Google: the future is in mobile phones

Google: the future is in mobile phones

Google CEO Eric Schmidt announced the search giants fourth quarter earnings today and included some interesting comments about their mobile strategy.

Some of the deals Schmidt highlighted were partnerships with China Mobile (the worlds largest cell phone company), Samsung, SK Telecom and Apple who called on Google to create the mapping interface for the iPhone.

Google has also launched some mobile applications of its own including the popular Gmail Java download and a GPS version of its mapping software.

When asked about the future Schmidt replied:

It is clear that 2007 will be the year that mobile search query traffic grows substantially. Our current model is to use targeted text ads and we have evidence that the monetization of those ads is higher than in non-mobile uses. So it looks like the advertising revenue on a per-search query is likely to be significantly higher on mobile than on non-mobile.

As part of that, we are investing in new categories of using mobile devices. For example, YouTube content is being used and can be viewed on mobile devices in various partnerships that we’re doing. Those are as much opportunistic for us, and they're not really driving revenue yet; although in theory, you could imagine a combination of video, video advertising on a mobile phone that would have the best entertainment value but also very, very high monetization rates. We're unlikely to split it out. It's not material today in a financial sense, and more importantly, it's still emerging.

We are making a significant investment in technology around mobile because of the growth rate of mobile and the ultimate scale of that business. You won't really see its financial impact until '08.

Google are no doubt aware of the huge potential of mobile devices and are already in partnership with some of the major mobile companies including China Mobile with their 300 million subscribers. They are perfectly placed to create innovative solutions and have the brand trust to make the partnerships that will help their ideas spread.