Why Google Is a Rule Maker

Most would probably call it a fairly ho-hum announcement. T-Mobile, the mobile service arm of Germany's Deutsche Telekom (NYSE:DT), hardly made headlines when it agreed to make Google's (NASDAQ:GOOG) home page the starting point for Web surfing on its customers' smartphones. Much of the coverage pointed instead to T-Mobile's decision to open up the entire Web to mobile browsers. But I see it differently. I think the deal illuminates exactly why Google is a Rule Maker.

What's a Rule Maker, you ask? It's a company whose dominance in an industry is so pervasive that customers and partners seek it out above all others. Past examples have been Microsoft (NASDAQ:MSFT) and Intel (NASDAQ:INTC). They may still be, though certainly some of their authority has been eroded by tough competition from Apple (NASDAQ:AAPL) and Advanced Micro Devices (NYSE:AMD) in recent times.

Of course, Google has Yahoo! (NASDAQ:YHOO), which is no slouch. But listen to T-Mobile board member Ullli Gritzuhn, as quoted by Reuters: "With the Google home page, we want to tell our customers from the first moment that they are carrying with them the Internet they know from home."

What a stunning statement. It implies that Google is the preferred home page for billions around the globe. Not that the numbers bear this out, mind you. According to Alexa Internet, which tracks the top 500 global Web sites by traffic, Google is third, trailing Yahoo! and MSN. Still, perception often mirrors reality, even if that reality has yet to be, uh, realized.

Yeah, I know Yahoo! has been king of the Web for years. But it's becoming increasingly clear that Google is about to bring those days to an end. Witness AdSense, which has contributed hugely to the company's profits through a massive third-party network. Add in the phenomenally successful Gmail. Oh, and did I mention Googling has become a verb? Now, apparently, we can add "synonym for the entire Internet" to the list. No wonder the stock trades for nearly $300 per share as of this writing. That's the kind of royal treatment only a genuine Rule Maker deserves.

For related Foolishness:

• Did you think Google would turn to the Dark Side?
• Ever wondered whether Google is a Rule Breaker? Me too.
• Google's a one-hit wonder. Yeah, so what?

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Fool contributor Tim Beyers Googles daily. But he's a happy Yahooligan, too. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what's in his portfolio by checking Tim's Fool profile, which is here. The Motley Fool has a disclosure policy.