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Summary:

[qi:022] The Wall Street Journal’s report about Google’s big mobile plans is one that covers all bases, and leaves you where you started from: scratching your head. The Journal says Google may or may not buy a carrier; invest in a carrier; partner with a carrier, […]

[qi:022] The Wall Street Journal’s report about Google’s big mobile plans is one that covers all bases, and leaves you where you started from: scratching your head. The Journal says Google may or may not buy a carrier; invest in a carrier; partner with a carrier, and/or may bid for spectrum. Aka, anything is possible. Most of this speculation has been already done the rounds. One new thing WSJ reports that is of interest:

Google, meanwhile, already is running a test version of an advanced wireless network at its Mountain View, Calif., headquarters, gaining operating experience that could come in handy if it wins the spectrum and decides to run a full-scale national mobile carrier, according to people familiar with the matter.

They are using this network, under license from FCC, to test prototype devices that use Android mobile OS. That network is interesting for sure, but to go from a tiny network to owning-and-operating a humongous nationwide consumer-centric wireless network needs a big leap of faith,especially for Google investors. But then last week, A-Fraud returning to Yankee Stadium was as likely as waking up to armageddon.

Other notable facts from the WSJ story:

* Google has invested in femtocell maker Ubiquisys
* Google has discussed possibly investing in Clearwire Corp.

So what do you think: will Google buy a carrier, bid for spectrum or do nothing?

Related: Should Sprint send Silicon Valley a Super Poke?

  1. Here’s an article I wrote about Google’s Internet Plan’s that addresses some of the questions above: http://fishtrain.com/2007/10/10/googles-internet-plan/

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  2. Wow – really ambitious plan on Google’s behalf — but may come under anti monopoly scanner? specially in the EU area?

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  3. I almost got it right back in May 2006 but if I’d got it totally right I would be working there by now (maybe) http://ikisai.wordpress.com/weak-signal-papers/the-google-whack/

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  4. I think they will co-opt Sprint to lend credibility to Xohm & placate Sprint investors, without buying them.

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  5. Venkatesh Kumar Friday, November 16, 2007

    I think it would be stupid for Google to get into the wireless operator game and I wish this whole speculation had some more analysis and reasoning behind it. Why do I think that it does not make sense for Google:

    1) Google can get what it needs without buying/building an operator – What is Google after? Channels for advertising, closer relationship with users. they can get all they want by partnering with Sprint or another operator. that is the beauty of having 4 operators. You play one off the other and get what you want (e.g. Apple and AT&T). So, best option would be to partner and maybe buy a stake (like they did in AOL) if partnership without investment does not work

    1) It is very very hard – An operator business is about managing capex, acquiring customers and reducing churn. Google has ZERO experience in all this. Google’s expertise is writing great software that is technologically very hard. An operator’s expertise is running operations and marketing. Two VERY different skills. Eric Schmidt would be a fool to think he can get both within one culture

    3) Return on investment is much lower compared to its existing business. operator margins are low, capex is high and there are already entrenched competitors. Google’s ship needs to be tanking for them to justify a $10-$20B investment into an operator. As an investor, i see these as two separate businesses.

    Thoughts?

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  6. I think they will bid on the spectrum but I also think they are looking very, very closely at Sprint’s WiMax work to date. Especially now that the Clearwire deal has fallen through. Google seems to place a very high priority on keeping every option open.

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  7. Why would Google buy into a 2.5Ghz based WiMAX network, when they can bid and win a true Broadband Wireless Distribution network based on 700Mhz?
    Sprints 2.5Ghz WiMAX play will survive on the Fixed and select Portable deployments with some semblence of LOS. Mobile service within Metro and rural markets will have issues with foliage.

    700Mhz will allow Google and Partners to gain access to the Last Mile and direct access to the end user-which has limited their plans for domination of the Broadband distribution services space.

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  8. Om,

    I don’t get WSJ article. What’s new?

    They keep printing same story every month!

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  9. comparing wifi network to a cellular network is hilarious. these “people familiar with the matter” need to go to school

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  10. @P:
    That’s exactly my observation. Last couple of weeks has seen the exact same content, hashed, rehashed and rehashed yet again to be printed. I just totally lost interest and honestly think Amol Sharma and the other authors have some vested interests in drumming up the news! Are they freakin’ out of their mind?

    Journalism, due to folks like these, gets a bad name.

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