Why Google Is Expanding into the Internet Service Business

Last month, it was rumored that Google planned to resell existing cellphone networks. Today, Google confirmed this, announcing its plans to enter the wireless carrier market. Much like Google Fiber, this wireless service is planned to be limited in scope, and is “intended to demonstrate technical innovations that carriers could adopt.” In respond to Google Fiber being rolled out in Austin, TX, AT&T offered similarly low priced, high speed Internet services to compete with Google in Austin. Hopefully, a similar result will occur, with consumers having choices when it comes high speed wireless service at a competitive price, even if it is only in a limited area.

Google’s announcement to resell existing network bandwidth is not the first time it’s planned offer wireless service to consumers. Project Loon, which came out of Google’s experimental development lab, Google X, was announced in 2013. It’s goal, through the use of Internet connected high-altitude balloons is to offer decent Internet service at a reasonable price to users in rural areas, who do not currently have such an option. Development of the project is still under way, and is reportedly making progress. Similarly, in 2014 Google acquired Titan Aerospace, a company that was designing high-altitude, solar powered drones. Google’s Titan drones, which will soon make their first flight, is yet another promise of Google’s to offer Internet access over a wide rural area.

Why is Google expanding into the Internet business? There’s more to it than simply making a profit by selling the service. Offering a decent Internet service in rural areas allows millions of users to use the Internet in ways that were beforehand limited due to their poor connection. The idea is that if people have the option of a better connection at a cheaper price, more users will sign up, and once signed up, will use the Internet more than they had with their previous provider. And, given Google’s dominance in certain areas (search and YouTube, to name two), chances are that these consumers will be using Google services in one way or another. Since Google’s primary source of revenue is selling advertisements, more connectivity means more advertisements being served. And the more users use Google products, the more Google knows them, which means they can more efficiently target advertisements. Additionally, by providing a good Internet and data service, Google will be opening up millions of people to the smartphone market, where they can use yet another Google product: Android. Facebook has looked at providing similar services, with the same goal as Google: more people that have access to the Internet means more people that have access to our product.

Putting aside any issues or concerns that may exist with building profiles of people based around their search history, purchases, etc., I think it’s great that we’re seeing a push to offer better Internet service in both urban and rural areas, but especially in rural areas.

http://arstechnica.com/business/2015/03/google-talks-about-offering-its-own-cellular-service/

http://www.wsj.com/articles/google-confirms-plan-to-offer-wireless-service-1425308552