Exaggerating The Mobile Threat To Google

from the sorry,-don't-see-it dept

Wed, Apr 30th 2008 6:21am — Mike Masnick

There's a Business Week article making the rounds saying that it's not Microsoft or Yahoo that's a real threat to Google, but the rise of the mobile web, which will somehow shrink ad inventory and cause headaches for Google. It's a nice theory, but it's hard to square with reality. Increasing use of the mobile screen is hardly likely to decrease usage of a full computer screen. If anything, it will likely make desktop computing more useful in some cases. The article also makes a few other questionable statements. First, it points out that the mobile screen is smaller, so there's less ad inventory, and then it points out that the growing acceptance of the mobile web is due to the web browser on the iPhone. That sounds good, but the points contradict each other. The success of the iPhone's browser is due to the fact that it presents a full (not limited) web browsing experience -- so it doesn't really limit the inventory available to Google. Furthermore, even if the inventory was limited (which seems unlikely) that's not necessarily a bad thing for Google. Google's success has been based on making ads more relevant -- not just more available. This was what resulted in so much confusion during Google's recent earnings announcement. Google had made some changes to drive more relevant clickthroughs -- and while that may lower actual clickthroughs, it increases revenue. So, even if inventory is limited, if Google is still the best at making ads relevant, it will do just fine.

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Filed Under: ads, mobile, real estate, search
Companies: apple, google

11 Comments

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Pete Valle, 30 Apr 2008 @ 7:18am

Mobile web to actually go down.
With the advent of gadgets like the iPhones and imitators to come, as well as the ever increasing connection speeds offered by mobile carriers, won't the so called "mobile web" eventually disappear? As more devices are capable of browsing the full web, the need for a "mobile web" will consistently diminish.
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Paul, 30 Apr 2008 @ 7:24am

Seriously
I mean, do they think people are going to use their mobile devices in their own homes instead of the desktop? If the desktop is available, its virtually always going to be chosen over a mobile device which gives a severely limited experience in comparison.
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Iron Chef, 30 Apr 2008 @ 7:51am

There are going to be applications that can't be ported from the desktop to a mobile screen. Technology is going to be a sticking point too. Todays wireless networks just weren't built with even 20% customer data adoption in mind. Apple is certainly a standout and shown that there is a need in the marketplace, but mobile data was not a priority. Latency is also going to be an issue, maybe preventing online game adoption.

But when it comes to ads, I've seen some trials, but they fall short, usually because they fail to take into consideration the reality:

When you're on the go, are you really going to "click here" to find out about the 10% discount? Probaly not. You goal is usually to get some sort of map or news article quickly.

I see the two complementing, not replacing each other, at least for the next few years until 4G networks (LTE) come forward.
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Matt, 30 Apr 2008 @ 7:52am

Re: Seriously
people do indeed use mobile devices in their home but only if it offers a full experience (surprise surprise). I can't stand that a ton of phones are unable to support even close to a full experience due to the companies not only avoiding wireless capability and intentionally locking down the browser. Someday soon this will change, I hope.
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Josef, 30 Apr 2008 @ 8:46am

A thanks is due to Apple, not for the innovation or even technical capacity of the iPhone, but rather the use of international clout to market the gadget.
Devices like the iPhone make the public aware of new technological potential and access in addition to raising the bar for device manufacturers courting an increasingly tech-savvy demographic.
As far as this reader's concerned, the web's future is total mobility, making phone-based net access not just some passing fad with lower capacity.
Desktop sales are falling, laptops see increasingly better performance and longevity; we're moving toward a mobile web all the time.
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Paul, 30 Apr 2008 @ 8:58am

Re:
I think people are confusing laptops with the mobile web. A laptop does *not* access the 'mobile' web. It accesses the full-fledged web. We're talking cell phones here. Websites created *specifically* for mobile phones and significantly smaller screens.
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Hua Fang, 30 Apr 2008 @ 9:15am

Still an issue of connectivity
I think it's still an issue of connectivity, which has no direct logical connection to the issue of threat in the business sense. To be exact, this time, it is a matter of " Availability of any contents at anywhere at anytime" through "Any kind of connectivity". To get a message, if you can not see the "wolf-flame-smoke" from the rally station on the Great-Walls, send me wirelessly instead.

A codonologist.
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Anonymous Coward, 30 Apr 2008 @ 9:36am

Re: Mobile web to actually go down.
I hope so. It's absolutely infuriating when I go to certain websites on my iPod Touch and it automatically gives me the crappy mobile version of the site, which makes most of the site's content inaccessible. Apparently it autodetects the browser version as being on a mobile device, and refuses to give me the full version of the site, even though the device is capable of displaying it. Discovery.com is one such site. I wanted to browse their selection of DVDs for sale, and I couldn't get any access to the main site with my iPod no matter what I did. These sites should know that these devices are capable of displaying the whole site, with the exception of Flash. If anything, create a non-flash version of the site to route these devices to.
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Thane, 30 Apr 2008 @ 10:22am

Re: Seriously
Not in my experience. We bought an ipod touch and now my wife almost never uses her computer for internet access - preferring the email etc on the touch. We have wifi in the house so she can access it whenever and whereever she pleases. She still uses the desktop but for tasks like quicken, excel and word. For the internet and the web - it's the ipod all the way.
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Derek Kerton (profile), 30 Apr 2008 @ 10:53am

Location, Actionability, Relevance
Mobile ads, or ads served on a mobile device like a phone, will actually often pay MORE per click than ads served to a PC.

While a PC ad is more likely to get you to casually browse to it, a mobile ad is more likely to get immediate action. When mobile, you could actually stop in at a McDs to get a shake: it's immediately actionable.

Moreover, Location awareness can make the ads far more relevant. Imagine if the ads you saw on your mobile device came mostly from retailers and businesses that were within a couple of KM from your current location. Those ads would get better sell-through rates, and thus would pay more per click. That's good for the Goog.

If you think of the Google as a search provider, as some do, then you can imagine how relevant and actionable an ad placed on a mobile device can be. Consider a user who searches for Pizza on the mobile phone. Consider that an ad sold to the results page could say: "Gino's Pizza: 1.3 miles East, and $2 off. Click here for more." 'More' in that context would mean the ability to call, order online, see a map, or get turn-by-turn directions. That scenario is non-intrusive, relevant, location aware, just-in-time, and drives revenue for Gino. Do you think Google (or Yahoo, whatever) could sell such an ad system?

Mobile is new real estate for the advertisers. They will make more money because of it, not less.
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dave, 30 Apr 2008 @ 9:16pm

it's because...
the iPhone doesn't have flash. It limit's Googles inventory of ads because it can't display all those Flash ads...
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