The Android operating system will be developed through the Open Handset Alliance, a multinational alliance of technology and mobile companies Google has put together, including T-Mobile, HTC, Qualcomm, Motorola, Samsung and Sprint Nextel. The platform "will enable anyone, Google included, to deliver advertising on a mobile device," said Ethan Beard, Google's director of new-business development.
Phones likely will not be available until sometime next year, the announcement said.
New ad models
For marketers, Android promises a number of new models for advertising on the mobile phone. The service will allow for a host of new applications, "some subscription-based, some working with carriers, some ... for download with the advertising [to offset consumer costs], and I'm sure there are many we have yet to think about," Mr. Beard said.
But Google only spoke broadly about monetization but the search giant didn't address tactics specific for how it would monetize or advertise on mobile phones. It stressed that the open handset alliance would encourage application development and innovation and that those developers could use a variety of models to monetize their applications, including advertising.
Consumers in many surveys have said they don't want ads on mobile phones, and they only budge from that position if some offsetting value is offered. A number of companies are experimenting with ad-supported services for mobile phones, among them Virgin Mobile, with its Sugar Mama program. A Sprint spokesman said it was "too early to say" what the Google software would mean for advertising on the mobile phone, or for Sprint's own mobile sales program, where it sells banners on ads running on ads on its mobile deck.
"If you look at what happened on the internet, it's not just one or two experiences that you have -- it's thousands or millions of fantastic experiences," he said. Once those experiences are created, "if we were to push out ads on this device, we would aim for a great user experience," Mr. Beard said.
Google executives emphasized in the announcement that Android is separate from the company's possible bid for wireless spectrum, as well as the numerous applications it offers on multiple phones and carriers, such as its maps icon on the Apple iPhone and e-mail services on other phones.
Analysts weren't exactly gaga over Google's announcement. Roger Entner, senior VP-communications, IAG Research, called it "a nonevent." The mobile sector is not like the internet, he said. "It needs so much customization, it's not funny." Even simple games for mobile phones need as many as 6,000 different versions.
Mr. Entner said the amazing thing about the announcement, which was kept secret until today after months of speculation, "was that 34 companies could keep their mouth shut for so long."
John Gauntt, an analyst with eMarketer, said Google's move into the mobile-phone business is a necessity, not an option. "Google cannot grow fast enough off the back of the PC-driven internet," he said. "It must extend search marketing to new interactive platforms, new markets and new advertisers who aren't currently online. The only current candidate with the scale to match Google's appetite is the mobile phone."
Some analysts predict Google will pick up as much as $4.8 billion annually in mobile-phone-related revenue within two to three years of the operating system's debut.