Google Fiber Is Good for the Country, and for Google
NEW YORK (TheDeal) -- Analysts have cited many benefits for Google Inc.
As Google CFO Patrick Pichette said during Thursday's quarterly earnings call, "It's very early days." But it wasn't that long ago (September 2010, to be precise) when this column posited that getting out of the gatekeeping-of-content business would actually benefit cable companies provided they accept their fate as dumb pipes. By extension, the business of content development and distribution could be rationalized in ways never before realized.
Before the Provo announcement, Google had brought its gigabit technology to Kansas City, Missouri and Kansas with plans for Austin, Texas. However, as CEO Larry Page made clear during the earnings call, the Mountain View, Calif.-company has no plans to limit the initiative to be nothing more than a "science experiment."
"On fiber," Page said, "we look at places where we can provide products that can make really big difference in people's lives. And we can make a lot of money and resources doing it."
Never mind that building out broadband stands to erode the company's enviable margins. That may be of more concern to Google analysts than Google management. It's also a concern completely eclipsed by the opportunity of what CFO Pichette called "writing the new chapter, the next chapter of the Internet."
Note the focus on the Internet and, in all other corporate statements about Google Fiber, the emphasis on gigabit speeds. Sure, the recently available Kansas City offering includes a video component for an extra $50 per month. Or, as the Google Fiber website advertises: "Gigabit + TV $120/mo" versus "Gigabit Internet $70/mo." It's readily apparent, nonetheless, that Google has no real interest in protecting the bundle that's so precious to cable programmers.