We're seeing the Google invasion. As analysts put price targets on Google higher and higher, most recently $540 per share, this is eerily reminiscent of stocks during the Internet bubble. But mobile is a major reason for the inflated stock. In other words, mobile is getting Googled. Google is working aggressively to pervade the mobile world: its deal with Motorola last week; the one it made with RIM to put Google on BlackBerrys; patents it's filing on one-click dialing for advertisers; its strategic acquisitions; and its WiFi build-out plans. What's the underlying strategy here? Obviously to make money, and that will come from providing location-specific searches and advertising.
When it comes to Internet search, Google is king. Google makes almost all of its money from selling online advertising. When someone uses its search engine, Google displays ads based on the keywords or phrases used for the search. If the user then clicks on an ad, the advertiser pays Google based on an agreed-upon price per click. Google has a network of advertising customers that places ads on its Web sites and content partners' sites. Site traffic drives click-throughs, which drives revenue.
Google wants to provide the last component required to deliver a fully functioning mobile Internet solution--the mobile search engine. Carriers have historically played gatekeeper to the mobile Internet, keeping their customers within branded portals; but the trend is changing, with carriers moving away from a walled-garden approach. They are beginning to understand that a shift from being a full content provider to being a transport infrastructure that provides content will usher in the real mobile Internet. Google is ready capitalize, and analysts will continue to like that growth prospect.
FierceWireless will not publish Monday, January 16, in observance of Martin Luther King, Jr. Day. The markets are closed, and so are we. We'll return Tuesday, January 17. - Lynnette