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Google, Verizon Now Best Of Pals

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All of that legal nastiness between Google and Verizon over the latter’s alleged attempts to alter the conditions of the forthcoming 700MHz spectrum auction has faded, as the two may team up for a Google Phone deal.

Google, Verizon Now Best Of Pals
Google, Verizon Now Best Of Pals

Let the rampant cynicism begin about Google’s talks with Verizon and Sprint about those carriers offering a Google-powered mobile device to their customers.

First, here’s a brief timeline of how Verizon and Google have gotten along ever since Google proposed four rules of openness in July 2007 to the FCC for the auction:

September 2007: Verizon sues the FCC over the adoption of two of Google’s four suggestions, calling those rules “arbitrary and capricious.” Google criticized Verizon’s action as one that would “prevent consumers from having any choice of innovative services.”

October 2007: Google accuses Verizon of secretly and improperly lobbying the FCC behind the scenes to scrap the two rules of openness it has adopted for the wireless auction.

Now the Wall Street Journal suggests the two companies could be best pals, thanks to the uniting power of the still-unlaunched Google Phone:

Last week, however, Verizon dropped its appeal of the FCC rules. It was unclear whether Verizon’s decision was connected to discussions now under way with Google. A spokesman for Verizon said there was no link between any discussions with Google and the lawsuit.

Interesting development, to be certain. It has been suggested that Google’s hardware would allow Verizon or Sprint, or whichever partnerships they make, to offer the phones cheaper than others.

But we have to wonder how much cheaper a Google Phone can get than free. Visit any wireless company’s retail store, and there is bound to be at least one phone offered for free, in exchange for agreeing to a two-year service agreement.

It doesn’t make sense that cheaper phones would be an enticement to a carrier. They deal with powerful Southeast Asian hardware consortiums now, who deliver inexpensive hardware that Verizon, et al, can provide at no upfront cost to customers.

The only way a cheaper Google Phone could be more appealing would be if Google were paying Verizon to offer it to people.

Aha. I think we just figured out what kind of behind the scenes discussions are taking place. The mobile advertising market is expected to blossom into multi-billions of dollars. Google could be offering Verizon or other carriers a piece of the action.

Verizon would make money coming and going, from the monthly subscriber fee and from ad revenue generated by the actions of the Google Phone users.

If the Google Phone launches as another piece of hardware a carrier can offer, watch the earnings announcements from the wireless companies. We won’t be surprised if they enjoy a little bump in revenue from ad dollars.

Google, Verizon Now Best Of Pals
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