Google (GOOGL 9.99%) and its Android OS have long championed near field communication, or NFC, chips as a means for device-to-device communication. Google envisioned its use in mobile payments and sending data (like contact information) to other phones, among other things. So far, it hasn't caught on as much as Google anticipated.
Instead, a new technology, Bluetooth Low Energy, or BLE, is beginning to gain traction as Apple (AAPL 0.31%) has backed the technology with its recent introduction of the iBeacon. BLE is superior to NFC in that it's less expensive to implement and works over longer distances, which can be better calibrated than NFC.
There are three main reasons Google ought to throw some more weight behind the Bluetooth beacon trend.
1. Google's presence on smartphones
Google has a huge presence on smartphones already. Its apps are available across Android, iOS, and Windows Phones. Over 500 million users have installed its Search app for Android. Simply put, if you have a smartphone, you're probably connected to Google.
That said, if a company wanted to transmit a message to a smartphone, Google has the built-in advantage of being omnipresent. It wouldn't require a new app install just to push messages to people's phones. The app is already there -- Google Search.
Google could build beacon messages into its location-aware Google Now service, which provides users with information they probably want before they even know they want it. It could provide beacon owners with a back-end that allows them to add cards to Google Now's interface such as advertisements for nearby items.
This leads me to how Google can capitalize on Bluetooth beacons.
2. Google is good with advertising
Google is pretty good at targeting ads to its users. With the amount of information Google has on its users, it can better enable beacon owners to target their promotions and notifications.
This could help Google overcome its struggles with mobile search advertising. Partnering with retailers for hyper-location aware ads that are customized to a shoppers interests ought to have a high conversion rate, and thus demand a higher price.
This could be a retailers answer to showrooming. Google knows what you've been shopping for online. A person walking into Best Buy, for example, having just looked at similar products to those in his vicinity on Amazon.com, is likely just there to browse. But if Google can send him a notification that Best Buy will match the price he saw online, and he can take the product home today, there's a good chance the customer will walk out of the store with a new gadget in hand.
3. It could benefit Google's Wallet product
eBay (EBAY 1.04%) was an early adopter of the Bluetooth beacon technology, releasing its PayPal beacon back in September. Its goal was to increase PayPal's presence in stores by giving customers a frictionless checkout experience. The only thing required for a purchase is voice confirmation.
Google, too, has a digital payment platform it calls Google Wallet. The company has struggled to popularize the product, partly due to its reliance on NFC. Google could easily add support for BLE, which will help it compete with PayPal and others in the mobile payments market.
Google Wallet could appeal to retailers as an alternative to PayPal and other competitors, because Google does not charge a transaction fee. Instead, like everything Google does, it collects data on its users' behavior to better target advertisements. Of course, Google would need to appeal to customers first. Overcoming PayPal's brand recognition is certainly difficult, but not impossible.
This is right in Google's wheelhouse
I'm a bit surprised Google didn't adopt BLE support earlier. It's only supported by Android 4.3 and later. Moreover, the technology is cheap to make and proliferate. Qualcomm is making its own Bluetooth beacons available for as little as $5.
Google, with its widespread use, could easily capitalize on the proliferation of Bluetooth beacons. It's just a matter of it making effective partnerships with retailers.
