Google Takes AdWords Mobile

(MoneyWatch)  If you cast a large enough net, you'll eventually snag a fish or two. In some ways, it feels like that's what Google is doing with its AdWords program. The company said today that it's extending AdWords reach, optimizing it to include ads that are specific to iPhone and G1 users - which offer full-view Web browsers, as opposed to the scaled-down views on other mobile devices.

The question is: can special ads for mobile be a savior for Google? Its other ventures - from Gmail and Google Apps to YouTube and Grand Central - haven't been exactly home runs, at least in the sense of building revenue models that compliment search advertising. And now, there's concern that the once-lucrative search advertising business model is drying up.
Just last week, Global Equities Research analyst Trip Chowdhry predicted that Google's revenue will fall in the next two years as the economy puts pressure on Google ads and competition from Microsoft heats up. Chowdhry says that Microsoft is giving paid search credits to ad agencies and forcing Google to match. On the surface, it appears that Google is hardly recession-proof. More importantly, that same analyst said users increasingly are tuning out the ads that are placed along the right side of a search results page. Maybe our searches are getting better and we're finding what we're looking for easily, without the need for ads to help us. Whatever the reason, the online ad game is changing.

In that sense, it's reassuring to know that Google recognizes that mobile - specifically smartphones that are often used as portable computers - is the place to be. Mobile users surf the Web differently in that they tend to search for products, business locations or specific local services. In those scenarios, users (myself included) are more inclined to use the ads to help find what they're looking for.

That's not to say that Google shouldn't be stepping up its game on YouTube and its other properties. But mobile web is clearly coming of age - just look at the excitement that was generated around the launches of the iPhone and the Blackberry Storm. Now, with Google's Android mobile operating system out there for developers and manufacturers, 2009 is expected to be the year that a lineup of so-called Google phones hit the scene.

In a tough economy, with ad-spending and consumer confidence down, it will be interesting to see if a mobile strategy can help Google can maintain its mojo during the storm.

Sam Diaz is a senior editor at ZDNet. See his full profile and disclosure of his industry affiliations. This post first appeared on ZDNet's Between the Lines blog.