Google in talks with Verizon Wireless: sources
NEW YORK (Reuters) - Google Inc is in active talks with number-two U.S. mobile carrier Verizon Wireless about putting Google applications on phones it offers, people familiar with the matter told Reuters on Tuesday.
Context & Ripple Effects
The report lands one day after the [[a:1180931|Wall Street Journal's question over whether a Google phone could connect with carriers at all]] — and answers the first half of it: Google is in active talks with Verizon Wireless, the number-two U.S. carrier, per Reuters sources, to put Google applications on phones Verizon offers.
The talks fit a busy stretch for Google's platform ambitions: its OpenSocial social-networking stack goes live Thursday as a confirmed push against Facebook, coming right after Google lost the bidding war to invest in Facebook itself. Distribution on tens of millions of handsets would give those applications a channel no desktop strategy can match.
First-order effects
- Verizon Wireless would gain Google-branded applications — search, mail and whatever else the talks cover — on its handset lineup, while Google secures carrier-scale distribution beyond the PC.
Second-order effects
- Rival U.S. carriers face pressure to cut their own deals with Google or with competing application providers, turning handset software into a negotiation point alongside hardware pricing.
- Handset makers selling into Verizon gain a new specification to meet — shipping devices that carry and integrate Google's applications — shifting some differentiation from hardware features to preloaded services.
Third-order effects
- If a top-two carrier hosts a rival internet company's applications rather than gating them behind its own portal, the carriers' walled-garden model starts giving way to revenue-share deals around third-party services — a structural shift in who controls the mobile user experience.
The trend: U.S. mobile carriers are moving from closed, carrier-owned portals toward hosting major internet brands directly on their handsets, with Google pushing hardest to be that tenant.