Google says mobile will dwarf the Web; Microsoft could be the loser

One day mobile searches and mobile revenue will far outpace those from the Web, believes Google CEO Eric Schmidt. He doesn't expect that to happen any time soon. But if he's right, the big winner will be Google, and the big loser likely Microsoft.

According to Reuters, Schmidt told the TechCrunch Disrupt conference in San Francisco:

"Eventually we think mobile will be the majority of the searches and the majority of the revenue, but it's a long time."

Key to Google's success on mobile is its development of Android and giving it away to phone makers, because Google is the default search engine, mapping app, email app, and more on Android. So the lion's share of ad revenue comes its way.

Schmidt said at the conference that Google searches on Android devices has more than tripled in the first half of the year. Previously, he said that he sees Android on its way to becoming a $10 billion a year business for Google.

What does all this have to do with Microsoft? At this point, not much, and that's Microsoft's problem. Microsoft's share of mobile has shrunk, while Android has skyrocketed. Microsoft is betting that its Windows Phone 7 launch will put an end to that. Windows Phone 7 devices won't be available for either Verizon or Sprint at launch, though, which doesn't bode well for its success.

Microsoft can try to buy its way onto Android phones and become the default search engine there, as it has already done with the Verizon Samsung Fascinate. But in the long run, that's not a sustainable business model.

The upshot? If Schmidt is right and mobile revenue will eventually outpace Web revenue, Microsoft could be in for a rough time.