Alphabet Inc (GOOG)

[SeriousMoney]

Google Poses Strong Competition to Mobile Operators and Mobile Search Providers, says visiongain
visiongain - May 10, 2006

Internet search giant Google is set to become a major player in the mobile search market, continuing its current strategy of partnerships with operators and manufacturers, according to a visiongain market research report. The analysts say that with the right VoIP and WiFi strategy, Google poses a growing threat to U.S. mobile operator voice revenues, such as by offering free wireless connections in major U.S. cities supported by location based advertising.

The recently announced dual bid with Earthlink to provide wireless coverage for San Francisco will prove a testing ground for Google to assess whether location based advertising over free wireless is a profitable business model. Google will provide a service with speeds of around 300Kbps for free with locally targeted advertising, an advancement of the company's current successful business strategy, whilst Earthlink will provide 1Mbps access for a monthly fee of $20. If successful, Google will be able to provide access to its free VoIP, email packages as well as internet browsing, amongst other services, to major US areas by 2008.

With sufficient potential to expand operations throughout the U.S. and into Europe, Google could become one of the first Wireless Virtual Network Operators, presenting a significant threat to the traditional voice business of cellular/mobile operators.

"The argument that Wi-Fi and cellular are complimentary rather than competitive depends on who is operating the service," comments report author Adam Walkden. "Google's successful advertising based business model allows the company to offer services for free. If it can convert this business model to include local based advertising to Wi-Fi users, it poses a significant threat to mobile operators.

"By providing free wireless networks, Google can attract new users whilst keeping existing users on Google for longer. Targeting wireless users with local adverts will aid future revenue growth," Warden continues.

Mobile search

The study also evaluates Google's aggressive pursuit of the mobile search market. The company has already partnered with Motorola, Sony Ericsson, BenQ-Siemens, T-Mobile and Vodafone to provide mobile internet search facilities. Google will continue to partner with operators and manufacturers whilst improving its own mobile offering. Many of Google's desktop-based services, such as email, calendar services and local services, are transferable to mobile and will be introduced to Google's mobile package through to 2008.

About the market research study

The 81-page visiongain report, "Google in mobile and wireless: Analysing the impact and assessing the threat of the search giant's market entry" (May 5, 2006) examines Google's current and future strategies in both mobile and wireless. It looks at Google's current activities, particularly in the mobile and wireless industries. The study analyses Google Mobile and the partnerships the company has forged with mobile industry operators and manufacturers for its mobile internet search. The report then analyses Google's future strategies in both mobile and wireless, observing the available options and the best approach for the company to transfer its dominance in desktop-based search to both industries.

http://www.tekrati.com/research/News.asp?id=6960