Peter Kafka

Recent Posts by Peter Kafka

Who Wins The Pre vs iPhone Battle? Google

The Palm Pre (PALM) debuts this week. Next week, we may hear about a big update for Apple’s iPhone (AAPL). And by the end of the summer we’ll have new phones running Android platform.

So who’s going to emerge as the winner? Easy, says analyst Mark Mahaney: It’s Google (GOOG).

But Mahaney, Citigroup’s (C) longtime Internet guy, isn’t talking about Google’s smartphone platform. He’s talking about Google’s core search business, which he thinks is finally about to see significant lift from mobile users.

It’s a straightforward thesis: As more people use smartphones, which are essentially portable computers that happen to make phone calls, they’ll start using them to do the things that people do with conventional computers — like search.

Our simple point here is that Mobile Internet usage, Mobile Search usage, and Mobile Google Search usage are all likely to be derivative beneficiaries of the “Smartphone Summer.” The So-What here is that Mobile Internet is beginning to emerge as a material Secular Growth driver for GOOG.  And getting back to the basic Core drivers of Google’s financial model, we believe this will show up in the form of consistently robust Paid Click growth in 2010 and beyond.

Want to see actual numbers before you buy into this? Fair enough: Google, like a lot of its peers, has been making a lot of noise about mobile with little to show for it so far. But if it is able to deliver, then the company may finally have that second business it’s always pined for.