Where’s the money in Google’s new addition to Mobile Maps?

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Most interesting comments from Markus Goebel’s website concerning Google’s new location service for Google Mobile Maps. The first thing to note is that it doesn’t rely on GPS, but on location information provided by operators’ base stations. Apparently while it’s not as accurate as GPS overall, it works pretty well in urban areas where there is a high density of base stations.

The second thing that smacks you in the eye is how Google is going to make any money out of this? Markus points out that the operators charge third parties EUR 0.10 in Germany for every piece of location information and indeed there is a company called Qiro that has been offering a service there for some time based on it: Qiro allows users to locate friends, ATMs, train stations, Burger Kings and other places. Unlike Google, it incorporates banner advertising, with cost per thousand (CPMs) of between EUR 3 and EUR 150.

To quote Markus verbatim,

“Qiro needs a razor sharp calculation to earn the money back for the localization and still make a margin.How does Google do it?

We don’t know either, but incorporating advertising has to be the next step. The upside is that, unlike almost everyone else, Google isn’t under terrific pressure to make money fast and can experiment to tune the service perfectly. The downside is that it has failed to hit the right note in mobile so far and doesn’t seem to learn from mistakes very quickly.

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