Can Google make real money on smartphone search?

Google opens up for the New York Times for a love kiss; an article on Google's mobile search and how Google leads in mobile search and how Google moved fastest (and bestest) in mobile search.

Why? Perhaps it's because Larry Page has difficulty communicating effectively with human beings. And the PR staff needs a kindler, gentler public spin. Or, because $GOOG share price refuses to move. But I think it's more sinister.

I think what is propelling this story, at least in part, is two-fold: 

• Apple's rumored innovations in search (such as with the Siri recommendation engine)
• The rise of Bing, in the US, which could lead to the rise of Bing in Nokia - Windows devices
• As I've already written in the hugely popular "Is Android bad for Google", there are legitimate reasons why those with a competing smartphone platform (e.g. iOS) and those carriers seeking to make a quick buck, would ditch Google as the smartphone's default search provider

This article is the beginning of a "Google Inside" branding campaign. Trust me on this one.

That said, the article has some great stuff. But it fails to answer the question I've been asking since Google leapt into mobile search: is the money there?

Literally. Is it even *theoretically* possible for Google to earn as much on smartphone searches, say, as they do on PC search?

If I'm right about smartphones, they will very quickly rocket past PCs in installed base. We use smartphones constantly -- on the go. The real-time, location-aware functions of smartphones would certainly suggest that each individual search would be more crtical and time sensitive than a PC-based search. On this, Google leads. The small screen would suggest that search results would have to be better; no more page upon page of results. Again, Google is the clear leader.

That said, we remain in the early days of smartphone search. Just as Google leapt into the smartphone wars with Android, expect other competitors and upstarts to not cede smartphone advertising the way they did in the age of the PC. This article is really nothing more than Google telling investors -- and users -- that there is no real alternative. Which, if it were so, Google likely would not have bothered working so closely with the paper.

From the Times' 'Google Inside' puff piece:

Searching on a phone was less than ideal. It was hard to type on small screens. And most irritating for Google, which brags about its speed on every page of search results, was that Web pages were slow to load on phones.

So Google started a project it code-named Grand Prix. In six weeks, engineers revamped mobile searching and hatched plans for new ways to search on the go, by talking or taking photos instead of typing.

The stakes were high. Mobile phones could be a huge new market for Google. Or they could provide an opening for a competitor to pounce, or obviate the need for a search engine altogether. If people on phones could go straight to apps for information, why Google anything?

Google has a market share of 97 percent for mobile searches, according to StatCounter, which tracks Web use. Google said in October that mobile ads were on track to generate $1 billion in revenue in the coming year.

Though the search results Google spits out might seem the same on phones as on computers, there are some behind-the-scenes differences. For example, certain search results are ranked differently, with location factored in. Search for Wal-Mart on a computer and Google suspects you are probably looking for the e-commerce site or job openings. Search on a phone and Google assumes you are looking for the nearest store. Other search tools were built specifically for phones. Search for weather or stock prices and Google shows a scale, movable with a finger, to see results for different times.

Google says mobile search is not stealing time from computer searches. Instead, mobile searches spike during the lunch hour and evenings, when people are away from their computers.  

 “Mobile search is definitely going to surpass desktop search,” said Scott B. Huffman, who works on mobile search at Google and leads its search evaluation team. “The lines will pass, and I think they’ll pass before anyone thought they would.”

A 97% market share -- and it's "on track" for $1 billion. Shit, I wouldn't be surprised if Google drops $1 billion on fucking lunch and laundry for its employees. 

And that bullshit about mobile search being additional/incremental activity, not "stealing" time from computer searches. Yeah, don't believe that bullshit. It may be technically true now. But as the world transitions to smartphones, away from PCs, the bulk of searching -- and the bulk of ad spend -- will take place on our smartphones.

I'm moving closer to not recommending $GOOG as a long-time buy. Let's see what they have on the social front by this time next year.