Wednesday 27 April 2011

Google: We're in Kansas City To Make Money

At the end of March Google finally selected Kansas City, Kansas as the lucky city where Google will launch their long-awaited 1 Gbps fiber to the home trial service. During the announcement Google appeared to change their tune slightly, insisting that they might expand the service into additional cities despite previously stating that this would be a one-shot deal. The company also suddenly seemed less certain about whether or not they'd let multiple companies come in and offer service over their network, though Google has told us nothing on that front has changed.
Google initially suggested that while this network will certainly benefit the target city, it would be a test bed focused on next-generation services, and that Google did not want to get into the ISP business. In a conversation with the Kansas City Star, Google makes it very clear that they're getting into this to make money, and that Kansas City won't just be a digital "petri dish":
Kansas City, Kan., won’t be just a digital petri dish testing the powers of gigabit connectivity. Rather, without tax breaks or subsidies, Google maintains there’s a buck to be made pumping data at light speed, one connection at a time. "We intend to build and operate a successful business in Kansas City, Kan. It’s not a proof of concept. We’re a business,” said Kevin Lo, the Google executive overseeing the network installation. “We expect to make money selling Internet access in Kansas City, Kan."
Sanford Berstein analyst Craig Moffett, who we often pick on for criticizing any carrier that actually upgrades their network, pops up in the article to suggest it's "exceptionally ambitious" for Google to believe they can make money on the effort. Moffett, whose recommendations that phone companies shouldn't upgrade to fiber is helping cable eat DSL's lunch in rural markets, somehow doesn't believe that selling wholesale/retail bandwidth, collecting and selling a litany of data on Kansas City users, and pitching those users Google ads and services can be a money maker.
Source http://www.dslreports.com/
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