Google Is An Advertising Company: Now Think (Ad) Phone

Much, much truth in the quote below from Forbes. Despite all the detailed speculation about the Google phone, just keep in mind they're using hardware to protect and extend their ADVERTISING SALES DELIVERY SYSTEM. They see it, quite rightly, moving to a mobile market where they can be an even bigger player. Think GooglePages rather than Yellow Pages (more in coming days) and a ton of social networking AdSense advertising bound much more closely to the medium.

"The phone promises to fuse open-source software with Google's applications on a high-end handset. Rubin's team is building custom mobile-phone software atop the free Linux operating system that will bind the phone tightly to Google's online applications and advertising services, sources say. Software from another Google acquisition, Skia, will put a slick user interface on the package. Finally, Google will build all that software into a smart phone built by Taiwanese handset specialist HTC, according to a source familiar with the matter.

In some ways, that's not so different from Microsoft's strategy: put its operating system, and applications such as Word and Excel, onto hardware from HTC, and later on, other manufacturers. That, however, is where the similarities end. "Licensing a mobile OS is not the endgame," UBS analyst Benjamin Schachter wrote in a note to investors last week.

It is dissatisfaction with the ability of today's phones TO CARRY TARGETED ADVERTISING (my emphasis)--rather than a thirst for software-licensing revenues or desire to build cool gadgets--that is pushing Google to take on the mobile-phone market, industry sources say. "[Google] will likely focus on extending its current ad-based economic model," Schachter writes.

In my mind, not "likely" but absolutely. This ain't no iphone.