Monday, September 3, 2007

Thoughts on GPhone and GPay (Taken Together)

Lots of buzz around in recent days about GPhone. The rumors center on the notion that Google will experiment with a branded phone in India (using a network of alliances and partnerships); then it may expand to other countries including USA and Europe. There may be some merit in doing it in India--one of the fastest growth markets in the world. Besides, many do not have PC-based access to the Internet and mobile phones serve as a gateway to access the Net.
I never paid serious attention to GPhone rumors. Here is a good overview of the rumors and news articles. Then, I saw this posting today in London-based Timesonline about GPay. It refers to a patent filing that has been published by the US Patent Office on August 30, 2007. Clearly, SMS-based payment systems exist in many parts of the world: So, what's so great about GPay? Also, Google has an online payment system, Google Checkout that competes not so effectively against EBay's PayPal. So, the question is: Is GPay a serious threat?
Unlike other SMS-based payment services which may be fragmented and not have the computer processing capability to collect and analyze the massive amounts of data, Google may be in a much better position to link 'search' to 'purchase' thereby providing valuable insights to marketers (and advertisers). GPhone and GPay taken separately may look like 'me-too' imitations but taken together hint at the power of information to provide insights into how (and when and where) we access information and how we buy products and services.
Where's the cash resgister located in GPhone and GPay? It's not just in a share of the revenue from the mobile operators that offer GPhone. Nor is it just in transaction fee from GPay payments. It's more about monetizing advertising in the mobile arena and offering insights to the marketers about placement of advertisements in context. GPhone and GPay may well be the link to Google's serious foray into monetizing advertising in the fast-growing mobile space. Viewed this way, Google is not deviating from its core business at all. In fact, it is aggressively using its core capability to exploit emerging new market niches. I am watching to see Google's moves in the coming weeks and months. I am also equally interested to see what the competitive responses and counter moves in the business network.

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