By releasing new versions of Google Maps and Gmail for iOS this month, Google helped make the iPhone the best mobile phone on the planet. Why is Google, the owner of Android and Motorola, helping its ostensible rival?
The answer boils down to advertising. Google’s smartphone operating system, Android, has always been incidental to Google’s ad business, the source of virtually all the company’s profits, and Google’s Motorola handset division is, for now, a similar sideshow. Google doesn’t particularly care what operating system you use to view its ads or engage with its sites; it just wants to pull you in. Google pumps money into Android mainly to ensure that companies like Apple and Microsoft can’t push its properties off of smartphones.
Understanding Google’s strategy is especially important now that a wide range of companies, including not only Apple and Google but also Facebook and Twitter, are carefully calibrating how they ship and host software.
'There is no reason to play any games. Google wants to be present on all major platforms.' — Daniel Graf,
Google Maps“Google doesn't make money off of Android which is open source; they make money when people use Google services,” says Joel Spolsky, CEO of the web startup Stack Overflow and author of a widely cited essay on why tech companies drive down prices of ancillary products. “Android's purpose is to create competition in smart phones reducing their prices ... since smart phones are complements of Google's web-based services.”
Google Maps would seem a fantastic place from which to sell ads. Maps apps not only know where you are, they know where you’re going and what types of businesses you’re looking for – the sort of “intention” data advertisers lust for. Google Maps for iOS is ad-free at the moment, but seems unlikely to stay that way for long. The Android version, for example, contains ads. Gmail for iOS is similarly a big potential driver of advertising; the web version of the app has always had ads targeted based on the content of e-mail messages.
Google’s concern for ads helps explain why it reportedly withheld turn-by-turn directions – a top feature – from the data it once supplied to Apple’s own Maps app. Since Apple controlled the front end of that app and Google was a mere backend supplier, there was no ad sales opportunity. Now that Google Maps is a standalone product, there is the potential for ads, and turn-by-turn directions have suddenly been included.
“They are in the hardware business,” Search Engine Land editor-in-chief Danny Sullivan says of Google, “and they do care about selling it, but they don’t necessarily need to make as much money as Apple from the sales of hardware. They are much more in the ad business.… Google’s goal is to serve the customer wherever they are.”
Daniel Graf, Google’s director of Google Maps for Mobile, concurred with this take, saying “there is no reason to play any games with this” operating-system competition. “Google wants to be present on all major platforms, and we want to offer the best possible experience,” he says.
At the same time, adding powerful apps to the iOS ecosystem will surely help sell more iPhones. When we asked about this on the @wired Twitter account, we heard from users who had held off on buying or updating their phones until the map landscape improved. Melanie Batenchuk, an automotive writer in Arlington, Virginia, said she'd "probably" upgrade her iPhone now that Google Maps is available. "I've also been holding off on iOS 6 upgrade on my [iPhone] 4 because I don't want the awful maps!" she added.
Google is hardly the first company to aggressively support a rival platform for selfish reasons. Microsoft was a strong backer of Apple’s Macintosh for decades because its core business was selling applications, not Microsoft’s competing operating system Windows. “There was a period in the early 1990s when Microsoft made more money when somebody bought a Mac than they made when somebody bought a Windows machine,” says Spolsky, a former Microsoft product manager. “In those days, almost every Mac owner bought a copy of Word and Excel which had almost no real competition; Windows users had a choice of WordPerfect / Lotus 123, so a smaller percentage of them bought Word and Excel.”
Google’s willingness to ship iOS apps could look smarter as time goes on. The company trounces Apple when it comes to all things cloud, not just maps and e-mail; its social network, search engine, and highly optimized data centers could give its iOS apps an even bigger edge in the coming years.
“Let’s say Google Maps has five new iterations waiting in the wings, all these new features, and Google knows about it but nobody else does,” says Aydin Senkut, founder and managing director of Felicis Ventures and Google’s first product manager. “What if you suddenly had information on reviews, your friends, everything around you? You end up using maps all the time, and suddenly there is no reason to go to any other app.”
“[Google CEO] Larry [Page] is really smart, and he knows it is no longer just about the search box. Now it is about the context and the location, and the offers and businesses he is going to promote. There are 10 different ways that he can turn Google Maps into a weapon, but for it to be a weapon it has to be there in iOS.”
With reporting by Michael Copeland.
