The search giant looks to Clearwire to help build out its search, ad and Android platforms in an increasingly wireless world.Analysts are bullish on Google's $500 million investment in and agreement to
become a key search, ad and applications provider for both Sprint and
Clearwire, which opened a new beachhead May 7 on the elusive island of speedy
Internet known as WiMax.
WiMax, which pipes data at up to 70M bps to an area that covers up to 30
miles, has been praised as a technology but has struggled to find widespread
traction. Clearwire, with backing of Sprint Nextel, Google and others, plans to
change that.
Google will become the default search provider and preferred application
provider for Clearwire's new retail product and the default provider of Web and
local search for mobile phones from Sprint, which will preload Google Maps for Mobile,
Gmail and YouTube.
Moreover, Google's Android mobile operating system could get a bump from the
deal, with Clearwire offering Android on its voice and data devices down the
road.
The possible Android tie suggests that Google may finally have a fine launching
point for its mobile operating system, which has weathered criticism and doubt
by skeptics who argued that the world doesn't need another mobile platform,
even if it is open source. Yet analysts have said the search, ad and application
ties are what make this deal hum for Google.
"Google's interest is much more about being the primary search (and,
likely, advertising) provider on this network. Android will only make up a
small portion of the devices on the network," Forrester Research analyst
Charles Golvin told eWEEK.
Google in the WiMax driver's seat
IDC analyst Caroline Dangson wrote in a
May 9 research note that the pact puts Google in a position to own the majority
of Internet searches from WiMax-enabled mobile devices in the United
States.
Consider that one third of U.S. Internet users are already using their
mobile phones to access the Internet, with a quarter of these users conducting
Internet searches through Yahoo, Google, MSN
or another search engine.
While Google.com reigns in desktop search, the company is second to Yahoo in
mobile search, with 25 percent of U.S.
mobile Internet users accessing Google versus 29 percent accessing Yahoo,
according to IDC.
"The WiMax deal could change this by 2010 when the Clearwire WiMax
network is expected to cover 120 million to 140 million people in the United
States," Dangson wrote. Moreover, with
Internet search advertising accounting for 98 percent or so of Google's sales,
Google will gain access to millions of mobile WiMax users as the default search
engine for Clearwire.
This will lead to millions in mobile Internet advertising dollars, which IDC
estimated was $50 million in 2007 and should grow to more than $500 million in
2011, she wrote.
Pair these stats with Google's existing paid search links and new mobile brand display ads and Google should
see the return of the $500 million it invested in the Sprint-Clearwire WiMax deal
within the next five years, Dangson said.
Perhaps, but Google is also banking on Clearwire,
which, although it has the complete backing of Sprint Nextel, will have its
hands full in a wireless market that includes Verizon, AT&T and other
service providers. Google's investment, along with capital from Intel, Time
Warner Cable and others, will aid but not guarantee success.
Mobile & Wireless 
