"Don't Be Evil" indeed!

Google's corporate motto must be a giant millstone around their necks - I mean, how can anyone have such a motto and still justify the lame way in which they sold out on Network Neutrality.

Just 3 years back, Google was the champion of an open internet - they were willing to bid $4.7B to force wireless spectrum to be truly open - so that Mobile operators would have to allow any devices and any applications on their networks. Back then, Google was the underdog, trying to pry open the wireless networks for their Android OS. However, now that Android is well and truly entrenched, they no longer care about Network Neutrality on wireless.

In addition, Google also realized that the iPhone has completely changed the way people use mobile internet - instead of browser based access, most of the access is through custom applications. These custom applications are that much harder for Google to monetize by way of ads - especially after Apple closed the doors to iOS, and no longer allow non-independent ad vendors from collecting data from iPhones to target ads. Without the ability to collect data, Google's Admob would be unable to display relevant ads on the iPhone, and would therefore would not be as attractive to advertisers.

On the other hand, despite Android sales picking up significantly, the iPhone still commands a significant percentage of mobile wireless access - this is because of the higher current installed base of iPhone, as well as because iPhone still is much better for mobile use because of seamless implementation of Multi-touch. Google could not use pinch-to-zoom and other intuitive gestures, as they were all restricted by Apple patents. So the browsing experience on Android is nowhere near as intuitive and pleasurable as it is on the iPhone.

There is also a lot of talk about iTunes moving into the cloud - and therefore offering a much greater user experience on the iPhone. Google has absolutely nothing to match iTunes, and it is unlikely that they can come up with something soon.

Considering all this, Google realized that its best bet lay in a crippled internet on the wireless side - because the iPhone would be impacted a lot more by the crippled internet than Android would be. iPhone is a lot more data intensive because of its rich media options on iTunes, wider variety of applications, better browsing experience, etc. So a crippled internet would actually work in favor of Google on the wireless front. On the wired internet however, Google is still easily the largest entity on the internet, so it makes sense for them to ensure that the wired internet stays with full Network Neutrality.

It is quite a shameless change of stance by Google - but I still think this is not going to hurt Apple much - if anything, Apple will be further incentivized to monetize iAd even more, so that they can actually pay for the network access needed by the iPhone. Google will realize that the end of Network Neutrality will hurt them even more. And it wont be long before Apple decides to extend iAd to the wired internet as well - on Macs, AppleTV, etc - and when this happens, they will be stepping on some sensitive toes at Google.

I have always felt that Android will be something Google will regret - because Android would end up costing Google its crown jewels. And the more Google plays dirty, the more Steve Jobs will hit back at them.