Google looks to mobile for growth

By Giselle Abramovich

April 21, 2008

Sergey Brin is cofounder of Google

Google's first-quarter earnings call last week revealed a couple of things: results were impressive and cofounder Sergey Brin was gung-ho on mobile search.

Mr. Brin said on that call that mobile search traffic is growing fast, even in times of economic struggle. Many believe that Google’s performance this quarter points to the success of digital advertising as a whole.

“Google's continued growth shows how digital advertising continues to prosper and offer efficiencies that attract advertisers and increased spend despite worries about the economy,” said Duncan Parry, director of corporate strategy at Steak Media, New York. “This is an area we feel is finally taking off for consumers and will continue to grow throughout 2008 and into 2009.

“We expect the integration of DoubleClick to lead to new tracking and targeting innovations this quarter and the next,” Mr. Parry said. “It will also be interesting to see if a free 'lite' version of DoubleClick's platform emerges in a similar vein to Google Analytics."

Let's talk earnings. Imagine that a slowing economy isn’t an issue for Google. Easy: The Mountain View, CA-based search giant reported first-quarter revenues of $5.19 billion and net income of more than $1.31 billion.

These results were far higher than analyst predictions.

But, when it comes to mobile, is Google now placing emphasis on the channel because of rival Yahoo’s recent strides in that area?

“I don’t think this has anything to do with Yahoo,” said Charles Golvin, principal analyst at Forrester Research, Cambridge, CA. “Google is quite dominant in the online channel already and so when looking for growth opportunity they are not going to get significant growth there.

“Therefore, Google is looking for new channels that has the potential for substantial growth and mobile is first on their list,” Mr. Golvin said. “Mobile is the most akin to the Internet as it has banners, search and ad networks – all things that are present and growing in the mobile channel.”

Google is also making moves into mobile to position itself to reach developing markets.

“If you look at the developing markets there are some people who will be on the Internet and they are more likely to do so on the phone than on a PC,” Mr. Golvin said. “In order to reach these new subscribers, Google needs to have a presence in mobile.”