When the word was out that Google is acquiring the RCS cloud provider Jibe Mobile and committing to add RCS to Android, there was a lot of vibe in the market and speculations. I also provided my prompt thoughts on this.
It is now time to take a closer look at what Jibe RCS cloud offering is all about, why does Google have interest in RCS and what leverage can it bring to them.
Jibe is much more than iMessage
Jibe provides a full suite of communication features that all start from the phone address book. Since presence in the new dial tone, communication starts from seeing users’ presence information and from there engage in 1-to-1 and group chat, voice and video chat and several other features.
Jibe comes as a cloud offering for service providers together with an RCS Hub that connects with other RCS networks and a Telco Web GW for connecting to IMS networks.
This is an open offering that is not device specific. It also caters for developers through its SDKs.
Comparing this to the (Apple centric) closed Apple iMessage and FaceTime services is really not an apple-to-apple comparison.
What does Google find in RCS?
It is no secret that Google makes its money from advertisement and the more they know about us the better (for them).
Google is the elephant in the room when it comes to advertisement but it does have its competitors and when it comes to mobile things get tricky for Google.
We believe our operating margin will experience downward pressure as a result of increasing competition and increased expenditures for many aspects of our business….
In this multi-device world, we generate our advertising revenues increasingly from mobile phones and newer advertising formats, and the margins from the advertising revenues from these sources have generally been lower than those from desktop computers and tablets. Our traffic acquisition cost (TAC) may also be impacted because the rates at which we share mobile revenues with our partners may not be as favorable to us as those with our traditional desktop and tablet formats. We expect both of these trends to continue to pressure our overall margins, particularly if we fail to realize the opportunities presented during the transition to a dynamic multi-screen environment.
Source: Google SEC filing (Dec 2014)
The opposite can be found in Facebook’s reports as mobile advertisement is their growth engine. Facebook has experienced a phenomenal growth from mobile ads.
It is also seeing an increase in ARPU.
Google is taking actions to improve its mobile revenue. The acquisition of Waze might be one.
Adding RCS to Android devices can allow Google to offer a cross device (iOS via App) and cross network rich messaging, voice and video chat, RCS type of service that will compete with WhatsApp of Facebook and allow Google to increase their position in mobile advertisement.
Where do the operators come in play, if at all, is still a wildcard. At the end of the day, Google has its service provider aspirations. We will need to wait and see.