One of Google's (NASDAQ:GOOG) big future bets is paying
off well in the present, as the search engine's mobile ad revenues are tracking
to bank $2.5 billion in 2011, Google CEO Larry Page revealed on the company's third quarter earnings call
Oct. 13.
That's more than double the $1 billion run-rate then Google Senior Vice President Jonathan Rosenberg claimed the search engine
provider was enjoying from searches made on Android, iPhones and other
smartphones in 2010.
The new data point was largely glossed over in the glow
of Google's revenue approaching $10 billion and the factoid that Google+ has
racked up 40 million-plus users since June.
Indeed, the $2.5 billion figure may seem like peanuts for
a company set to make $30 billion-plus this year, mostly from desktop-driven
search ads. But if Google can keep on doubling its mobile ad run-rate each
year, it will soon be enjoying revenues in the double digit billions.
Devil's advocates believe this is untenable. As Stifel Nicolaus analyst Jordan Rohan told The New York Times: "Overall
search activity is shifting toward mobile devices, but the preponderance of
search activity on mobile devices is not monetizable. I am worried that Google
doesn't have the same strategic position in an untethered world that it does in
a world dominated by desktops and laptops."
One of the problems with duplicating the desktop search experience
to mobile lies in the fact that when people tend to search for
information from their mobile device, they tend to want to find
something specific and then cease searching when they find it. By
contrast, desktop searchers may be drawn to make other, more
exploratory searches. People don't want to do this on a display whose
dimensions measure less than 5 inches.
Then again, no other company makes $2.5 billion in mobile ads either. Show us another
company making $2.5 billion a year from mobile advertising and we'll show you
where Jimmy Hoffa is buried.
That's not to say Google doesn't face threats to
its mobile software kingdom.
Google has to confront a new threat to its mobile search
business from Apple in the form of Siri, the virtual personal assistant
application many of the 4 million-plus iPhone 4S owners are enjoying to execute
searches by speaking into their phones.
Unlike Google's own Voice Search and Actions software,
Siri derives value from context. You can ask both Siri and Google Voice Actions
what the local weather is, but Siri will let you know if you need an umbrella
if the forecast calls for rain. Moreover, Siri allows for follow-up queries
based on the context users provided from previous queries.
As Jon Pielak, the former developer for
Siri's iPhone application noted: "Tell another system to 'Book at table at
Il Fornaio at 7:00 with my mom;' the system can no doubt create a calendar
entry at 7:00 and might even know who your mom is. It might even be possible
for that device to figure out the closest Il Fornaio restaurant. What
differentiates the NLP [natural language processing] logic in Siri is that it
will maintain context so you could say: 'Also send her an email reminder.'
Siri will understand 'her' and compose the email accordingly."
That's capability Google can only aspire to at this
point. But perhaps not for long. Google and Samsung Oct. 19 will introduce the Samsung Galaxy Nexus smartphone in Hong Kong. This will be the first handset based on
Google's Android 4.0 "Ice Cream Sandwich" platform, which blends
holographic user interface capabilities to smartphones.
Don't be surprised if Google also unveils some new
natural language processing capabilities at the event in China tomorrow.
The company is widely known to be working on those capabilities, and if it has
any semblance of an app that it can release, even in raw beta, you can bet it
will leverage this for a public relations coup versus Apple and Siri.
Indexing & Search Engine News & Reviews 
