Cutting Google Out Of Mobile

Two diametrically different companies — Fortune 100 IT vendor HP, and tiny Norwegian browser company Opera – have separately demonstrated how a subtle but important shift in the technology landscape could eat into the fabric of Google’s revenue tapestry.

According to HP’s Billy Hoffman, who described to me the research he’s going to present at the Black Hat conference in July, HTML 5 can be used to support temporary peer-to-peer networks running within browsers that exist only as long as those browsers are open. HTML 5 is key because it runs Javascript “orders of magnitude” more quickly, and improves memory allocation on devices, all of which means that multiple users can communicate and share documents without their files or conversations ever touching a physical server. While HP is still experimenting with this capability, Opera recently announced Opera Unite, a browser-based file-sharing application which Hoffman said “looks very interesting.”

The new developments foreshadow a way for users to keep their collaboration and documents off the cloud and out of Google’s organizing grasp. Google wants to federate everything — organize all the world’s information — and then set it free, to the chagrin of entrenched software vendors, voice carriers, and customers concerned with their privacy. Google Voice (formerly Grand Central), email, chat and collaboration tools are all offered free so that Google can organize and analyze the data they contain, which in turn helps it develop better intelligence, refine its algorithms, create better search results — and thus more searches on, and more revenue for, Google. (The only thing that isn’t free in Google-land is ads.)

Fragmentation, the embodiment of chaos, can become a friend to customers who want to keep their data off Google’s servers without necessarily running software. It also opens the door for carriers like Verizon to charge customers for enhanced peer-to-peer services using new technologies like femtocells, which amplify the signals of next-generation wireless networks like LTE and WiMAX inside buildings. And who doubts that Verizon, AT&T and other carriers wouldn’t like to turn the tables on Google after it dared to bid on wireless spectrum, thereby challenging them on their own turf?

Mobile technology consultant Ajit Jaokar noted that “if a decentralized peer-to-peer architecture takes off, then Google cannot match it because it is not in Google’s DNA to do so — just as the Web was never in Micosoft’s DNA.” Jaokar told me that “femtocells are the anti-cloud,” giving mobile operators an opportunity to turn the tables on Google by undermining its strength as a consolidator of data.

If an Operator were to really think like Sun Tzu (strategic and disruptive) they could have a unique competitive advantage… It is hard to sell capabilities of networks themselves (or for that matter to charge for networks). However, operators can sell services. Customers understand services. They are used to paying for them.

So as customers increasingly adopt ever-more-powerful hand-held computing devices for both work and entertainment purposes, wireless carriers could take advantage of technologies promoted by Google itself, like HTML 5, to create new services (and thus revenue streams) at Google’s expense. From their perspective, it’s hard to imagine anything better.