Google Made a Phone! What hasn't Google done in the last few years? It seems like this company has penetrated all segments of our lives. We Google everything and we rely on Google for directions, news, and even communication. However, most of us who use a smartphone are undoubtedly wondering if the Google Nexus is the "iPhone killer" that some people tout it to be.

To start, Google likes to make their entrances big, and the Google Nexus is no exception. Not being satisfied with the already hefty moniker of "smartphone," Google decided to name their newest creation a "Super Phone."  This Super Phone sports a fast processor, a large bright screen, a trackball, and comes with features such as noise cancelling calls, voice to text, and GPS functionality. So far, it seems like it took what the iPhone has done and added a bit to it, so it doesn't really seem like an iPhone killer per se. However, the answer may not be all that simple. I think that the reason that Google is putting so much weight on the Nexus phone is not because they are vying to unseat Apple as the king of Smartphones, but in order to spread their own operating system, Android.

Android is an open source platform, which is in stark contrast to Apple's software, which has always been closed source and closely controlled. Android on the other hand allows any developer to tinker with it and improve on it, making it more democratic. Google is not charging any money for the Android, but is charging quite a bit for the Nexus phone, $179 for a two-year contract through T-Mobile, or a $529 unlocked model directly from Google. Why would Google give the operating system out for free to cell phone makers, and sell a phone to consumers if their end goal is not to become a player in the cell phone headset market? The answer is simple: advertisement!

So far, Google has placed ads on search engines, contextual advertising networks, affiliate websites, blogs, video sharing sites, and a slew of other web sites. These ads are no pocket change for Google, but are their main source of revenue. It is therefore not a surprise why Google spent $3.1 billion on DoubleClick, a company that provides Internet ad services. However, Google doesn't want to stop there. Many analysts predict that in the next decade the biggest growth in Internet will be from mobile users, and Google wants to be the top player in that realm as well.

According to Andy Rubin, vice president of engineering for Android, Google's primary goal is advertising and they want to create a phone that will attract a lot of buzz to the Android operating system, and thus transfer their advertising model to a mobile platform. In a way, one can look at the Nexus phone as a $529 billboard that a user has agreed to look at on a daily basis. However, like I said before, Google's main goal is not really to sell phones, but to sell ads. According to Google, there are now more than 20 Android devices on 59 carriers in 48 countries in addition to the Nexus and more are on their way. By popularizing Android, Google will be able to control the mobile ad market. In order to accomplish that end, Google has recently acquired AdMob, a mobile advertising company for $750 million.

So it seems that the Nexus is not an iPhone killer after all, but merely a delivery platform for ads in the future. However, it seems to be becoming Apple's rival. While Apple is known as a phone, music player, and computer software and hardware company, they have recently entered into the advertisement business. Apple announced, on the same day that the Nexus came out, that they were acquiring Quattro Wireless, a mobile advertising company for $275 million. If this doesn't seem like a direct attack at Google, I don't know what is. It's hard to tell where Apple and Google will be competing in the future, but Apple has recently applied for a number of advertisement related patents, and one can guess that coupled with their acquisition of Quattro, it has something to do with advertising and cell phones.

There is, however, one business that Apple has been in for some time, and that is the Apple Store. It is very possible that Google will be jumping on the Apple Store model as well with the numerous Android based Apps because that model could place even more advertisement in front of people, and thus bring more money for Google. They will be essentially making money for services and applications that other people make, by delivering advertisements through them, a business model that Google has perfected over the last few years.

It seems therefore that Nexus is not an iPhone killer, but merely a stepping stone for Google to enter the mobile web advertisement market. Google likes to think big and plan ahead. A lot of people were dumfounded when Google bought YouTube in 2006 for $1.5 billion, but I doubt anyone now thinks that was a bad decision. In 2008 alone, YouTube made over half a billion dollars in revenue. By the same token, the Nexus could become a vehicle for Google to deliver ads to mobile users, and in the process, rake in extra billions of dollars in advertisement revenue.