Google Searches for “Android” Gains

Source: http://www.googleandroidblog.com/news/google-searches-for-android-gains

MOUNTAIN VIEW, Calif. (TheStreet)Google’s (GOOG Quote) Android operating system may be viewed as a shot in the arm for smartphone makers such as HTC and Motorola (MOT Quote), but the OS is also key to the Internet giant’s long-term strategy.

The tech heavyweight has been frantically extending its reach beyond its traditional search business into areas such as video sharing, digital music and PC operating systems.

Against this backdrop, Android represents a gilt-edged opportunity for the company to extend its desktop search capabilities into new areas. If Google is planning an OS war with Microsoft (MSFT Quote), then smartphones are the first significant battle.

With more than 10 devices and a number of service providers now in its camp, Android has done a good job dislodging the Windows Mobile operating system.

Apple (AAPL Quote), Research In Motion (RIMM Quote) and Nokia(NOK Quote) pose a stiffer challenge for Google, although the search giant is certainly establishing itself as an OS player.

“We think the adoption of Android so far has been better than expected, with nearly 20 devices expected to be available by the end of the year,” commented Youssef Squali, an analyst at Jefferies & Company, in a recent note.

With low-cost, scaled-down laptops, or netbooks, fast becoming the consumer technology du jour, the stage is set for Google. Although Android is unlikely to feature in mini-computers, the Internet firm has laid the foundations for its Chrome OS to mount an assault on Microsoft.

Microsoft, for its part, is attacking Google in its back yard through its Bing offering. The software giant has also clinched a search partnership with Yahoo! (YHOO Quote) as part of its long-term plan to challenge Google.

Such is the importance of smartphones, however, that Google is even rumored to be planning its own device. Bypassing telcos to sell the phone directly through retailers would undoubtedly be a bold move, but would underline the company’s desire to gain wireless share from Apple, Nokia and Microsoft.

Last week the search giant spent $750 million to acquire mobile-ad specialist AdMob. With Android phones such as Motorola’s Droid starting to catch on, the purchase is seen as a shrewd move.

“We view Google’s $750 million all-stock acquisition of AdMob as a strategic move, potentially accelerating the company’s growth in the mobile ad market the way DoubleClick expedited its entry into Display advertising,” wrote Jefferies & Company analyst Squali in his note.

The analyst explains that while Google will not generate revenue from the open-source Android OS, AdMobs could significantly boost the company’s advertising revenue.

“Over time, we believe Google would embed some of the AdMob technology platform deeper into Android to make the core of the mobile OS more advertising friendly,” he said. “The company’s aggressive forays into mobile should put additional pressure on other leading advertising players such as Yahoo!, Microsoft and AOL to come up with a more aggressive mobile monetization strategy.”

At least one analyst believes that Google also could reap the benefits of the e-book boom through the Android OS.

“Google, which recently announced a browser-based e-reader, could offer applications for Android-based devices of various form factors,” said Allen Weiner, research vice president at Gartner, in a recent statement.

Despite all the noise surrounding Motorola’s Droid launch and HTC’sAndroid phones, Google could be the biggest Android winner.

— Reported by James Rogers in New York

[via The Street]


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