Eric Schmidt has been very vocal about the promise of mobile ads. Never mind that mobile ads have been overhyped for more than a decade: This year’s the year, says Eric. In fact, Eric says, mobile ads will one day be a bigger opportunity for Google than the desktop.
Really–that’s what Eric told Cramer this afternoon:
CRAMER: RIGHT NOW [YOUR REVENUE IS] PREDOMINATELY DESKTOP, BUT COUNTRIES LIKE JAPAN, [THERE’S] MOBILE COMPUTING. IS THAT GOING TO BE UP TO SNUFF AND CAN YOU MAKE AS MUCH MONEY IN MOBILE COMPUTING BECAUSE OF THE CELL PHONE COMPANIES?
SCHMIDT: WE CAN MAKE MORE IN MOBILE THAN DESKTOP EVENTUALLY. THE REASON
BECAUSE THE MOBILE COMPUTER IS MORE TARGETED. THINK ABOUT IT YOU CARRY
YOUR PHONE EVERYWHERE IT KNOWS ALL ABOUT YOU. WE CAN DO A VERY, VERY
TARGETED AD.OVER TIME, WE WILL MAKE MORE MONEY FOR MOBILE ADVERTISING.
“We can make more in mobile than desktop eventually.” Google currently makes about $20 billion a year in desktop. For Google to make “more in mobile than desktop,” the targeted mobile advertising market will have to grow from less than $1 billion today to, say, $50 billion (assuming Google pulls down a mind-boggling half of it).
Is that possible? Anything’s possible. Is it something investors should count on?
Well, before we investors count on it, we want Eric (or anyone) to give us one single example of a “targeted mobile ad” that won’t annoy the hell out of the user. We gave up on the breathless “mobile’s gonna be huge” promise about five years ago. We’re also just not buying that crap about Starbucks zapping us with coupons as we walk by. All that would make us do is want to throw our phones through the window. And we’re not yet persuaded that the market for folks searching for “pizza” from their geo-located mobile phones is, in fact, ginormous.
So we’re all ears, Eric. Until we get some specific examples, however, we’re going to view these “mobile will be bigger than desktop” pronouncements as hot air. And you’re not a hot-air kind of guy. So get specific!
(By the way, we think Cramer was actually asking a more sophisticated question, which is “Can you really make money given that the greedy carriers want to shove their hands into every content cookie jar?” And in the US, at least, that’s a fair question. Is Android going to fix that? Details, please!)
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