As Google picks up its pace on rolling out fiber Internet service – announcing Austin, Texas, and Provo, Utah in the past 10 days – one has to admire the sheer hubris of what it’s doing. Just as in mobile, Google is forcing the industry to provide low-cost access to the Internet, where it stands waiting to reap the bonanza of advertising-based services. Competitors race to keep up, expanding their broadband or mobile offerings, thereby furthering Google’s monetization strategy even as they try to thwart the advertising giant.
It’s Google’s world. We just get to live in it. And click on ads.
Free Fiber Internet For the Huddled Masses
According to Internet entrepreneur Jason Calacanis, the broadband Internet access game is already over, and Google has won. As he notes, “Google Fiber is not a test, it’s a takeover plan.” Calacanis argues that Google’s real plan with fiber-to-the-home isn’t necessarily the home broadband connection, but rather free wifi attached to each of the routers installed to use its broadband. With this free wifi network blanketing a city, it’s game over for the traditional telcos:
“Google is going to kill AT&T, Verizon, Sprint, T-Mobile and the cable companies. Kids don’t talk on the phone and they don’t have a ton of money. If they can be reasonably sure they’ll have a wifi network, then they are simply not going to sign up for AT&T or Verizon.”
While Calacanis insists that the free wifi component is “not announced, but it’s gonna happen,” the reality is that it needn’t happen for Google to win. (Underscoring Calacanis’ point, however, Google has announced that it will offer free Wifi in its first fiber-enabled city, Kansas City, though this doesn’t seem to be tethered to home broadband connections.) All Google needs is to spark competition, as has already happened in Austin. Within minutes of announcing Google Fiber there, AT&T declared that it, too, would offer 1 Gibabit Internet service to Austin.
Think Google minds? Not a bit.
After all, Google isn’t in the Internet service provider (ISP) business. It’s in the advertising business. All it needs to do is shame ISPs into offering better service, which service Google will co-opt to advertise against, not to mention use to provide a range of other “free” services like Voice, Apps, etc.
Google’s “Free” Playbook
If this sounds familiar, it’s because it is. Google has done much the same in mobile with its Android operating system. Worried that Apple would throttle access to the mobile Internet, Google built Android, released it as open source, and encouraged (even subsidized) its adoption.
A few short years later, Google chairman Eric Schmidt this week told the crowd at the AllThingsD mobile conference that there will be 1 billion Android phones blanketing the planet by year’s end, a number set to nearly double within a year or two.
“Android is by far the primary vehicle by which people are going to see smartphones,” Schmidt declared. “Our goal is to reach everybody.”
But even if Google doesn’t do this directly; even if Android reaches the masses through “competitors” like Samsung or Amazon, Google wins. Google wins every time people access the Internet, because odds are they will spend time with Google Search or other Google products.
Not Just An Advertising Play
Nor is free fiber and free mobile simply an advertising play. Google’s free services often have a bigger goal in mind: amassing massive quantities of data. As Tim O’Reilly discovered from Google’s director of research Peter Norvig years ago, the secret to improved translation services wasn’t better algorithms, but rather more data. Google Fiber lets Google sit inside one’s home, “collect[ing] information that users of your subscription provide, such as clicks on a Google Fiber TV remote to change the channel or search program listings,” in addition to continued monitoring of how its Fiber customers use the Internet.
That’s a lot of data, roughly none of which will gather dust in some musty data center.
None of this suggests that Google is somehow evil for enticing consumers to give up data or clicks in exchange for free services. But it is a recognition that few companies can afford to play the long game like Google. AT&T may offer Austin gigabit Internet service, but AT&T’s only current way of monetizing those services is through monthly access fees. Google can give broadband Internet away, confident that it can recoup that investment over the long haul with both advertising and more data.
It’s ambitious. It’s farsighted. It’s genius.
Image courtesy of Shutterstock.