Tag Archives: revenue share
Wireless Carriers Get Revenue Share From Google Search
Posted on 29. Mar, 2010 by Daniel Cawrey. 
0 Comments
There are an estimated 3 billion people who use cell phones worldwide. Google just wants a portion of them using their search engine.
Tricia Duryee of PaidContent is reporting that the major mobile phone carriers who have Android phones have a deal with Google to share revenue. Not just any revenue of course – but the kind that comes from search engine advertising. Not a shocker, then, when you see search being prominently featured on Android phones. And it isn’t just because Android was developed by Google, but because the carrier providing service for that phone has a stake in the mobile advertising market that Google is trying to enter.
To be sure, it is not that easy right now to make money in mobile advertising. But as the user experience for smartphones improves (a la Android) and the technology gets better, I’m sure the major carriers realize that advertising that is running through their “pipes” will someday prove to be uber-profitable.
Consider Google’s acquisition of mobile advertising firm AdMob for $750 million, which is still awaiting regulatory approval. The amount of money involved in the deal, and the technology that AdMob brings, is surely convincing to the mobile networks that this could be a massive money machine for everyone involved. While Google is the expert on search advertising, AdMob will bring its experience in web display and app display ads to the table, which could be later added to a partnership deal with carriers if it hasn’t been already.
It may already be part of it, since Duryee’s article also says that carriers get a piece of the Android Market revenue that is coming in, and that has to be growing.
And let’s not forget the fact that Google is trying to change the way we buy mobile phones. Instead of choosing a carrier and then deciding on a phone, they want us to pick out a phone and then choose a carrier. Hence the reasoning for a powerful Google phone like the Nexus One. Consider the options table when you go to purchase Google’s phone:
The same will soon be said for Chrome OS hardware, may that be a netbook or tablet. We will most likely lust after the best specs that Google knows we want and then choose where our connectivity for that device will come from. There will be a choice of carriers – much larger than this example above if they are interested in lucrative ad profits.
So is the Nexus One really a failure it has been said to be? Probably not. This is a trial run to see how Google can perform in the hardware market, and the fact that the carriers are making money from Google Search, and possibly other things in the future like Google Apps, will give them cause to keep quiet while Mountain View tries to change the dynamics of the wireless industry.
