Google, Motorola, and the Future of Mobile Marketing

August 22, 2011 • Blog, Mobile, Research, Search • Views: 225

The talk of the tech industry lately has been Google’s acquisition of Motorola Mobility. Announced on August 15th, Google will pay 12.5 billion for Motorola, making this the largest acquisition in Google history. This move nearly doubles Google’s workforce, and adds more than 17,000 patents to Google’s portfolio.

Industry blogs are full of speculation as to Google’s aims with this acquisition. Obviously, patents are a big part of the equation. The mobile device industry in general is rife with patent disputes, and Google recently failed to win Nortel’s patents, being outbid by a consortium which included competitors Apple and Microsoft.

Beyond patents, this move will allow Google to exert more control over Android. With growing concerns about Android fragmention, more control over the hardware side of the business will allow Google to pressure hardware manufacturers to provide better products, and better user experiences.

Although the speculation about this acquisition’s impact on Google’s business continues to mount, for marketers, the more interesting issue may lie in the impact for mobile marketing. In this post, we will explore key issues in mobile, and look at how the Motorola acquisition could predict future trends in mobile marketing.

Mobile Marketshare

According to a recent comScore study, Google Android is actually the #1 smartphone platform, with a share of 31.2% of smartphone subscribers. Not only is Google the largest smartphone platform, it is also the fastest growing, up almost 8% YoY. Compared to RIM’s rapid decline (down over 5%), and Apple’s stagnancy (hovering at ~25% share), Android looks poised to dominate the smartphone market.

It’s hard to imagine that the Motorola acquisition will do anything but boost Android’s adoption. Patent protection, hardware control, and huge competitive leverage will provide the platforms to secure Android’s continued growth. Not to mention that this deal is a massive signal about Google’s commitment to mobile, which CEO Larry Page has called, “the future of computing.”

Although Android’s lead in marketshare isn’t news for industry experts, it may take some businesses by surprise. Many companies prioritize development of iPhone and iPad applications, sometimes to the exclusion of Android apps. However, the Motorola deal should cement the importance of Android in everyone’s minds. An iPhone-only strategy is no longer viable in an world of increasing Android dominance.

Mobile Search

In a well known Techcrunch editorial, Erick Schonfeld argued that Android isn’t meant to be a profitable independent business, but rather a medium for driving and protecting Google’s search dominance.

While this may be something of an exaggeration, there’s no denying that mobile search is a critical channel for Google. With some analysts predicting that the mobile web will overtake desktop Internet usage by 2015, Google needs to establish itself as the leader in mobile search to protect its core business.

This is another area that is looking good for Google. Estimates place Google’s share of mobile search at basically 100%. Increasing Android adoption will help Google maintain its mobile search monopoly, which is not only a critical source of revenue, but also a huge advantage over mobile and search competitor Microsoft.

For marketers, this should stress the massive importance of mobile websites and mobile SEO. Internet usage is shifting towards mobile devices, and much like the desktop web, Google search is poised to be a critical channel for reaching mobile consumers. For local businesses, the need for mobile optimization is even more critical. As we’ve often mentioned on this blog, local searches make up a huge fraction of total mobile queries. Being findable on the mobile web will soon be a prerequisite for local business success.

The Mobile Web

Last year, Wired magazine famously announced, “the web is dead.” The core of the article was the concept that mobile apps would eventually replace the general web as the primary means of Internet usage.

This potential shift would work heavily against Google, which rests its core business on crawling, indexing, and searching the web. In a world where most Internet consumption takes place in “walled garden” of curated applications, the need for a search engine diminishes, and Google risks obsolescence.

As Google becomes an ever-larger player in mobile, they will be doing everything possible to ensure that the mobile Internet develops into a Google-friendly environment, where web pages, not apps, rule. With Google swaying mobile towards the open web, we can expect a future where the app-vs-web debate continues unresolved.

Ultimately, the Google – Motorola deal points to a future where Google continues to exert an important presence in mobile, and continues to offer powerful channels to marketers looking to reach mobile users. However, we can also see a future where mobile marketing channels continue to be fragmented and complex.

Developing mobile applications for multiple platforms, as well a mobile friendly website, while also optimizing for mobile search, is a daunting undertaking for any business. Despite this complexity, Google is betting big on mobile, and in order to stay relevant in a rapidly evolving marketplace, businesses must follow suit.

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