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Monday, April 11, 2011


Google scores in two reports from analysts

By Mike Swift

Thursday was an auspicious day for Google (GOOG) in the heated battle with its biggest rivals, Apple (AAPL) and Facebook.

Two reports from analysts released Thursday said Google is faring well on two different technology fronts with those competitors.

Google's Android software will dominate the world's smartphone market by the end of the this year, leaving Apple's iOS, the operating system that powers the iPhone, a distant third by 2015, the market research firm Gartner said in a report issued Thursday. Meanwhile, the research firm Forrester said that its research shows that Facebook, despite the large number of brands that use the social network to communicate with their customers, is not driving actual e-commerce retail sales.

The Gartner report estimated that by the start of 2012, 49 percent of the smartphones sold in the world will be running Google's Android operating system, up from 23 percent at the start of 2010. Apple's iOS will peak this year at about 19 percent of smartphone sales, before dropping to 17.2 percent at the start of 2015, the report concluded. That will leave iOS in third place behind Android and the Microsoft-Nokia smartphone partnership, which will have 19.5 percent of the market by 2015, Gartner said.

Google did not immediately respond to requests for comment.

The Forrester report said that despite the buzz around social media driving retail transactions, search advertising will continue to push e-commerce sales. "The ability of the social network to drive revenue for eCommerce businesses continues to remain elusive," the report concluded. "Could Facebook be retail's 'Next Google'? Not likely."

"We're still waiting for this big payoff, and we have't seen it. There are hundreds of thousands of (software) developers trying to take a crack at this. When is it going to pay off?" said Sucharita Mulpuru, who wrote the report for Forrester.

Forrester interviewed 24 e-commerce companies to reach its conclusions. Mulpuru said that less than 1 percent of actual transactions are the result of information shared through Facebook. "A bunch of people are sharing, but nobody is converting -- for most products," Mulpuru said.

Mulpuru said Facebook declined to be interviewed for her report, and the social network declined to comment Thursday to the Mercury News. Still, the report may spark a significant debate about the future of social media as a source of commerce, and it may be some time before the outcome is known. There was initial skepticism about the power of social gaming, but companies like Zynga and other gaming companies now have more than 200 million people playing games each month on Facebook.

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