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November 30, 2007

Google: Why Mobile Matters

New Citi report out from analyst Mark Mahaney explaining why mobile matters to Google. Pace some points I made on CNBC this morning, Mark argues alongside me that Google's spectrum bid makes sense, even if it doesn't really want the spectrum itself. It is a useful club to drive some wireless company behaviors, like Verizon's recent (maybe) opening up.

At the same time, Mark does a nice job of diving under the rhetoric and coming up with some useful models (with explicit assumptions) about what the impact will be on Google''s P&L over the next few years.

For what it's worth, I think the mobile ad market revenues will be larger than Mark thinks by 2010, but that is more of a quibble. Directionally, he gets to some interesting places and puts that wireless spectrum auction in proper context -- far from a wild duck foray, it's exactly what Google should be doing right now.

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