Google Inc. is in a position to develop its own mobile cellphone and incorporate wireless Internet into the device with hopes of competing with Apple's iPhone. Code-name gPhone by the Tech community, Google is not in facet creating a telephone with a google like operating system. Instead they are hoping to persuade wireless communication companies and cellular telephone makers to use their own software in the phone. Their plan is to have Google offset the advertising costs of manufacturers to make the devices more attractive to companies so that they will jump on board.
Byron Acohido of the USA Today writes, "Google`s widely anticipated (not to mention top secret) GPhone mobile phone project could trump Apple`s glitzy iPhone by going low cost and low tech." Google recently acquired Finnish company Jaiku who holds a multitude of Short Message Service patents (SMS), which is the technology that enables the exchanging of short messages between cell phones.
Google currently holds a 29% share of the US Market over 16% to Yahoo according to internet marketing research firm eMarketer, and would like nothing more than to control the mobile device market such as cell phones, blackberry's and more, including their own GPhone. Their market share recently skyrocketed when Yahoo! announced it will be listing ads with Google on their sites. On this news Google's stock rose to a whopping $600 per share, speculating that Google's profits may climb to as high as 50% over last year's numbers.
Acohido reports that, "Richard Doherty, research director at The Envisioneering Group, claims Google is driving toward getting device makers to produce basic handsets equipped with a "Gbutton" that takes users right to a Google texting screen." According to Doherty, "Their goal is to get GPhone texters in the habit of querying its vast databases for directions, phone numbers, movie times or restaurant tips and woo advertisers to sponsor GPhone-delivered answers." Apparently the hush-hush top secret project by Google (said tongue in cheek of course), is already in a phase where a model is being designed with rumors abound that includes a Google browser and access to Gmail and YouTube (both of which are Google operated, and both of which are already accessible on the iPhone by Apple).
The first question that all consumers will ask of course, is about the cost. The iPhone was introduced at a price of around $600, only to be dropped $200 dollars in price after the initial hype wore off. Google insiders claimed that the GPhone will be offered at a fraction of the cost of the iPhone, Blackberry and Palm Trio, but this is becoming more and more difficult for Google especially because of Apple's recent announcement of the iPhone 3G and the new price tag of $199 per phone. Google will use its power of advertising to reduce the price of their gPhone, but one drawback according to Acohido is that, "cell phone carriers want a cut of the advertising revenue". A cut that many say Google isn't ready to give.
Although nothing has been released as far as an agreement between Google and a cellular provider, manufacturers are said to have devices ready to go and according to Acohido, "could be ready to be on the shelves in a matter of weeks." The Gphone will be aimed toward a younger consumer. For those teens around the neighborhood, chances are this may be the next hot item on it's way just it time for the summer craze and the holiday season to roll in.
June 17, 2008
Calling All iPhones! Calling All GPhones?
Yahoo! Ads On Google
Yahoo! which is in a heated battle against a takeover attempt from Microsoft, said Wednesday it would host search advertising from Google, one of Microsoft's many rivals. This test-drive, expecting to last for two weeks, could show whether Yahoo! can raise more funds counter balancing its already tanking revenue by outsourcing a key part of its business to Google.
Yahoo! released a statement claiming that it would run ads as part of an experiment that would only last up to a couple weeks and would be limited to no more than 3 percent of their searches. "This is only a limited test and does not necessarily mean that Yahoo! will join the AdSense program." As with most deals like this, Yahoo! would receive the majority of the money from the ads and Google would keep the rest. This would also allow them to make significant job cuts to their search-advertising team, saving them a lot of money, say analysts.
The competition with Google in search-based advertising is the sole reason Microsoft wants to acquire Yahoo!. Microsoft said last Saturday that if Yahoo! did not agree to their offer in three weeks, they would attempt to overturn the board of directors and replace them with those who would vote in favor. They also threatened to lower their offer for the company. Yahoo!'s reasons for resistance are uncertain. The company could be trying to show investors that it has found alternative ways to raise their profits, and ultimately its stock price, without being bought out by Microsoft. Yahoo! has said repeatedly that Microsoft's generous offer of $31 a share is below what they would like to see.
Analysts at Citigroup have calculated Yahoo! could boost its annual cashflow by 25% by outsourcing the sale of search ads to Google, because Google has more efficient technology and an agreement would allow Yahoo! to cut its own investment in this area. But a tie-up would give Google control of more than 90% of all the advertising sold next to search engine results, putting the deal at risk of being blocked by regulators.
In the end, Google once again comes out on top. They lead the market and the industry, and continue to improve their search capabilities. The company is growing at an exponential rate and their stock has proven that it can weather any storm that blows its way.
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