Google turns Nexus One strategy upside down

This story was updated at 10:36 a.m. PDT with additional information.

Google announced big changes in its Nexus One strategy Friday: it's moving from online to retail.

Google's Andy Rubin, head of the company's Android efforts, announced the changes in a blog post. Google plans to stop selling the Nexus One through its Web store as it increases the availability of the device in retail channels, as it has done recently in the U.K. through Vodafone.

"While the global adoption of the Android platform has exceeded our expectations, the web store has not," Rubin said in the post. "It's remained a niche channel for early adopters, but it's clear that many customers like a hands-on experience before buying a phone, and they also want a wide range of service plans to choose from."

The abrupt shift comes after several setbacks for Google's original strategy, in which Google hoped to offer a family of Nexus devices through the Web store to change the way consumers purchase phones. However, only T-Mobile has agreed to support the Web-only model by offering a monthly plan, with Verizon and Sprint backing out after having pledged their support.

It's difficult to see where Google goes from here with the Nexus One. In less than five months since the breathless introduction of the Nexus One, Google will wind up doing exactly it swore up and down it was not going to do: directly competing with its Android partners at retail with its own-branded phone.

Google refused to make executives available to discuss the closing of its Web store, or the broader strategic implications. There are many: how will carrier partners be instructed to sell the Nexus One against other Android phones like the Droid Incredible or the Evo 4G? Will Google be forced to advertise the Nexus One in more traditional channels--such as television--in order to compete? Now that three of the four major U.S. carriers have refused to support the Nexus One, where exactly does Google plan to distribute this phone now that the Web store is on its way out?

A company representative would not comment on plans for marketing and advertising as well as whether or not other carriers are slated to come on board. The representative also declined to confirm how many Nexus One phones have been sold to date, something the company has refused to address for several months.

Google's Nexus One plan was always peculiar, given the broader success of Android over the last several years as a true mass-market smartphone operating system. Why did Google decide to throw a wrench into that plan with the Nexus One introduction, which clearly has not been well-received by its partners?

In January, Google answered that question by saying it wanted to set a higher bar for hardware designers and change the way smartphones are sold, pitching itself as the catalyst that would break up an entrenched industry with exclusive phones, two-year contracts, and control over application platforms. Less than five months later, it has declared that strategy a failure by closing its Web store, and the Nexus One's hardware advantage was quickly erased by the Droid Incredible and Evo 4G, two phones Google had to know were in the pipeline when it announced the Nexus One.

It's not hard to believe that the Nexus One itself might fade off into the sunset soon after the Web store closes, a curious reminder of the limits of Google's ambition. Perhaps a few Google employees agree: just this week, Google lost two key Android and Nexus One team members, Erick Tseng and Cedric Beust, to other companies.