Google may have lost the auction, but it’s not necessarily that big a defeat.
If anything significant at all, the news that Verizon Wireless had won the US government-run auction for the 700MHz band of the spectrum may have actually been an ideal outcome for Google.
It gives investors the confidence that Google is sticking to it’s guns, the internet. Not swanning off and dabbling in other markets as others have tried and failed to do.
Yet Google has still been able to profit from the newly available airwaves by ensuring the bids for the “C block” of the available spectrum escalated to $4.6 billion. By reaching that price it has triggered a provision that requires the new wireless network to accommodate all mobile devices, including equipment using Google’s anticipated Android platform, allowing them even more scope to distribute advertising onto the mobile internet.
Verizon bid a total of $4.74 billion to win the majority of C block”, which Google hopes will make it easier for consumers to access its search engine and other products on smart phones and other mobile devices.
Google congratulated Verizon, describing the outcome as a consumer victory. “Consumers soon should begin enjoying new, Internet-like freedom to get the most out of their mobile phones and other wireless devices,” wrote Google lawyers Whitt and Faber.
“Google has plenty of other things on its plate right now,” said analyst Marianne Wolk of the Susquehanna Financial Group. “This (wireless network) would have been a ‘nice-to-have,” but it’s certainly not a must have.”
Whilst you could be forgiven for thinking that the mobile advertising market is pretty minute at the moment there are growing signs that it will grow to disproportionate sizes. The success of the revolutionary iPhone has already outgrown most analysts expectations and with Microsoft’s takeover of Google-rival Yahoo looming, we can expect more of this news to come.
