Google (GOOG)
Google’s latest announcement has created quite the frenzy of excitement. It even has mayors renaming their cities in hopes of persuading the internet juggernaut to launch its experimental service in their zip code. Google has decided to test an ultra high-speed internet service with as many of 500,000 U.S. residents. The experimental technology will offer users internet speeds a 100 times faster than most broadband connections currently available in North America. The iconic search engine provider wants to see how “everyday” people will use such a powerful broadband network. Google is a powerhouse in the web industry, and has been very successful over the years. However, is Google taking things too far with its recent attempt to play internet service provider?
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Stock Analysis
Google understands that you can’t stay in first place by running in place. As a result, Google is constantly trying to improve its business and take the coveted “next step”. It seems to be concentrating its core competencies on internet search and internet advertising. Almost everything Google does is to better position itself for those two business principals. Google identified the mobile market as the next big thing for internet search and advertising. So, it began designing mobile operating software and eventually its own phone. Google knows that more user data means better search results. The best way to collect data is to be the one delivering it. A successfully ISP launch would give Google a level of control that it has never seen before.
Assuming that Google could pull off providing an ultra high-speed internet service to the masses, it would have unlimited access to even more detailed user data than it already does. This type of information would only further improve Google’s competitive advantage. This “holy grail” of information would enable Google to return better internet search results as well as more effective and relevant advertisements. The web industry titan is aggressively trying to build both mobile and traditional internet market share, but is it trying to do too much?
There is a possibility that Google may stretch itself thin if it tries to expand to a full service internet provider, but that is partly why it is launching the experimental tests. Google needs to see if it can handle such a lofty endeavor as providing high-speed internet on a large scale. From a social standpoint, people may feel uncomfortable with Google having such a stranglehold on the internet, but the Wal-Mart parallel seems all too applicable. The larger Google becomes the more leverage it will have on prices, and ultimately most people will opt for the cheaper prices. However, Google is far from rolling out its ultra high-speed internet to the public. For now, Google is simply hoping that its experimental test campaign will better “wire” itself for future success.
More news about Google:
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- Apple’s Cold War with Google Heats Up — Apple (AAPL: Charts, News, Offers) accuses Google of copyright infringement with its Android phones.
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