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Can Google make money from mobile?

Google is not earning revenue directly from its successful open-source Android operating system, and critics have questioned whether the search titan?s mobile strategy will pay significant dividends.

In addition to mobile search, other elements of its mobile strategy have begun to fall into place, including its recent acquisition of mobile social games developer Social Deck. In addition, the company introduced a new YouTube channel for Google Mobile, which will eventually be monetized via paid subscriptions a la Netflix.

?By now, some of you may have noticed our new Google Mobile YouTube channel, with a fresh look that includes a video box that rotates along multiple axes?we love the Rubik?s Cube here at Google,? said Heaven Kim, mobile product marketing manager at Google, Mountain View, CA, in a blog post.

?In our channel?s featured section, we highlight some of our mobile search capabilities?like search by voice, sight and location?that really help you take advantage of your phone?s unique technology,? she said. ?When looking at ?all apps,? you can not only check out any of our latest videos at a glance, but also quickly sort them by mobile platform or by app.

?We?ve also made it easier for you to share videos by email or through popular social networking sites.?

Consumers can visit to subscribe to the Google Mobile YouTube channel.

Google?s mobile strategy
There is no denying that Google has staked itself firmly in the business landscape across both PCs and mobile devices.

Whether it is mobile, search, social gaming, book publishing or flight information software, Google?s business secret is a solid marketing strategy.

It is no secret that mobile is a huge opportunity for Google.

Eric Schmidt has said over and over that the mobile advertising market will be bigger than the ?fixed? Web.

That is why Android is getting so much attention. And, that is why Google threw down $750 million for AdMob.

?In my book, chapter 5 talks about being where your audience is?Google?s audience is anyone using the Internet,? said Aaron Goldman, founder of Connectual and author of ?Everything I Know about Marketing I Learned from Google.?

?Every day, more and more people are accessing the Web from their mobile devices,? he said. ?Therefore, Google needs to be there.?

Android lets Google control the user-experience and make sure search is front and center so it can make money off search ads.

And, AdMob allows Google to cash in on display ads via mobile sites and applications.

The bottom line revenue impact for Android is primarily through search ads.

?By having direct access to mobile users, Google can make sure search is always baked into the experience,? Mr. Goldman said. ?And if Apple were to lock out AdMob or change the search default to Bing on the iPhone OS, Google wouldn?t be totally screwed.?

At some point, every business will have a mobile application, the way every business today has a Web site.

If Google can get the millions of mom-and-pop advertisers that buy search ads on the fixed Web to buy ads on the mobile Web, the long tail revenue will be huge.

The first step towards that is helping these businesses create mobile assets.

?Open-source is key and Google App Inventor is a great example of how to convert the mom and pops,? Mr. Goldman said.

Mobile search
Supporters and competitors alike have been wondering whether or not Google will be as successful monetizing mobile search as it has been monetizing search via PCs.

Mr. Goldman is convinced that mobile search will be a significant revenue-generator for Google.

?The key to PC search for Google is having a large enough pool of advertisers that it can show a relevant ad?or 10?for every possible query,? Mr. Goldman said. ?That makes it a good user-experience.

?If the ads aren?t relevant, people won?t click,? he said. ?Beyond just mobile Web search though, there are opportunities for Google to put relevant ads in SMS, voice and image search.

?These formats really take advantage of the unique features of mobile.?

Stiff competition
Looking at the competitive landscape, Facebook continues to add unique users at an impressive pace, and if handled correctly, its Places platform could lead to a lucrative location-based advertising business model (see story).

The two companies have mobile ad networks that compete directly with Google?s AdMob.

Yahoo and Microsoft have also formed a search alliance to compete with Google.

In addition, Microsoft continues to expand the reach of its Bing search engine across PCs and mobile devices (see story).

However, Google?s main competitor in the mobile space may be the company based nearby in Cupertino, CA.

?Apple is the one I?d be most concerned about if I were Google,? Mr. Goodman said. ?Sure, Microsoft is a player, and the Bing mobile search app is nice.

?But, just like with the fixed Web, Bing?s still playing catch-up and copycat,? he said.

Apple, on the other hand, is taking a totally different approach. So far it has shown no interest in launching a mobile search engine.

Rather, it has continued to release mobile devices that sell well. It has just announced the upcoming launch of Apple TV, a $99 direct-to-consumer streaming device.

And, of course, Apple runs the iAd network, which focuses on advertising within applications for the iPhone and iPod touch (see story).

?Now I?m not in love with iAd, but I do think that format has legs for brand advertisers,? Mr. Goodman said. ?What I am in love with is Siri, the ?virtual personal assistant? that Apple bought back in April.

?In chapter 21 of my book I talk about the potential for app-ssistants like Siri to supplant search,? he said. ?Rather than do a bunch of search queries to plan a trip or a date night, you can just send one instruction to your app-ssistant and get back a personalized itinerary based on your preferences.

?If I?m Google, the idea that someone might skip me completely in the process of performing this kind of commercial transaction would definitely be keeping me up at night?that said, I have no doubt Google will find a play in the world of app-ssistants and I explore a few different paths it may take in my book.?

Final Take
Dan Butcher, associate editor, Mobile Marketer