Verizon/Google spat over AdMob – the pundits are wrong again

Poor Google – embattled on all fronts. In full-scale retreat on the China front, they now are facing a newly-invigorated post-Bush FTC, helped by no less than their old friends at Verizon Wireless!

So many people continue to think that Google wants to get into the carrier business – they were wrong when Google bid on 700MHz spectrum, they were wrong again when Google invested in Clearwire, wrong a 3rd time with Android, a 4th with the Nexus One, and at least a 5th with this ruckus.  Google does not want to be a MVNO (mobile virtual network operator), or a real one. At least as far as I can tell. Running a network is a hard, crappy business with ginormous capex and slimmer margins than software, search, and ads in general. Why buy the cow when you can just get the cream?

What Google does want, and has wanted with every strategic decision it has taken in wireless, is to dominate the third screen (mobile). Verizon’s greatest fear is not that they have to compete with Google, it’s that Google will use their networks in a way that completely marginalizes them. The carriers are like ISPs in the early 90s – despite being forced to open up to the internet, they still believe the best way to monetize their capex-heavy assets is to own and control the customer experience. Wrong – Google will help them to monetize those assets by turning them into dumb pipes.

At the risk of sounding like a broken record, let me repeat myself – Google will help carriers make money by turning them into dumb pipes. Dumb. Pipes. Is. Good.  Don’t fight it – embrace it.

Let them hollow you out – let them provide all the luscious, AdMob/Android-fueled, location-based goodness – leave them alone to do their magic. Your users will become voracious consumers of data in ways they couldn’t even imagine in front of their PCs.  And you will have data ARPU well north of $100 a month. It will happen.

Unless of course you help the FTC to hold Google back. But then Apple/Quattro and Microsoft/Bing will simply get more market share and the same thing will happen regardless.

So carriers, negate the hate – embrace the AdMob. You’ll feel all the better for it –

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