Google gives up its fight with the carriers... for now

May 20, 2010: 8:30 PM ET

Google signaled an end to its ambitions to bypass the carriers with its announcement that it would discontinue the Nexus One Store last month.

Andy Rubin, VP of Google Engineering, second from left.

In a media Q&A session today, Google's Android leadership told the press audience that they had given up on having an independent Android store because they wanted to focus on working with the carrier partners. The move was likely fueled by the lackluster sales of the Nexus One handset, which Google tried to sell independently and obvious pressure from the carriers.

A major technology innovation may bring Google back to independent Android sales. Google has been working on a VoIP project with its acquisition of Gizmo5 last year and it may move to give its customers a way around the carrier monopoly on overpriced voice plans.

Google clearly wants to get into Skype's VoIP field and already has phone number routing services provided by its Grand Central acquisition/Google Voice product.  But would Google bring these products to mobile?  Recent purchases of companies who optimize voice and sound over latency-ridden mobile networks indicate that Google is leaning in that direction.

Google could provide Android handsets with its integrated Google Voice+Gizmo VoIP without a carrier needed and really bring freedom to US wireless customers.  At that point, Google users would have full number portability and could get the data needed to power their VoIP apps from any of the carriers through data-only plans.  Customers could then pit the carriers against each other.  Some users could even skip a data service and use Wifi if they are around Wifi often enough.

That reality could force the mobile carriers to give up their exclusivity agreements, their two-year plans with exorbitant opt out fees and their costly voice/sms plans -- which is a huge win for consumers.

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Seth Weintraub
Seth Weintraub

Google went from searching the Web to worming its way into nearly every facet of business and government. Seth Weintraub unveils where the company is going, who it's competing with, who it's about to compete with and how market forces push the company to veer or adhere to its Don't Be Evil motto. For 15 years, Weintraub was a global IT director for a number of companies before becoming a blogger.

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