Google Inc (GOOG)’s Mobile Mess In China Has US Repercussions

Apple Inc. (NASDAQ:AAPL)‘s  Siri voice assistant provides hands-free search on the company’s iPhone. But more importantly, Siri decides what search engine or app is used to fulfill a search request. One of the more notable announcements at the recent Apple’s WWDC was that Microsoft Corporation (NASDAQ:MSFT)‘s Bing will be the default search engine for Siri in iOS 7, to be released this fall. The terms of Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT)’s agreement aren’t known, but it is clear that Apple hopes to loosen Google’s current monopoly on mobile search.

Siri search requests for navigation also default to Apple Maps. Because mapping provides a great way to serve mobile advertising, Apple now has the opportunity to expand its iAd service into local businesses. Whether the company’s efforts can overcome initial consumer backlash over Apple Maps, however, remains to be seen.

As a leading aggregator of local business reviews, Yelp Inc (NYSE:YELP) sells advertising alongside its information and recommendations for restaurants, hotels, bars and nightclubs. A partnership with Apple makes Yelp Inc (NYSE:YELP) the default search engine for all entertainment- related searches on Siri. Yelp Inc (NYSE:YELP)s’ review information attached to Apple Inc. (NASDAQ:AAPL)’s mapping app, provides a seamless solution for business search, selection and directions — and a great platform for generating mobile ad revenues.

Samsung Electronics Co., Ltd. (KRX:005930) recently announced its first developers conference to be held in San Francisco. As the leading Android OEM, the South Korean company has a clear incentives to use its market dominance, like Apple, to capture a share of mobile search revenue. While information on Samsung Electronics Co., Ltd. (KRX:005930)’s mobile search plans is lacking, Google investors would be wise to follow the news coming out of Samsung Electronics Co., Ltd. (KRX:005930)’s developer conference carefully.

The Foolish Bottom Line

With an 82% share of US mobile search, Google stands to be the primary beneficiary of the rapid growth in mobile search and advertising. However, the lessons from China provide insight into the risks in mobile search that are faced by the Gorilla of Mountain View. Foolish investors holding Google stock need to track any inroads being made by OEMs and app developers to encroach upon Google’s mobile search share.

Bill Shamblin owns shares of Yelp, Apple, and Google. The Motley Fool recommends Apple, Baidu, Facebook, and Google. The Motley Fool owns shares of Apple, Baidu, Facebook, and Google. Bill is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Google’s Mobile Mess In China Has US Repercussions originally appeared on Fool.com is written by Bill Shamblin.

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