While Sprint and Google are getting more cozy with each other, it doesn't appear that Verizon Wireless and Google are going to be the best of friends anytime soon. Last week Verizon essentially snubbed Google's Android operating system, announcing that Linux would be its preferred OS going forward. It's also committing to the LiMO Foundation. The carrier said it will still support Android devices if they are "interesting to Verizon customers." For some reason I think Verizon might make the judgment call that Android won't be interesting to Verizon customers.
Ever since discussion of the 700 MHz auction began, Verizon and Google haven't had much love for each other. Google pushed for open access, while Verizon Wireless resisted until it ultimately embraced the concept--but not before a war of words exchanged between the two. More recently, Google filed a petition with the FCC, insisting that the regulator put in place stricter terms for Verizon's C-block 700 MHz open access provisions. Verizon shot back on its policy blog: "It's really no surprise that despite not winning spectrum, [Google] continue[s] to try to change the rules and further their own business interests through the regulatory process." The carrier said it knew the rules before it took part in the auction and "of course" they will abide by them, but if it doesn't the carrier points out that "Google or anybody else..." can use "legitimate and expedited ways to address that."
Meanwhile, Sprint and Google as well as Clearwire, which will be the lone WiMAX nationwide player incorporating Sprint's assets, have cuddled up with Google. Earlier this month, Sprint announced it planned to launch a plethora of Google's services such as Google Maps for mobile and YouTube on its portal. Sprint also proposed to make the GPS-enabled Google search its preferred search partner. Clearwire, which is getting an investment from Google, will also use Google search as the default search partner and of course will adopt the Android platform.
It's interesting because Google has been pushing for open access so that it and everyone else can have free reign to offer their services and applications on carriers' networks. Yet, the search giant knows it still has to closely align itself with operators to make sure it gets the optimal traffic. And that will be the case going forward for many Internet companies, including Yahoo!, despite this new open regime that is coming to a wireless network near you.
At this point, it doesn't appear that an operator aligning itself closely with a particular partner like Google or Yahoo makes much difference in the market. For instance, Current Analysis analyst Deepa Karthikeyan is taking just a slightly positive stance on Sprint's announcement to launch the plethora of Google applications on its deck. Although Google brings a strong brand name to Sprint's portal, "they are not earth shattering, because most of these services are available on the decks of other carriers as well. Google's mobile search and map services are supported by most carriers and handsets making them ubiquitous, and stripping Sprint of exclusivity," Karthikeyan said. With Google and other Internet giants wanting to get on as many carrier decks as possible, it appears that those exclusive content and service days are gone.
Of course there is merit to aligning oneself with a Google. As Karthikeyan points out, mobile search and mobile search advertising is growing in popularity, and the trend is moving toward operators partnering with a preferred partner to create an easy one-click use experience that translates into an increase in data ARPU and of course a replication of the successful search business Google has created in the fixed Internet world. Yahoo! is becoming a strong contender here with its oneSearch 2.0 platform revealed at CTIA last month. As such, one can bet that Google and Yahoo! are doing their best to cozy up to the world's major operators.
That means operators once again hold the upper hand, even when the network trend is toward open access because it's a lot easier and more profitable to partner with operators than to create a separate device, service and marketing program to run on an open pipe. Verizon is certainly not shunning Google off its deck, and with its new open-access policy, Google will be there. But how prominent will it be? Maybe Google should stop attacking Verizon on the open-access front (it got what it wanted) and start wining and dining the operator because that will be the name of the game going forward. --Lynnette