experience both pricing and price model pressures.

But I still think consumers will have to pay something for their unlimited plan. If Google (or Apple) want to become carriers, let them bid on spectrum and compete with the rest of the market.