05:49 AM

3.7.07 gPhone silliness ...

Venture Beat is reporting heavily on rumors that Google is working a cellphone, rumors that Eric Schmidt denied yesterday.

It all stems from a post from Polaris Venture Partners' Simeon Simeonov (a name right out of Tolstoy), who said a source described a phone stack that would run optimized Java on a C++-bootstrapped OS. Everyone's sure that means Google is doing a Steve Jobs-like number, where Google controls hardware and software and service providers dance to their tune.

That is sheer speculation, though. Consider what he told VB:

Why does he think Google will want to dictate the hardware too? Look at Apple, he says. Apple’s selling point for its iPhone is that it controls both the hardware and software completely, and if you’re a partner or user, you have the option of being on board or not, he explained. Microsoft, on the other end of the spectrum, says ‘We sort of control the software, but you can mess with it in other ways — for example, by taking out the IE browser, and putting in Opera.”

He said Google itself may not even be sure about where it is on the spectrum between Apple and Microsoft, because it is in a complex dance with multiple players, such as with carriers about ad revenue share and distribution. On the one hand, Google has a great brand, but it’s not like Apple, where its brand is associated with hardware. However, Simeonov says “it doesn’t feel Googlish” to forgo the hardware, and let its operating system be loaded on any device.

Doesn't feel googlish?

I won't pretend to have the insights into what's Googlish that Simeonov might, but unlike Apple Google is not a hardware company, doesn't have any experience in managing hardware and virtually no experience in consumer (even business consumer) marketing.

What does Google get out of having its own phone stack? Numbers. Total control of ad placements, geospatial data, user behavior. Why does it even want to build the software? Because there's a very big future in "real world" advertising. Being able to serve ads based on where people are in space and what else Google might know about them (search history, ad-click history, urban habitat), I mean that is very valuable stuff.

I think Schmidt is throwing a red herring when he says Google Apps is going to be a big chunk of Google revenue. Nothing fee-based will ever be a big chunk of Google. Google is about free, online software, leveraged for advertising potential, which they datamine the shit out of. If they know people are coming to Google Apps from inside the enterprise, there's value there. But Google Apps will not be the Microsoft Office of the future. Nothing will.

All of which is to say, sure, Google is going to do something meaningful in the mobile space, something that puts it, not Verizon, in the driver's seat. But it ain't hardware.