Google's Newspaper Ads: Big Hopes For Small Barcodes (GOOG)

Google's efforts to get into the newspaper ad business have yet to yield much. One tool it hopes will eventually change that: Small, square barcodes, like the one at the right, at the bottom of print ads. When a person scans the barcode with a compatible camera phone, it takes their phone's browser to a mobile Web address encrypted in the graphic.

What's the point? This has three benefits: First, it saves the reader the trouble of typing in a Web address into their phone -- an annoying process for the majority of wireless subscribers that don't have phones with QWERTY keypads. Second, it can take the reader to a very specific page, based on an individual ad -- like a coupon or a map to the advertiser's store. And third, it ties into Google's analytics tools, so advertisers can get a very specific sense of which ads work and which don't, when people are viewing them, where they're standing (GPS), etc.

These barcodes are big in Japan -- we were there last December, and saw them everywhere. A Google exec presenting at a NY Advertising Club meetup the search company hosted Monday night said the barcode software's penetration is about 10% right now in the U.S. We're told that's a liberal estimate -- a mobile marketing exec we talked to at the meeting said he'd be surprised if the software is set up on even 1% of phones in the U.S.

Either way, there are big hurdles before the barcodes catch on here. The biggest: Getting the four biggest mobile carriers, which sell the vast majority of cellphones in the U.S., on board.

First, Google, carriers like AT&T and Verizon Wireless, and phone manufacturers like Motorola and Samsung need to figure out how to split up the revenue pie. Second, they have to get the software on enough phones to be relevant. And third, they have to convince advertisers that people know what the barcodes are for, so they don't get confused.

Some of Google's (GOOG) problems will be solved as it rolls out Android, its mobile operating system, later this year -- Google can put pretty much whatever software it wants on those phones. But there are 240+ million wireless subscribers right now in the U.S., and none of them runs Android. Google has its work cut out.

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