Alphabet Inc (GOOG)

[SeriousMoney]

Google: Can You Hear Me Now?
Monday April 17, 12:56 pm ET
By Tom Taulli, Motley Fool

A few months ago, while in a noisy restaurant, I had lunch with a start-up company called V-Enable, which allows voice-enabled search on mobile devices. I said into a phone "Rolling Stones," and in less than a second, I got a list of relevant search results.

Yes, it's the next frontier in search: the mobile phone. In fact, last week, Google (Nasdaq: GOOG - News) got approval for a patent, No. 7027987, for the "voice interface for a search engine." The inventors include Alexander Franz, Brian Milch, and Google co-founder Sergey Brin. To be sure, this is not a dominant patent -- the sort that locks up the voice search market. Instead, there are many technological permutations offering some form of voice search; V-Enable has a variety of patents. As for the Google patent, it deals with improving the effectiveness of natural-language queries in the contents of search systems when using large databases -- one of the problems of voice search.

More importantly, though, the market for mobile search is expected to be huge: A recent Piper Jaffray research report forecasts that it will reach $11 billion by 2008. And to be sure, while Google dominates desktop search, the company has so far been defensive in mobile search, making moves of this sort even more important. In fact, I'm somewhat surprised at how slow Google has been on mobile, at least up to this point. To my observation, competitors such as Yahoo! seem to be more aggressive, such as with its latest deal with Helio, which is a joint venture with EarthLink.

An important problem Google will face as it seeks to monetize mobile search is the carriers themselves. They control the mobile footprint and are likely to extract a good amount of the revenue generated from mobile search.

In other words, the market is too big for Google to ignore, so expect the company to pounce on it. "We are confident all major Internet portal and search companies will launch voice-enabled search later this year or early next year," said Dipanshu Sharma, the founder and chief technology officer of V-Enable. "Our usage numbers show consumers prefer using voice-search over text-search on mobile handsets."

With top talent and billions in cash, expect Google to invest aggressively in the mobile search market -- and perhaps even buy a company or two to accelerate things.

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