Google here is doing what they do best which is sticking to their core business of advertising/search while spending a bit here and there to disrupt businesses that they see as threatening to their core business. It is to Google's advantage to have fast pipes to their users.
Right now they are getting their intended result from people in the USA. If Kansas City can have gigabit internet for a low price why can't I? The consumers then will pressure their provider to do the same. However it is not as easy for every other telco.
1. They need to be profitable.
2. They cannot cherry pick areas with high density yet low costs of rollout/living like KC and Austin.
So I do not think Google will ever do this nationwide as it is a bad business to be in with enormous red tape, capital expenditures and geographic distribution. It is a smart move on their behalf to do this but people should not get their hopes up for a nationwide distribution, it will never happen.
"In business, I look for economic castles protected by unbreachable moats" - Warren Buffett
I completely agree that its in Google's interest to have faster pipes. But I think Google Fiber may just be another moat for Google, another way for them to hinder their perceived threats.
I tried search for a direct link and didn't immediately see one, but Buffett himself has said before that he likes Google and, if it were older and had a slightly less risky profile for him, it would be the ideal company. It's core business is vitally important and is very capital efficient.
But I think Google Fiber may just be another moat for Google, another way for them to hinder their perceived threats.
When FB was asked about a phone they said that any phone user they'd get it wouldn't move the scale given their 1 billion+ users. Same with Google, it's extremely expensive to wire a significant number of their users, so they are doing this hoping AT&T, Comcast etc upgrade their connection and match the price. Which they might--in the areas where Google is entering. Personally, I would not count of the price being, say $70 for a long time.
> Same with Google, it's extremely expensive to wire a significant number of their users
Recent published estimates have been that it would about $11 billion to roll out nationwide in the US. That is a lot of money, sure, but less than they paid for Motorola Mobility recently. Not prohibitively expensive for Google.
> Maybe $110 billion, $11 Billion doesn't go far in US
I've gone and rechecked, the $11 billion number from recently published estimates is for a nationwide rollout to a scale comparable to other nationwide broadband providers "passing" about 15% of homes, and is exclusive of costs of actually acquiring customers.
Nationwide and 15% of homes is kinda different. I say this because Verizon did spend tens of billion on FIOS and barely reached tens of millions of people.
Also doing it in a few cities as an experiment and doing it as telecom provider are very different too (heavily regulated and extremely expensive). Just imagine what it takes to dig in Manhattan with all the permits, payments, licenses, unions etc etc...
> So I do not think Google will ever do this nationwide as it is a bad business to be in with enormous red tape, capital expenditures and geographic distribution.
Until and unless network neutrality is a secure market principle (and its not in the US now with weak regulation for fixed broadband and even weaker for mobile, and carriers fighting the FCC's authority on even those weak regulations), the revenue from Google's services face a permanent risk from carriers adopting rent-seeking policies (this is much the same kind of risk that Google faced from the potential of a mobile OS monopoly or a browser monopoly); as such, as much as being a carrier is a bad business to be in in general, its potentially an even worse business for Google not to be in.
Right now they are getting their intended result from people in the USA. If Kansas City can have gigabit internet for a low price why can't I? The consumers then will pressure their provider to do the same. However it is not as easy for every other telco.
1. They need to be profitable. 2. They cannot cherry pick areas with high density yet low costs of rollout/living like KC and Austin.
So I do not think Google will ever do this nationwide as it is a bad business to be in with enormous red tape, capital expenditures and geographic distribution. It is a smart move on their behalf to do this but people should not get their hopes up for a nationwide distribution, it will never happen.