Does Google Matter?

Sweeping business trends always take much longer to materialize than initially prophesied: witness personal computing in the 80s, VOIP and multimedia first heralded in the 90s, mobile TV now, Google’s domination in the future. The business press fuels this “front-running” almost daily, for example, the prospective Microsoft-Yahoo battle in the sky versus Google, initially for portal-based advertising revenues (versus traditional media), and eventually for subscription-based revenues (versus traditional telco/cableco pipes). Yes, human interest draws us to the novel, the flashy and the foreboding, but does Google deserve the business fear we collectively give it? Should the Telephony world (especially wireless), still primarily a business of subscriber-funded voice revenues, really care about Google?

My thesis is this: Google has its hands full, and we have a lot more pressing issues to tackle first (and the best 5 year plan is always to survive the next 6 months). Basically, Google has a materiality problem. Consider this: if the global advertising market is $600B, the online piece of that is $60B and the mobile portion of that is expected to be $6B (tops), that’s a lot of industry crowding out that Google has to win, even assuming differential segment growth—much less venturing into wireless communications services, another inevitable march. This journey into wireless will surely unfold, but it will take longer than most expect.

Going over the top with 4G or WiMax and network-free handsets sounds elegant, but all of that is still many Erlangs away from commercial grade. Throw in a stronger online opponent like a combined Microsoft/Yahoo/AOL, plus motivated global folks like Nokia, Apple, AT&T and Vodafone on the wireless services and solutions side, and you have the mobile wars equivalent of 300 Spartans at Thermopylae—a handful of elite, tried and true veteran warriors standing ground at the “hot gates” against an ominous, confident global juggernaut, which is staffing its army at breakneck Cisco-like speed.

Google’s possible speed bumps aside (and it’s already seeing some in a few of its various initiatives), Telcos cannot dither and watch Google amass, with tents folded. For the moment, let’s ignore the Chinese-water torture of the fixed line incumbents who bear the quarterly drudge of taking legacy costs out faster than NAS revenue losses, all while funding access capex for high-speed, and facing off with quad-play cable. The wireless sector needs renovation as well, and is more relevant to the future Google battle anyway.