Is Google Getting into the Cell Phone Business? - Wireless Roadblocks
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If Google is thinking of a wireless handset in the future that costs nothing to the consumer, one must ask how the wireless carriers who offer the handset would benefit from the deal. Obviously there would need to be some kind of revenue sharing arrangement between Google and the carriers. Wireless carriers are not exactly known for being generous or good at sharing.
Indeed, one company may already have rejected Google's overtures. At the very least, there appears to be some bad blood between Google and Verizon Wireless. The latter's CEO Lowell McAdam said that Google's insistence on getting a large share of search-based ad revenue led Verizon Wireless to avoid tightly integrating the search engine into their cell phones. "What this really boils down to is a battle for the mobile ad dollar," McAdam explained. "They want a disproportionate share of the revenue."
Does it make more sense, then, for Google to become its own carrier? When TV broadcasters switch from analog to digital early in 2009, a swatch of spectrum in the 700 MHz band will become available. Google has been very vocal about the rules it would like to see in place when this highly desirable band is auctioned off by the FCC. Google has even reportedly gone so far as to say that it will spend more than $4 billion in the auction if the FCC agreed to open applications, devices, services and networks. According to an article by PC Magazine, "That would basically require licensees to provide wholesale service, access to any desired devices and software applications, and interconnection with third parties."
The FCC only gave Google half of what it wanted, saying yes to open devices and open applications, while not obligating auction winners to let others buy access at wholesale prices in order to offer network services. This would seem to defeat Google's purpose.
Google is not likely to give up however. It's been a long slow climb, but mobile devices and mobile phones are getting better at offering the kind of functionality that we expect from our laptops and desktops. It would simply be too useful to too many people to be able to hunt up maps or addresses or other information on the go. How valuable would it be to a restaurant to turn up on a search right when someone is driving around looking for a place to eat? That's the money that Google hopes to capture; with that kind of untapped gold mine, the search engine giant isn't going to be discouraged by a few little roadblocks.
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