Google faces uphill climb forging wireless deals

Google's wireless plans are coming into focus, but it will face a big hurdle: Convincing wireless carriers that it is a partner and not a foe.

The Wall Street Journal reports today that Google is approaching numerous wireless carriers like T-Mobile and Verizon Wireless with prototype handsets embedded with its search engine, email and mobile browser. The Journal story is similar to a story Tuesday from News.com.

The challenge for Google is this: It wants Google wireless phones to get search advertising. Wireless carriers want more services to sell data plans. In theory this is a win-win.

That theory falls apart pretty quickly though as wireless carriers realize Google isn't going to share much of its search bounty--a point highlighted by the Journal.

Meanwhile, it doesn't help that Google is forcing the open access issue with the FCC for the 700 Mhz wireless spectrum auction.

If I'm a big wireless carrier I'm thinking the following:

• Google is encroaching on my turf.
• Google is raising the bids for this spectrum auction, which means I have to pay more.
• Now Google is trying to hijack any incremental revenue I may have.
• I spent billions to build this network dammit.
• I like my walled garden.
• Maybe I'll partner with Yahoo, which has nice mobile search offering now, instead.

For instance, the Journal reports that Verizon Wireless won't integrate Google tightly because it wants a big share of the search revenue.

For Google to be successful it's going to have to bridge fear with greed--a revenue share that may entice carriers. Wireless carriers, however, have the control since they own the distribution points. That's why Google is yapping for open wireless access so much.

I don't doubt that Google's mobile software in development will be interesting. The big question is whether the masses will get to see these applications any time soon. Google is hoping many carriers will embed its software. Initially, that will be a tough sell.