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Summary:

Update: Sources at Google are denying that the search giant has purchased Wi-Fi hotspot company ICOA, while executives at ICOA are also telling news outlets that a release announcing the deal is false.

Update: The release we based this story on looks like it wasn’t issued by Google or ICOA. We have emailed Google and ICOA for an official denial, but so far, have not heard back. However, the CEO and CFO of ICOA have both told TechCrunch that Google hasn’t purchased ICOA, while AllThingsD is reporting that Google sources are denying the deal as well. Our sources at Google have also denied the deal.

Update #2: The CEO and chairman of ICOA, George Strouthopoulos, emailed his official denial of the release and promised to report what he thinks is some kind of stock fraud, saying,

“This is NOT TRUE!!Never had any discussions with any potential acquirers!! This is absolutely false!
Someone, I guess a stock promoter with a dubious interest, is disseminating wrong, false and misleading info in the PR circles.
ICOA will report this to the proper authorities.”

Update #3: PRWeb released its take on the abuse of its listing service with a note that implied that someone stole someone’s ID in order to post the fake ICOA release.

Our original report follows below …

Google said it spent $400 million purchasing ICOA, a provider of Wi-Fi access in heavily populated public places. This would mark Google’s second big foray into Wi-Fi after the search giant attempted to build out a municipal Wi-Fi network in Mountain View, Calif. But this Wi-Fi buy looks more like an attempt to keep bringing in eyeballs for Google’s advertisers.

Google’s original muni Wi-Fi network effort failed, but Google’s quest to control the last mile access for its services has continued. It has its fiber to the home network in Kansas City as well as programs that offers sponsored Wi-Fi hot spots around the country. This purchase seems more like an attempt to deliver better access to the Internet via Wi-Fi in dense areas as a way to ensure people on phones, tablets and laptops go through Google in getting online.

ICOA deploys and operates public Wi-Fi in 40 states. Its clients include, hotels and airports. Unlike Google’s deal with Boingo, the Wi-Fi hotspot provider it worked with over the summer to bring free Wi-Fi to malls, this deal nets Google the expertise to compete with Boingo if it so chooses. It could also give Google some negotiating power with operators such as AT&T or cable providers who may want to strike deals with Google so their customers could roam onto Google’s Wi-Fi networks.

And for Google, which still makes most of its revenue and profits from advertising, the login screen of a Wi-Fi network offers a potential gold-mine. By selling a sponsorship page to the highest bidder in a given location, Google can provide free Wi-Fi for users, sell a lucrative ad deal and create a bargaining chip with ISPs in both the wireline and wireless space.

This could help mitigate the loss of some eyeballs thanks to the new ways people search for information such as Siri, while also helping Google show ads to customers on mobile devices. Plus, one of Google’s smartest moves is to capitalize on its infrastructure advantage to lower its costs. That’s why it builds its own data center gear. Clearly, it sees Wi-Fi as a key ingredient in its future, so it makes sense it wants to buy the expertise to ensure it has an infrastructure advantage here as well.

And if Wi-Fi isn’t enough, there are always the rumored talks to build a cellular network with Dish Network.

Wi-Fi image courtesy of Flickr user suttonhoo

  1. Will investors who lost money on this be able to sue?

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