Battle of the Business Models: The Mobile Front
September 26, 2008
Fresh from the victories in online advertising and Web search, Google is using its auction business model to disrupt the mobile telephony sector. Now patent documents are not products. Compared to IBM or Intel, Google does not run a high output patent factory. Furthermore, some of Google’s several hundred patent documents are interesting but not particularly substantive; for example, the cooling gizmos for Google’s servers.
On September 25, 2008, the USPTO published US20080232574, “Flexible Communication System and Methods.” The abstract for the invention, filed in March 2007, states:
A method of initiating a telecommunication session for a communication device include submitting to one or more telecommunication carriers a proposal for a telecommunication session, receiving from at least one of the one or more of telecommunication carriers a bid to carry the telecommunications session, and automatically selecting one of the telecommunications carriers from the carriers submitting a bid, and initiating the telecommunication session through the selected telecommunication carrier.
In a nutshell, Google has applied its auction methods to mobile telephony. Carriers bid to handle your call. You can read Wired Magazine’s discussion of this invention here. Let me offer several observations:
- The notion of a battle of business models, for me, is quite important. Telcos may find themselves innovating within a closed room. Google innovates outside those boundaries. Those in the room may find themselves conceptually unable to break of their confines. Could this trigger a replay of what’s happening in newspaper advertising?
- The computational infrastructure required to handle mobile call auctions is going to get a work out. Based on my research, no telco has a Google-killing infrastructure in place and on line. Will one or more telcos have the cash to match Google’s ability to compute at scale.
- In my briefings to selected telcos earlier this year, I recall the easy dismissal of Google’s telco dreams. I wonder if those executives are rethinking their earlier position?
With online advertising and Web search in the bag, Google is moving into another business sector with more to come.
Stephen Arnold, September 26, 2008
Googlezon: Tan, Ready, Rested
September 24, 2008
The avalanche of articles, commentary, and backlink bottom feeding kept me from commenting about the Google G1 mobile device. I am not that excited about a gizmo. What I am thinking about are the stories about the Google / TMobile G1 preloaded with a hook to the Amazon MP3 store. You can read about this feature here. A hook up between Amazon and Google, no matter how trivial, is interesting. For companies like Apple or eBay, the connection is more than a curiosity or a convenience for a 20 something who can’t drink coffee without a personal sound track echoing through their actions. Here’s why in my opinion this tiny deal merits scrutiny:
- Google has no footprint in music. Amazon has been eager to replace the lost revenue of traditional CD sales. Now the two also rans in the online music business seem to be taking a tiny step to address this issue. Will it work? I’m not sure, but it’s an interesting move.
- Google has sat on its haunches and watched Amazon–a company headed by the world’s smartest man–out Google Google in cloud computing. Maybe this deal is a tacit admission that the GOOG’s math and physics majors need Amazon’s market savvy. Amazon certainly could benefit from some of Google’s engineering expertise.
- Amazon could become the equivalent of a Roman siege tower in an escalating battle with Apple. Apple has outgunned both Google and Amazon in online music retailing. Google has an enternal beta in its now repositioned Froogle service, its junk filled Google Base, and its lawsuit attracting YouTube.com service. Amazon might find a way to tap into Google’s ad goodness. Apple lacks this tap dancing move.
In this tussle among Amazon, Apple, Google, an Microsoft–sorry, Yahoo, you are not in the game–a relationship between Amazon and Google might undermine Microsoft’s subtle, often behind the scenes cheerleading for Amazon. Apple might find itself in more direct competition with the GOOG. Consumers may see more disruption on the online retail market in certain sectors.
A real or virtual Google – Amazon deal would raise again the notion of Googlezon. I think this is something I will enjoy pondering. Agree? Disagree?
Stephen Arnold, September 24, 2008
AT&T: Ma Bell’s Giving the Internet Another Go
September 18, 2008
I need a scorecard to keep track of the “new” Ma Bell’s Internet initiatives. Disclosure: I worked on AT&T projects when I worked at Booz, Allen & Hamilton. I was a vendor to Bell Laboratories and several units of the pre-break up AT&T. I worked on a programming job at Bell Communications Research, and I was involved in the USWest Yellow Pages Project. I even have a couple of pals who are former Bell Labs’s wizards. Therefore, when I say, I’m confused it’s almost like hearing this from a real Bell head.
The story “AT&T to Link iPhone to U-Verse Video, Internet”. You can read it here. The hook for the story is AT&T’s effort to extend its reach into the Google-verse. Oh, sorry, I meant “Internet world.” I don’t want to go through the history of AT&T’s different efforts in different incarnations in the Internet. Some of them are truly amazing. The split between the “real” AT&T and the separate “hosting” outfit in year 2000 and 2001 were inspired. Then there was the buy out of IBM’s Internet service that became AT&T’s dial up Internet service. Then there was a deal with Yahoo for DSL which was pretty darned amusing. I could go on but won’t.
Now the “new” AT&T is creating a U-Verse to get a piece of the video action. Never mind that AT&T has changed directions more times that my mother when she was fiddling with which figurine went on which shelf. The notion that AT&T is going to glue together its new mobile search service (I think the partner is Yahoo now), the independent Steve Jobs (the dominant force in digital audio and video for money), and an AT&T designed high speed Internet services.
Right.
The traditional telcos can win in the US because the companies can bill people. Elsewhere, life is not so good. Furthermore, Google is a crafty beast, and it has already reached a truce of sorts with Verizon. (Chortle, ha, ha). Here’s what will happen:
- The new service will appear and AT&T mobile customers will get a deal–for a short time. Then the fees hit.
- The partners–Apple and Yahoo–may grumble. AT&T will try to put these outfits in a thumb screw and legal eagles will flap.
- Digital video will remain volatile, a money sink, and contentious.
- AT&T will reload and try again.
If you see another outcome, educate me. Just wear your Young Pioneers’ ball cap and t shirt. If you don’t know what these are, don’t bother writing me. You are uninformed about the way Ma Bell operates.
Stephen Arnold, September 18, 2008
Google: With Maturity Cometh Fear
September 15, 2008
CIOL News reported on September 13, 2008, “Google Mobile Chief Says Can’t Afford a Dud.” You can read the story by Yinka Adegoke and Eric Auchard here. The peg for the write up is that a Googler (Andy Rubin, director of mobile platforms) told folks that Android had to be a success. Not long ago, Google would roll out a beta and walk away carefree. Now, it seems, the company recognizes that a foul up with Android might chip one of Googlzilla’s fangs. CIOL News does a good job of summarizing the promise, the disappointments, and the status of Android. For me, the most important statement in the article was this passage:
Google plans its own software store, called Android Market. “It’s not necessarily the operating system software that is the unifying factor, it is the marketplace,” Rubin said. Unlike Apple, Google does not expect to generate revenue by selling applications or to share revenue with partners. “We made a strategic decision not to revenue share with the developers. We will basically pass through any revenue to the carrier or the developer,” said Rubin.
I found this interesting, but a trifle off center with some of the research I have done for my two Google studies here. Let me highlight three thoughts and invite you to purchase a copy of my studies to get more detail.
First, Google’s telephony related inventions span a wide range of technologies. While the marketplace is important, the investment Google has made in its telco inventions suggests that the marketplace may be the current focus, not the only focus, particularly over a span of years.
Two, Google, like Microsoft, is behind the eight ball in terms of Apple. The iPhone is a game changer, and the ecosystem that Apple has in place and generating money has momentum. Google and Microsoft have words and some devices that are not yet in iPhone’s league.
Third, mobile is a big deal, and I found a number of patent documents that suggest that Google is headed down the path to a walled garden. Right now, I don’t think that aspect of the Google strategy has been analyzed fully. The battle, therefore, may not be the one that most pundits write about; namely, Google and Microsoft. There are other wars to fight and soon.
Agree? Disagree? Help me learn.
Stephen Arnold, September 15, 2008
New Beyond Search White Paper: Coveo G2B for Mobile Email Search
September 8, 2008
The Beyond Search research team prepared a white paper about Coveo’s new G2B for Email product. You can download a copy from us here or from Coveo here. Coveo’s system works across different mobile devices, requires no third-party viewers, delivers low-latency access when searching, evidenced no rendering issues, and provided access to contacts and attachments as well as the text in an email. When compared to email search solutions from Google, Microsoft and Yahoo–Coveo’s new service provided a more robust and functional service. Beyond Search identified 13 features that set G2B apart. These include a graphical administrative interface, comprehensive usage reports, and real time indexing of email. The Beyond Search research team—Stephen Arnold, Stuart Schram, Jessica Bratcher, and Anthony Safina–concluded that Coveo established a new benchmark for mobile email search. For more information about Coveo, navigate to www.coveo.com. Pricing information is available from Coveo.
Stephen Arnold, September 5, 2008
WordLogic, Codima: Entering the Search War
September 6, 2008
WordLogic (Vancouver, BC) and Codima (Edmonton, AB) have teamed in a joint venture to develop Web search technology. Not much information is available on the tie up. Mediacaster Magazine has a short announcement of the deal here. WordLogic has carved a path for itself in mobile device interfaces. Codima is a VoIP specialist. More information about this company is here. Mobile search is attracting interest from Google and Yahoo. Coveo, another Canadian outfit, has a mobile email search service that looks very solid. As more information becomes available about the WordLogic and Codima play, I will pass the information along.
Stephen Arnold, September 6, 2008
The Unthinkable: Verizon Dates Google
August 23, 2008
Late last year and in the first four months of this year, one of the consulting firms who use me as an old rented brain had me do Google Mobile briefings. We did five or six of these to different telcos. I showed up, did my talk, took bullets and left. I can honestly say that the telcos were clueless about Google.
The key points in my briefing included:
- Google’s interest in thing telephonic date back to 1999. One of its first patent applications was for Quality of Service
- The sweep of Google’s patent documents and technical papers was broad, making it clear that ideas were not confined to two or three lone wolves; there was a range of interests evident
- Search was “baked in” to many innovations; that is, an innovation in mobile “snapped in” or “hooked” into search functions.
Now battle lines are starting to be visible. AT&T has a deal with Apple. Verizon may have a deal with Google. You can read informed descriptions of the speculations, insights about informed guesses, and business analyses. I found these write ups useful:
- eCommerce Times has a “why the deal is good” write up here.
- GigaOM’s useful business-technology comments here.
- The RedHerring.com site has a good business slant on the alleged deal here.
My take on this deal is somewhat different from the Wall Street Journal type of analysis. First, I think Verizon, like IBM, believes it has the upper hand in any deal with a vendor. Google’s a vendor, so the Verizon mind set is “we have this under control.” I think Verizon has only limited awareness of what Google’s capabilities are. Remember. Verizon is doing a search deal.
Second, Google is going to benefit from this deal. When the agreement is finalized, Google gets to learn from Bell Heads. How this first hand knowledge plays out is anyone’s guess.
Third, Google is not “officially” in the telephony game. Forget the Android partners. Forget the Sprint close dancing. Google and Verizon–it’s the hard evidence that Google is serious.
Exciting stuff if the deal gets done.
Stephen Arnold, August 23, 2008
Android: More Than Mobile
August 16, 2008
Venture Beat has an interesting article “Android Wants to Be on Any Device, Not Just Your Phone.” The premise of the write up is that Android may be a cog in a larger operating system initiative. For me, the most interesting statement in this write up by Eric Eldon and Matthaus Krzykowski is
The blogosphere hasn’t treated Android well — the SDK has taken many months to get to this stage since it was announced last year. The anti-Android trend will likely continue as commentators compare the HTC and the iPhone (the iPhone is better), and also say the U.S. T-Mobile network is bad (it is).
I agree that Android is part of a larger push by Google What struck me when reading Google’s technical papers is that the company seems to be considering an approach that puts some functions in the cloud and others in devices. When the two are hooked together, a different type of computing environment becomes possible.
Stephen Arnold, August 16, 2008
Google and Hosted Telephony
August 11, 2008
Network World’s Matthew Nickasch wrote an interesting article “Will Google Consider Hosted Telephony?”. You will want to read it in its entirety. The story is here. The premise of the story is that Google may offer a range of wireless services from the cloud. Mr. Nickasch asserts:
While no official plans, or even rumors have been released, a Google-hosted VoIP environment may be incredibly popular for organizations that utilize Google Apps for all other collaboration needs. We’ve seen our fair share of free hosted VoIP environments, like Skype, Free World Dialup, etc, but Google has yet to venture into such a market.
My own research into Google’s telephony activities suggested to me that:
- Google started working on mobile and other telephony services as early as 1999
- Telephony, based on my analysis of Google patent documents, has been one of the areas of intense activity for almost a decade.
- Google’s innovations extend deeper than hosted applications; for example, Google has a clever invention for routing calls in a distributed mesh environment.
Mr. Nickasch ends his article with several questions. What’s your take? Has Google lost its chance to make a telco or has Google a different game underway? In Google Version 2.0, I discuss options for Google’s “other game”. Hosted services are already here, and I think Googzilla is watching and learning.
Stephen Arnold, August 11, 2008
Google: Universal Search on Mobile Devices
July 31, 2008
My earlier post here about Google in South Africa contained a reference to universal search on mobile devices. I had two incoming messages asking about this functionality. One person asserted that universal search on a mobile device was not possible and that the South Africa source I cited was out to lunch. To offer some additional information, I would like to direct everyone’s attention to US20080183699, “Blending Mobile Search Results.” This patent document discloses an invention by Ning Hu and Vida U. Ha. You can snag a copy at the wonderful USPTO here. The abstract for this invention is:
Methods, systems, and apparatus, including computer program products, for blending mobile search results. A method includes receiving a search query and multiple search results. The search results each satisfy the search query and have a respective search result quality score. The search results include generic and mobile search results. The generic and mobile search results each identify a generic and mobile resource, respectively. The search result quality scores include mobile and generic search result quality scores for the mobile and generic search results, respectively. The mobile search result quality scores and the generic search result quality scores were generated according to different scoring formulas. Based on one or more terms in the search query, the search query is classified as a mobile query. As a consequence, one or more search result quality scores are modified to improve the sorting of search results that include both mobile and generic search results.
My reading of this patent document suggests that Google indeed has some Universal Search tools on its digital workbench.
Stephen Arnold, July 31, 2008
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