Is Google growing faster than the hands that feed it?

Thursday 11 March 2010 Comment  |  

 A month ago we reported that Google was poised to trial a 1Gb broadband service in America, with the hope of later rolling out an open access network of super-fast fibre broadband. This network will, it hopes, be used by multiple service providers, thus keeping pricing competitive - which Google hopes to achieve by running its network in an "open, non-discriminatory and transparent way".

This, of course, sounds idyllic. But then so much of what Google does, does. From the multi-coloured logo through to the fun of messing around with Google Earth or doing a daft  'I'm feeling lucky' search, it has cultivated an enviable public image of a playful consumer champion amid the corporate giants such as Microsoft, BT and AOL.

In reality, it is every bit the corporate, capitalist behemoth: 97 per cent of its $23,888,804,000 income in 2009 was from advertising, while it has close to 86 per cent of the global search market - that's 87.8 billion worldwide searches on Google sites per month. Unsurprisingly, its global website ranking is 1 - and, of course, it owns YouTube, Blogger.com and now Android, amongst others (figures from Pingdom).

The key to much of Google's future lies in the clouds, or more accurately 'the' cloud: the idea that the majority of data and software programs are not stored on our devices, but online (on supplier servers), with our constant and speedy internet connections meaning we can access ever more complex content across a range of internet-ready devices. From streaming media such as YouTube to its fledgling operating system Chrome, Google needs a whizz-bang internet service to make its dreams come true.

But while the internet that spawned Google is getting faster all the time, is it getting fast enough, fast enough? And is it reaching as far is Google needs it to? You only need to look at the proposed 50p levy in the UK to see that the expansion of super-fast broadband in the UK has stopped where the profit dries up for the incumbent internet providers, ie the bigger towns and cities. Virgin's cable empire only stretches to 50 per cent of the population and lack of profit means it probably won't go further. 

It's a situation that will be mirrored in the US, and other markets, and this lack of expansion is sure to irk Google. Hence, it seems to be taking matters into its own hands and taking some of its vast earnings into the network playground to hurry things along a bit, much like a house builder paying for improvements to local amenities and travel infrastructure so that people will be tempted into a new area.

Simon Owens over at Bloggasm pointed me to an interesting blog written by Michael K Powell, former chairman of America's Federal Communications Commission (the FCC), which alludes to this point. The article, over at Broadband For America, is titled Proof network investment and innovation matter to the future of the internet and makes interesting reading.

As Powell points out: "It’s the network of networks which make content applications like Google possible. Internet access makes Google possible. And it’s private investment by broadband companies which makes future Google success stories possible."

So Google will make a super-fast network, then let the ISPs continue their price wars, slowly tearing each other apart, to provide ever more complex and profitable Google applications to flourish in our homes, our cars, our pockets - who knows, probably soon through a jack in our heads and out of our red, glowing eyes. Don't have nightmares...

 

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