Google, a Giant in Mobile Search, Seeks New Ways to Make It Pay
MOUNTAIN VIEW, Calif. — In early 2008, in the early days of the iPhone era, Google engineers began noticing something unusual in the search engine's logs. Owners of these new phones were doing a huge number of Web searches.
Context & Ripple Effects
The monetization problem this piece documents has been building since 2007, when Google mined early mobile logs and found that smartphone queries ran longer strings and produced more searches and more clicks than desktop traffic — volume that its ad system was never built around. Sergey Brin followed up in September 2010 by arguing that smartphone apps themselves should be searchable, an admission that the mobile web Google knew how to index was being bypassed by native software.
The urgency now comes from the money side: days before this article, Google missed its numbers in its most recent earnings despite generating large amounts of cash, and it publicly stated on April 15, 2011 that it wants the iPhone to grow even as it builds Android. The company is simultaneously experimenting with new business shapes elsewhere — Chrome notebooks sold as subscriptions rather than purchases — so making mobile search pay is one strand of a broader search for revenue models beyond desktop text ads.
First-order effects
- Google's own earnings pressure turns mobile search from a defensive project into a monetization mandate, pushing its ads and product teams to price and package smartphone queries differently from desktop ones.
- Apple benefits either way: with Google explicitly stating it wants iPhone usage to grow, the iPhone's search volume becomes an asset Google must monetize even when it runs on a rival's platform.
Second-order effects
- Advertisers face a re-segmented market as mobile inventory gets priced and formatted separately, forcing agencies and ad networks that grew up on desktop click economics to build mobile-specific offerings.
- Rival platforms and carriers gain negotiating leverage: if Google needs mobile distribution to make the business pay, deals over default placement and preloaded search become more valuable on both Android and iOS.
Third-order effects
- If mobile query growth keeps outrunning desktop monetization, search economics split into two regimes — high-value desktop clicks and cheaper, higher-volume mobile engagement — reshaping how the entire search industry prices attention.
- The deeper structural question is whether indexing shifts from open web pages toward apps and closed data streams, the direction Brin signaled in 2010, which would change who can be crawled and who captures the value.
The trend: Search is splitting into two economic regimes as mobile query volume grows faster than the desktop-priced ad model built to serve it.