When Verizon met Google

What happens when an unstoppable force meets an immovable object? The mobile industry could solve the age-old paradox if the rumors [1] are to be believed and Google consummates a deal for its gPhone OS with Verizon Wireless. The Wall Street Journal reported this week that the unstoppable web search giant is huddled in negotiations with the immovable wireless operator to offer subscribers handsets based on Google software--by most accounts, the gPhone platform will translate to cheaper devices, with license fees expected to fall substantially below the industry standard.

The laws of physics notwithstanding, Verizon Wireless has resisted the seemingly irresistible before. During last week's CTIA Wireless I.T. and Entertainment event, FierceWireless editor-in-chief Sue Marek and I sat down with Verizon Wireless CEO Lowell McAdam for a far-ranging conversation [2] that quickly and inevitably turned to Apple's iPhone. McAdam expressed no regrets whatsoever on passing up the device: "We've made a $40 billion investment in our network in the last eight years. I don't think that [Apple's proposed] revenue split was commensurate with the investment we made in the network. We are very happy with that decision." And while the iPhone vaulted AT&T to a 64 percent increase [3] in mobile data revenues during the third quarter, Verizon this week reported [4] its own mobile data revenues are up 63.4 percent year-over-year, resulting in $2.0 billion or 20 percent of all service revenues. 

Verizon Wireless didn't bend to Apple's will--what makes Google any different? A far more plausible explanation for the Verizon/Google powwow was advanced by BusinessWeek, which reports [5] the two firms are instead negotiating to feature Google's search tools across the operator's mobile web services. Insiders say the advertising revenue split remains an issue, however, as do branding and placement--Google's brand is its most valuable asset, but Verizon has traditionally favored white-label services, which calls into question just how far either side is willing to bend to make a deal. Logic and semantics suggest it is impossible for the unstoppable force and the immovable object to co-exist--history tells us Google and Verizon will find themselves equally incompatible. - Jason [6]