[MoMoBangalore] Google SMS business model

Banibrata Dutta
Mon Mar 2 11:18:15 IST 2009

On Sun, Mar 1, 2009 at 11:49 PM, Nandu Madhava nandu01 at gmail.com> wrote:

>  Anoop – thanks for posting your questions, as we’ve been debating this
> among friends lately.
> I highly recommend reading Google’s Terms of Service for SMS services (it’s
> about 4 pages of small font legal wording). In a nutshell, Google retains
> all rights to advertise over the content – no matter if it is
> Google-published or user generated.
> I’d challenge Banibrata’s thoughts that a tie-up with each carrier has been
> arranged. Consider this: does Google pay Comcast, Deutsche Telecom, Airtel,
> or any broadband provider in the world a portion of revenue from Web search
> adverting?
I doubt that Google is forced in anyway to adopt the same strategy in Indian
context, compared to what it does globally. The US telecom (& consumer
datacomm) scene is quite different from the Indian scene. There is ample
unbundling, deregulation, provisions for over-the-top VAS, more reasonable &
mature revenue-sharing arrangements, and VAS provider protoction, although
it is a different matter, that the variety/richness in terms of VAS
offerings is probably not as much as elsewhere, especially when it comes to
SMS based.

"Standard SMS" rates, IMHO means --
1) Not premium rate
2) National or Roaming rates apply, as per usage situation

*Usually*, it means an over-the-top VAS, where the service-provider is not
making any money from it directly (s.a. by revenue share), but is simply
giving all business to Telcos. Given that "Telco portal" (walled gardens)
have failed miserably, I think there's any strong reason for Telcos to feel
threatend about this, and do anything nasty against Google. Also, it's easy
to pick a fight with a puny little startup, versus the cookie monster.
Indeed, stealing (what was probably never owned-by, in the first place) away
ad-revenue share from Telcos, is something that could be seen as a threat,
atleast strategically, but like I said earlier, there is nothing that
negotiations cannot take care of.

>   Nope. And I think Indian mobile carriers are headed to a showdown with
> VAS providers. Consider that MyToday was blocked by Vodafone…will Vodafone
> India block Google also if Google reaches several million users?  I
> certainly don’t except Google to start sharing mobile ad revenue with
> carriers (regardless if it is WAP or SMS-based advertising) because that
> sets a dangerous precedent for their business across the globe.
> I think the rumbling has already started among consumers, and I expect that
> Indian mobile operators will have to start opening their networks.
> Best,
> Nandu
>  ------------------------------
> *From:* bangalore-bounces at mobilemonday.in [mailto:
> bangalore-bounces at mobilemonday.in] *On Behalf Of *Banibrata Dutta
> *Sent:* Sunday, March 01, 2009 8:02 PM
> *To:* MoMo Bangalore
> *Cc:* momoindia at yahoogroups.com
> *Subject:* Re: [MoMoBangalore] Google SMS business model
> On Sun, Mar 1, 2009 at 3:07 PM, Anoop Mishra mishra.anoop at gmail.com>
> wrote:
> Hello Friends,
> Greetings!!
> I need little information from MoMo Fraternity. I would like to understand
> about the Google SMS business model. It would be great if you help me in
> Google SMS business model understanding. I have few specific query/doubt.
> 1.       Which Mobile operator owns Google SMS number *9-77-33-00000*?  Is
> it AirTel, Vodafone or else?
> If this URL
> http://en.wikipedia.org/wiki/Mobile_telephone_numbering_in_India http://en.wikipedia.org/wiki/Mobile_telephone_numbering_in_India>
> is to be believed, then that no. is hosted by BPL Mobile, in Mumbai.
>  2.       On Google SMS webpage, it says that standard SMS charge applies
> for sending the message. Is it Local/National SMS charges which varies from
> operator to operator or Uniform SMS charges across mobile operator (let say
> 1 Rs. per SMS, irrespective of Mobile operators plan and geography)?
>  "Standard SMS charge" is an ambiguous term for sure, but it could very
> well mean Re.1/- or standard local SMS rate. Note that there are a very
> large no. of tariff plans, where National SMS (except while Roaming) is
> Re.1/-. Also, given Google's deep pockets, negotiating power, strategic
> clout, it is not impossible for them to "Negotiate" a national flat rate.
> After-all they are giving business to mobile operators, and also they are
> strategic partners with most large mobile operators in India anyhow.
>  3.       Few Mobile operator offer limited free SMS services in their
> plan. How Google SMS, charge its services from the user free SMS account?
>  Are you alluding to Google doing a "revenue share" with operators,
> getting a %age for the Re.1 local SMS tariff that Operator charge ? I am
> doubtful of that. If that's not the case, the SMS to Google service should
> count as any SMS. Why would it be any different ?
>  4.       Let say AirTel owns Google SMS number. If user from small town
> (say Idea-Gwalior) sends a query as an SMS to Google SMS, then how revenue
> sharing is happening between Idea and AirTel mobile operator? May be some
> other business model, if yes, then what is there business model?
>  Google, I presume would make money from advertisements that they'd
> eventually insert in the search results. They don't do it today (I think),
> but nothing stops them from doing so in future. So  I don't think the
> business model is based on revenue-sharing, but then again, nothing stops
> such an arrangement from being worked out. Revenue share is generally a
> fixed, or variable (policy-based) percentage.
>  May be some of my query are irrelevant please correct me. Please help me
> in understanding Google SMS business model concept.
> One thing that is unlikely is that Google is offering this service
> "over-the-top", even though may be no revenue-sharing, i.e. without a
> strategic arrangement/agreement with the operator(s). Check out this months
> V&D, it has some interesting articles on this aspect.
> --
> regards,
> Banibrata
> http://www.linkedin.com/in/bdutta
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