Friday, August 31, 2007

GooPhone response

People, people, people! Google isn't a software company. It isn't a hardware company. It isn't even a search company.

Google is an advertising company.

Google provides all those services to us for free so more people will use them so people will pay more money to try to advertise to those people. That is their motivation to keep providing quality services for free. It's as simple as that.

The GooPhone is about creating a new, highly targeted (and therefore highly profitable) method of advertising.

If you're on your GooPhone looking for a Mexican restaurant in Denver, what restaurant owner wouldn't pay a premium to stick an ad in front of someone who 1. is actively looking for a place to eat 2. near their establishment (thank you GPS) 3. around dinner time?

Google isn't getting into the cell phone business. They probably aren't looking to make much off the handset or service fees for the same reason. And it's the same reason they didn't charge for a gig of e-mail storage when they shocked everyone with Gmail.

The market is obviously heading in a mobile direction. Google knows this. The GooPhone opens an entirely new revenue stream because the more people they get using GooPhones the more advertising they will sell.