US consumers increased their time spent per day with mobile by nearly 40% in 2009, while online activities saw a 17% drop and TV and video experienced a 32% decrease. Mobile advertising spending is likewise increasing at a faster rate: a projected 48% in 2011, versus 8.4% growth for online, according to eMarketer.Facebook's new messaging system rearranges the competition with Google on mobile devices roughly like this:
- Mobile service: Google, Facebook
- Ads: Yes, No
Facebook's Android app currently carries no ads, although its regular web site is on course to generate more than $1.2 billion from ads this year. At some point, Facebook will want ads on its mobile apps.
- Email: Yes, Yes
Both companies now provide competing email services that will function on mobile devices. Both can mine users' message or Gmail information to better target ads.
- Search: Yes, Kinda
Google remains the king of search both on the web and in mobile. Facebook has a search function via Microsoft's Bing, but it's not a serious contender either in search or in the ads that accompany search.
- Mobile: Yes, No
Google's Android operating system is fast-growing and offering Apple's iPhone/iPad/iAd system a run for its money. Facebook, however, is entirely dependent on Google and Apple to distribute its product on mobile devices.
- Apps: Yes, Yes
Both companies have widely distributed sets of apps. Google has more of them, and different kinds, but is there a smartphone owner on the planet who doesn't have apps from both?
Assume that Facebook rolls ads inside its mobile app, and starts to take a significant share of ads that would normally have run elsewhere on Google's Android/Admob system. How does Google respond? One possible answer is that it should do what Apple does with its apps and iAd: Demand a cut of the proceeds or threaten to boot or disable Facebook from its phones. That, of course, would be a non-threat, because no mobile service would dare face their own customers with devices or a system that couldn't use Facebook.
Nonetheless, it's hard to imagine Google tolerating Facebook getting a free ride on Android if its email system or its apps start to generate significant revenue. Your move, Google CEO Eric Schmidt.
Related:Ian Sane, CC.