What's Google up to? It's going to become a wireless telco with its own fat backbone...
...a searchbox accessible from anywhere
My colleague Richard Koman picked out a great discussion topic for our newsletter subscribers. It is about where Google is heading and what it plans to do with the $4bn it is adding to its war chest...
I think it is very clear what Google's strategy is, or rather has to be. I think it is getting ready to do a wireless telco buy. Because everything is rapidly being walled up into gated communities, and the gatekeepers are the cable companies and the wireless mobile phone companies (the land-liners are toast).
Those walled gardens can shut Google out, or put Google a click or two away....and on a mobile phone that might as well be Siberia, you are going to use the first search box you see and it doesn't have to be Google.
Google is not interested in search. It is interested in connecting the dots in user behavior. My cell phone can tell Google a huge amount of information about my user behaviors. And as Om Malik at Business 2.0 GigaOm, rightly points out, location is a powerful thing when you are in the contextual ad business...
Search box reach
For Google, it is all about location, location, location. It wants a Google search box in front of every person at any time and in every place. Look around, I bet you can see one right now :-)
Eric Schmidt, on Charlie Rose, said the mobile phone is more important than the PC, because there are huge areas of the world where the PC-based Internet doesn't reach but wireless cell phone technologies can.
"We'll get them all, even the ones in the trees," he said, referring to the Amazon jungle and all the unwired-to-Google-searchbox-places still remaining in the world. Google will get a search box to them on a wireless phone that runs on bicycle-power recharging stations in the wilds....is my bet.
That's why Google has to become a wireless telecommunications company -- because the carriers are forming wireless walled gardens, and Google needs its own.
Wonderful vaulting WIMAX
The only other alternative is to hope that WIMAX can vault over the walled gardens and we can get access to nearly free bandwidth through public WIMAX/WiFi projects...then we can get a Skype mobile phone with a Google interface that knows who you want to call and the call is virtually free...now that's disruptive.
But there is way too much at stake for that to happen. The wireless telcos won't allow the PC-ization of their markets because they saw how Intel and Microsoft sucked in all the margin from the PC market, leaving PC makers with crumbs...and an open communications network, the Internet! Where is the money in that? Lots of user value, of course...
The wireless telcos have proprietary networks that are massive cash generators and new cash markets are right ahead. They won't give that up to WIMAX and public WiFi in a hurry.
That's why Google can't bet on WIMAX, (it would take too long anyway). It has to hedge its bets and it has to become a wireless telco. BTW, look at where Softbank in Japan is heading...