Futurists suggest that the real long-term play is around the browser and the applications that will run on the mobile platform (Android from a Google perspective).
Google has made little secret about attempting to dominate the mobile advertising space. According to Eric Schmidt “It’s the recreation of the Internet, it’s the recreation of the PC story, and it is before us — and it is very likely it will happen in the next year.” He postulates that Mobile advertising is nearing its tipping point because of features such as location-based advertising
While mobile is an immature and nascent market with limited advertising revenues today, Google is more bullish than most. Google fully understands it must set a strategy to dominate this platform. It took years for Microsoft to even recognize that it should be focusing on the Internet - and even after realizing where they should place their energies they were not particularly successful.
Now the chess board is being reset. Google has dominance in search, it has the largest ad serving platform utilizing both the premium Double Click Service as well as the Google Ad Manger, it can push ads via multiple mediums. Its got an open source browser that can be online and mobile based, it's building an analytics platform than can measure engagement and ROI - targeting ads to users' contextual experiences. Google is looking to ads in mobile search and location based service, in mobile video, in mobile applications and on mobile internet pages.
Building both online and mobile OSs and browsers, Google is aiming at squarely at Windows Desktop and Windows Mobile OS, IE, Microsoft Office, Live Search, Atlas Ad Serving, Microsoft Ad Center, Hotmail...............
Google will rightly argue that it's all about the user experience - that's the starting point - then it's all about the ad revenue.