Consider the moves Google has made in quick succession:
- It dropped Tele Atlas, the company powering Google Maps' "turn-by-turn" navigation in favor of Google's own system, which it is offering free on the Android phone.
- It introduced Google Favorite Places, an application based on quick-response (QR) codes that lets people photograph window stickers in local shops or restaurants to get instant reviews and discount coupons.
- It is launching its own mobile handset, the Nexus One, today.
Independently, each of these moves has huge potential impact. Free turn-by-turn directions on your phone makes it silly, for example, to buy a separate GPS system for your car -- no wonder Google's free navigation announcement drove down the stock prices of Garmin and Tom Tom 16% and 21%, respectively. Google is driving the profit out of the map market because it sees maps as part of something much bigger.
If it remains exclusive and expands consistently, the Google Favorite Places application, which currently lists 100,000 local businesses, could deal a crushing blow to a nascent competitor such as Bing. It could usher in the kind of competitive superiority we saw in the days when Visa outflanked American Express by emphasizing that you had better bring your Visa card because "They don't take American Express." If scanning a code to Google can save you $10 on your dinner while searching on Bing cannot, it's a pretty easy choice regarding your default search engine.
Google's new mobile phone would give Google more control of its users' handset experience. Further, it is a potential end-run around control of handset sales by big mobile carriers. According to a recent article on this site, it could help Google realize an open mobile ecosystem that would be a "viable alternative to how consumers buy their handsets in the U.S."
Looked at together, these three developments are part of a single, comprehensive, integrated vision. This is not just a play by Google to position itself to take advantage of mobile. It is an audacious plan to define the benefits of mobility for consumers, in general, and to completely dominate the space that they help consumers create.
Google is creating a network of integrated mobile functions that will be centrally controlled and integrated to a degree that will make the revolutionary, symbiotic iPhone/iTunes product seem quaint in comparison. The beauty of iPod/iTunes is that they depend on each other and they support the other's benefits. Once a consumer commits to them, the iPod and iTunes are impossible to unbundle. They can be replaced by other products, but not efficiently.
Now imagine this (it's not hard): Google is your go-to source for almost all of your interdependent needs when you are out and about, not just mobile phone needs, but "mobility" needs. It's the device you use, the search engine that helps you find things, the map that tells you how to get there and the coupon you use to get a discount at a preferred restaurant or local shop, all in one seamless experience.
While other companies are trying to own key aspects of mobile telephony to take advantage of the next big growth spurt, Google is trying to dominate the whole thing by helping consumers re-imagine what being mobile is all about, and by offering a web of interdependent products with outstanding combined benefits. Oh, and most of them are free.
Recently, the blog abovethecrowd.com described Google's strategy as true disruption: "[It] change[s] the rules of the game in such a way that the incumbent would need to abandon or destroy its core business in order to lay chase to your strategy." Google is using that strategy effectively against a number of established business models simultaneously.
A key aspect of that disruption is what has been termed the "less than free" business model. Less than free means, for example, that Google is willing to give handset manufacturers ad splits for using the Android Smartphone OS. In effect, they are paying them to use it.
Is it too far fetched to think that someday Google will become its own telecommunications carrier, providing internet connectivity and mobile connectivity for, you guessed it, free?
The good news for our industry is that the money fueling Google's vision comes from a familiar place: good old advertising. Advertising is the only model since the industrial revolution that has consistently created communications, lifestyle and entertainment benefits for consumers for free.
As we go into the next decade, advertising is alive and well. Google is betting its future on it.
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