Was Google the real winner in the 700 MHz auction? It seems unlikely because the Web search giant didn't actually win any of the spectrum up for bid. But in the past weeks and months, it has made itself a major player in the world of the mobile Web:

• Google pushed for an open-access block for the new spectrum, and it was willing to enter the bidding to make it a reality, which ensured a data network that will be kind to its software and applications.

• Google's Android software project launched with much fanfare. Although it is more promise than reality, that promise is high. With Apple taking more of a walled-garden approach with its iTunes/App Store ecosystem for the iPhone, open-source and Web-centric developers now are almost exclusively pointing toward Android as the phone that breaks the mobile status quo.

• Mobile advertising still appears to be Google's mobile cash cow, and the company has cut some key deals to drive that strategy forward, including a recent ad partnership with Nokia.

• Google's apps are proving successful on mobile devices. Recently, it beefed up its offerings at mobile.google.com, including mobile-ready Search, Gmail and Maps applications. Other key capabilities, such as Gears for offline access and MyLocation for GPS-like features, also have shipped. In almost all cases these apps are Web-based, openly available and free.

• Google also has made a few wild-card moves, including potentially buying a company that provides wireless data services via balloons floating over cities. Plans to offer free Wi-Fi in partnership with local governments seem to have come and gone.

So what does all this mean? Clearly, Google won't be in the business of owning wireless networks — all balloons aside. Whether it will ever work out reseller or mobile virtual network operator-style arrangements with other operators remains to be seen. More likely, it will continue to pursue carrier deck placement/revenue-sharing deals on the one hand while heavily working the Android opportunity with the other.

Although Android at its essence isn't much more than a mobile Linux stack, it is a Linux stack backed by the Google name, said David Chamberlain, analyst for In-Stat.

“I think that name will be important for a couple of reasons,” he said. “First of all, they have already made many people a lot of money by placing advertisements. Ultimately, this closed-loop system has led to some really good things throughout the Web. I expect there will be similar benefits to both [mobile] publishers and advertisers — and to Google, of course.”

That said, Android won't take hold overnight, and “a three-to-five-year window is plenty of time to build a competitive response to — or partner with — Google,” Chamberlain said.

Analyst company STL Partners — best-known for its Telco 2.0 research — is working to measure the competitive threat Google poses to carriers. “Google is interesting because many people feel that it is ‘game over’ for the operators, and Google will merrily extend its dominance of Web search into other areas, including voice and messaging and mobile advertising,” said Chris Barraclough, analyst for STL.

But while detailing Google's strengths — particularly scale, cost leadership and massive market share in Web search — STL believes relative weaknesses in other areas — including voice and messaging, billing and payments, and customer knowledge — mean Google isn't likely to dominate highly competitive and entrenched wireless players in the same way it has ruled the Web.

In fact, because Google's weaknesses tend to match operators' strengths, and vice versa, partnerships may be the better approach. But at least for the time being, both sides look more likely to continue circling each other cautiously.
— Rich Karpinski