Gphone & Advertising

For more than two years, a group of engineers at Google have been working in secret on a mobile phone project. As word about their efforts has trickled out, expectations in the tech world for what has been called the Gphone, have risen.

Google wants to extend its dominance of online advertising to the mobile Internet, a small market today, but one that is expected to grow rapidly.

Some analysts say that the Google project’s effect on the wireless industry is not likely to be as profound, at least initially, as that of Apple’s iPhone, whose revolutionary look and features have redefined consumer expectations.

“The iPhone was a milestone in terms of how people use a mobile device,” said Karsten Weide, an analyst with IDC. “The Gphone, will help Google with distribution of their online services to a wider audience.”

In short, Google is not creating a gadget to rival the iPhone, but rather creating software that will be an alternative to Windows-Mobile from Microsoft.

Some believe another major goal of the phone project is to loosen the control of carriers over the software and services that are available on their networks.

“Google’s agenda is to disaggregate carriers,” said Dan Olschwang, the chief executive of JumpTap, a start-up that provides search and advertising services.

Carriers are likely to give Google a cool reception. Companies like Verizon and AT&T have spent billions of dollars upgrading their networks. Now they want to make sure those investments pay off, in part, through advertising.

Most carriers declined to comment on Google’s plans. But Arun Sarin, the chief executive of Britain’s Vodafone Group, which offers the Google service on its phones, said it was not clear what compelling functions Google would offer.

“What is it that is missing in life that they are going to fulfill?” Mr. Sarin said.

Via NYT