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In many ways, online ads make the internet go around. Of the many services brought to you that are free at point of delivery, most are funded by their advertising revenue.

Well now, some mobile carriers are threatening to pull the plug on mobile ads- and they hope Google will sit up and take notice.

 

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Google are said to rake in around 55% of worldwide search-based ad revenues. In 2014, eMarketer research told us that Google had made $38.42 billion (£24.72 billion) in ad revenue via their search engine. Total ad revenue amounted to $59.6 billion (£38.35 billion), a figure that grew 17% on the previous year. Given their total revenue stream for 2014 was just over $65 billion, it makes up a significant chunk of the online juggernaut that is Google and its many technological facets.

 

google mobile

 

Certain arms of the tech industry are frustrated by Google’s control over the ad market, and now they’re looking to force through a shift in the way funds are distributed. First reported in the Financial Times, an unnamed mobile carrier is considering blocking ads from their user’s mobiles in the hope it will force Google around the negotiating table.

As to how to go about it, a couple of potential methods have been outed. The most likely appears to be an opt-in AdBlock service in a similar vein to what we see on desktop browsers today. The European carrier is said to have installed ad-blocking technology developed by Israeli start-up Shine onto their network. All that remains is to flick the switch, which could occur before the end of the year. An announcement is expected from a major mobile carrier in the coming months with regards to blocking ads on their network.

Also being considered is more a drastic and forceful action, whereby an entire block will be implemented across all its subscribers, bypassing any consumer choice in the process. It’s believed that a one-hour daily hiatus would be enough to see Google buckle and sit themselves around the negotiating table.

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This latest twist comes amid an endless row between Internet Service Providers (ISPs) and companies like Google that offer services over the internet. Essentially, Google believe they are free to conduct themselves as they wish when harnessing the infrastructure of networks owned and maintained by these ISPs. If that includes harvesting billions of dollars via mobile advertising, so be it. That is unless you sympathise with the ISP position. They believe they should be compensated by Google (and the many other companies who enjoy similar success) for the role their networks play in generating substantial profit. This latest move, undertaken by a carrier which is said to hold tens of millions of subscribers, is indicative of a constant tug-of-war.

 

Google vs The Internet

A number of immediate issues spring to mind when considering the dangers of such a provocative move. One of which is net neutrality. Built on principles of fairness and equality, Internet Service Providers are meant to treat all online content justly and uniformly, offering no preferences based on source. That Shine’s software will not block out all online ads (it won’t block and ads from Facebook or Twitter from example) throws the whole concept into question.

That’s without considering the potential damage a number of sites could be dealt should their ads suddenly be blocked from consumer view. As mentioned in the opening paragraph, content-based sites and free online services rely on their ad-revenue to function profitably. Removing this cash flow hampers these sites in their efforts to provide the content their users love. Something Google mentioned in their reply to the FT’s original story:

“People pay for mobile internet packages so they can access the apps, video streaming, webmail and other services they love, many of which are funded by ads.”

Regardless of issues of morality, how might Google respond to such an obvious attempt at bullying them into sharing an ever more prosperous pie? As can be seen from the figures above, Google relies heavily on their ad-revenue to fund the multiple branches of their tech conglomerate. Converting this initial threat to actual negotiation will not come easy.

What are your thoughts on this controversial move? Are mobile carriers right in taking matters into their own hands, correct in their monetary demands for use of their networks? Or should Google, in spite of all their questionable practices, stand their ground?  Let us know in the comments below.

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13 COMMENTS

  1. Correct me if I’m wrong but everyone who uses the internet pays a network provider for the privelige? Sounds like the networks are being greedy to me. How long before Google start their own or buy out one of the existing players?

  2. It sounds to me like the ISPs want their cake and eat it. I pay my ISP for my 4G data access from my phone. If my ISP prevents sites I subscribe to from providing ad funded content to me for free, and I then have to start paying a fee to receive that content, is my ISP going to reduce my data charges to compensate? The ISPs should stick to bring the carrier and charge for those services. If they want to get into the ad business then they should do so, but not by muscling in on Google’s (our any others) action. That sounds very much like blackmail to me!

  3. The mobile operators are the pot calling the kettle black.

    When you buy a mobile, what do you get? A phone stuffed full of crapware, that unless you’re prepared to root with the risks that entails, are lumbered with their own never ending rubbish.

    They’re hardly in a position to criticise Google for doing the same thing.

    This could backfire on them big time!

  4. As others have said, subscribers pay their ISP for internet access (mobile or at home doesn’t matter). That’s it. They have no justification for wanting a share of every profit made over their network. Next thing they want a percentage of every ebay or Amazon sale?

  5. The great irony of all this is I can’t go and read the source article on ft.com because it’s behind a paywall, much like all content on the web will soon be should greedy networks follow through on their apparent money grabbing blackmail threat. Google should stand up for themselves and tell these leeches where to stick it, like it or not advertising funds the servers, the developers and the content creators that make the web what it is and without that revenue anything worth reading will soon disappear behind paywalls like the FT’s!

  6. Another point which isn’t covered here is the bandwidth involved in shipping ad content to mobile devices – especially video. The providers are paying for this (and then passing it on to the end user). I for one wouldn’t be unhappy to see video ads blocked – I can’t be the only person who’s had their phone on silent, gone to a news site and suddenly had a video start blaring out sound and music…

  7. If this does happen I can see the said network very quickly becoming the target of a hostile takeover, Google will just buy control of their network and then do what they want! And if they do then they will probably start buying others too.

  8. It seems to me that if the services (gmail, youtube, search even…) were to be unusable, whether incidentally as part of the ad-blocking or “accidently” by google for having their ads-blocked, then people would vote with their feet and move to another network. Sounds like a bit of an own goal on the ISP part to me.

  9. I pay my ISP for X GB of data per month, why does it matter what that data is or what i pay for that data? ive already paid the ISP for it, so they should back off.

    On the flip side I hate adverts, a lot, so i block them, if i like something i pay, if i think its too expensive for what it is, ill pirate it. so blocking ads im all for.

  10. Thealchemyst….i think you are very correct here,if google go to the table they will have a missle launcher under the desk..!!! …..you don’t get to be one of the biggest company’s in the world by taking one for the team….this is a bad idea even microsoft are not that obvious with there duel with google..buisness cold war is one thing but a full decloration of war is not a smart move at all…

  11. There are too many adverts and the option to block those we find intrusive such as the yahoo email page adverts which appear before the user emails should be block able.

  12. Subscription based networks are greedy and should not be allowed to block Google or any ads,It should be upto the consumer what gets blocked.
    If networks where to offer completely free Internet access over the cellular network then I wouldn’t have a problem with them blocking adverts.
    P’s I think if your network chooses to block advertising without your permission you anyone should be allowed to cancel their contract without penalty charges and any pay as you go customers should be allowed to get a cash refund on any credit remaining plus get their handset unlocked free of charge.

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