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Google and Yahoo step up mobile ambitions

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Google and Yahoo, for the second time, announced new mobile activities on the same day. Their approaches, while quite different, will increasingly bring the giants into conflict in the emerging market for delivering consistent services and content across home, PC and mobile devices – and will enable them to challenge the handset makers and carriers to be the dominant mobile brands.

But while Yahoo is sticking to its core capabilities, and simply increasing the range of delivery platforms, Google has a wider agenda that will increasingly embrace the wireless network itself, and has even gained patents covering fast cellular data transmission.

The key mobile announcement by Google at last week’s CES consumer electronics show was a deal with Motorola to offer single button access to its search engine from selected Motorola handsets.

The two companies have signed a three year tie-up which will see Motorola phones carrying Google in a bid to boost usage of cellphones for internet access and so pique operator interest.

Google could sign similar deals with other handset makers.

On the surface this appeared to be a simple agreement that would increase the appeal of the phones to end users and drive increased traffic. But dig a little deeper, and the conflict of interest that will become critical in any dealings with Google becomes clear.

The handset majors, once unquestionably the strongest brand owners in the mobile value chain, have in the past few years been fighting to defend that position from the increasingly high profile branding of their operator customers, with activities like Vodafone Live! As handsets evolve beyond being mere voice instruments to carry complex content and services, the situation is only getting more perilous for the phonemakers, as content and applications providers’ brands also vie for attention. The threat to the handset manufacturer’s brand, and therefore some of its competitiveness and value, is particularly clear in the MVNO virtual operator sector, where operator and content brand can be merged, as in the case of Disney or sports broadcaster/MVNO ESPN.

It is also particularly strong as user demand for the open internet experience on the handset rises, bringing internet application brands to the fore. None is more powerful than Google, and by providing a Google button on high value models, Motorola has lost the chance, that phonemakers still had until recently, to create their own internet experience with, for instance, ‘Moto Search’.

The same dilemma was seen in Motorola’s troubled relationship with Apple over putting the iTunes service on the ROKR handset.

It is notable that the newly update ROKR no longer features iTunes, but instead offers the Motorola iRadio music service.

Yahoo Go

Yahoo, for its part, is taking a slightly different approach from Google, as it launches Yahoo Go. It is taking a more applications- centric view, and seeking to offer an integrated parcel of services that could make it the hub of a user’s mobile experience.

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