Here’s a column I posted at globeandmail.com about Google’s Web plans:
“First eBay, and now Google. The on-line auction network dropped a bomb on the tech sector last week by announcing its takeover of voice-over-Internet provider Skype for somewhere between $2.6-billion and $4.1-billion (U.S.), and now there are rumblings that Google is not only about to roll out a wireless service of some kind, but is also putting together its own optical fibre network  something Web commentators have dubbed GoogleNet.
Is Google planning to become a virtual phone company, combining all the “dark” or unused fibre it’s buying with its new Google Talk service? Does it want to roll out Wi-Fi access across the U.S. — or even around the world — to make it the de facto Internet provider for mobile surfers? Or does it just want to control as much of the Internet as it can, so it can monitor all your web traffic and serve up ads wherever you are? Perhaps all of the above.
One thing is certain: Google has big plans, and they don’t just involve search. And not only is its market value closing in on $90-billion — which puts it ahead of Hewlett-Packard and Nokia (not to mention SBC Communications, the largest telco in the U.S.) and just behind Time Warner and wireless telco Verizon — but it also has $4-billion in cash it just raised from a stock offering. That’s more than enough money to finance some interesting investments.
The GoogleNet idea first emerged in an article in Business 2.0 magazine, which quoted unnamed sources as saying Google was buying up unused fibre-optic cable across the United States. The story said that the search company was building a network by buying fibre from wholesalers as well as leasing space on other networks. Google also recently hired Vinton Cerf, one of the men who invented the Internet Protocol and is known the “father of the Internet.”
This week, a telecom industry website called IP Media Monitor said it had spoken to insiders who had seen the terms of a request for proposals from Google. They said the company was looking to build a “dense wavelength-division multiplexing” or DWDM optical network across the United States. According to these sources, the requests Google was making “suggest the company is looking to become a major competitive communications network provider.” Only telcos such as Sprint and AT&T operate large DWDM networks, according to IP Media Monitor.
Some telecom analysts say Google could construct such an optical pipeline for about $100-million — in other words, about 2.5 per cent of the money raised in its latest share offering. Even if you include the cost of all the dark fibre, it’s still hard to get close to even $500-million, let alone a billion. And what would Google want such a network for? That’s where things get interesting. What about a free network of wireless hotspots? What about combining those with VOIP services that run over Wi-Fi, which would let you become a telco at a fraction of the cost?
As reported by Mr. Malik and others, Google has already launched a Google-branded Wi-Fi service in San Francisco, and there are signs that it wants to roll that out along with its own security software for use with Wi-Fi hotspots, called Google Secure Access. Several websites have reported that documents are available on Google’s site — through unpublicized links such as wifi.google.com/faq.html — that describe the software and the Wi-Fi service.
It’s possible that Google only plans to brand other people’s wireless hotspots with its own name, and that Google Secure Access is just designed to drive Internet traffic, which helps the search engine bring more eyeballs to its ads. But then why buy all that dark fibre and capacity? Some skeptics have said that the GoogleNet idea is a fantasy, and that the company likely wants to ensure that it has enough bandwidth for its services, such as Google Talk.
Others, however, say the size of network the company is constructing only makes sense if you assume that it needs huge amounts of capacity — for things such as a telecom network, a video-on-demand network, digital distribution of Hollywood films, etc. “Becoming a service provider would be quite a stretch for Google, but considering the billions of dollars [it] could throw at the problem, it could become a reality,” analyst Roger Entner of telecom consulting firm Ovum wrote in a recent research report.
Use your free Google Wi-Fi to fire up a mobile browser, which then brings you to your Google home-page, or start a VOIP chat using Google Talk — all the while being offered ads related to your local area or the services you’re using. Who would have nightmares about such a prospect: Yahoo? Yes. Microsoft? Yes. The phone companies? Definitely.”