Can Google Make Money selling Broadband Access?

Google says its objective in building a symmetrical 1-Gbps fiber to home network in Kansas City, Kan., and then Kansas City, Mo. is a serious business initiative, “not a charity," says Kevin Lo, Google Access general manager.

"It’s not a nonprofit. It’s not a dot.org initiative,” said Lo. “We expect to make money at it. It’s a business we expect to be in.” Google’s high-speed gamble in KC


Perhaps the U.S. company whose commercial activities are most similar to Google Access is Sonic.net, an ISP that over time has concentrated mostly on broadband access as its business, though it now also sells voice services. Sonic 1-Gbps network

Tablets are Not PCs, Google Finds

One of Google’s studies of tablet use over a two-week period, which had users recording every occasion that they used their tablet, shows that tablets really are not PCs, any more than smart phones are used in the same way that PCs are used.

Most consumers use their tablets for fun, entertainment and relaxation while they use their desktop computer or laptop for work, Google User Experience Researchers Jenny Gove and John Webb say. About 91 percent of the time that people spend on their tablet devices is for personal rather than work related activities.

And, as it turns out, when a consumer gets a tablet,  they quickly migrate many of their entertainment activities from laptops and smart phones to this new device.

The most frequent tablet activities are checking email, playing games and social networking. The study also found that people are doing more activities in shorter bursts on weekdays (social networking, email) while engaging in longer usage sessions on weekends (watching videos/TV/movies).

Tablets are multi-tasking devices with at least 42 percent of activities occurring while doing another task or engaging with another entertainment medium.

Also, tablets are more accurately described as “untethered” devices than “mobile” devices, to the extent that tablets primarily are used at home. Unlike smart phones that go everywhere and laptops that travel between work and home, few consumers take their tablets with them when they leave the house.

However, consumers do take their tablets on vacation or work trips where they use them as a laptop replacement and a small number take them on their commute. The  research also found that tablets are for the most part a one-person device, although there are consumers who share their tablet with other family or household members.

Tablets are used on the couch, from the bed and in the kitchen.


The activities and locations shown in the above chart were self-reported by respondents.

For many people, websites and apps designed for smart phones just don’t cut it on tablets. Instead consumers are taking advantage of the bigger screen and prefer using fully featured apps and the full desktop sites on their tablet. Users also seem to do things on tablets that are exclusive to the tablets.

That could indicate that people shift app use to the tablet from their smart phones and PCs, or only undertake use of some apps on the tablet, when they might do so on a PC or smart phone.



Google on tablet use

"Telcos will Compete with Banks"?

Smartphones using encryption and biometrics will enable telecom companies to compete with banks and credit card companies for retail payment transactions, argues Futurist Patrick Dixon. That might not seem to be the way providers of mobile wallet services such as Google, Isis and PayPal are heading. In most cases, all of those providers require the existing payment providers to provide a complete solution. 


But there might be a difference between the ways new contestants side step into a market, and the efforts such firms might make in the future. As many strategists could argue, a common way new firms get into a market is by starting at the "low end," and then, over time, adding more and more capabilities until, at some point, full head to head competition is feasible. 


Rogers, in Canada, provides an example. Rogers is becoming a "bank," though it likely will confine its early efforts only to some highly-focused applications related to its current customer base. But it would require little imagination to suggest that, once successful, additional functions would become attractive. 


With the caveat that predicting the future is an often-perilous undertaking, and that predictions about the future are more often wrong than right, Dixon thinks big things can happen in mobile commerce, mobile payments and shopping. 


Mobile payments could generate commissions of up to EU2 billion a year in countries like France, Germany, Italy and the UK, he says.  Mobile Payments Future

Google Not Dominant in Search?

Some will dismiss assertions by Eric Schmidt, Google executive chairman, that Google is not dominant in the search business, something Google Chairman Eric Schmidt recently told U.S. regulators.


Schmidt argued that Google is not “overwhelmingly dominant” in the online search market, and competes with the likes of Facebook, Apple, Yahoo and Microsoft. Google not dominant


Some will scoff at that notion, but there is a reality, namely that in the mobile domain, people do not "search" in the old way. Put one way, where traditional search is a relationship between "pages," in the mobile domain, search is more of a "relationship between persons," while the reason for "searching" changes.


In the desktop domain, search is often about information related to ideas and facts. In the mobile domain, search is more often about "things I want to buy." Google argues that leadership in desktop search does not ensure leadership in mobile search.


That has been a growing trend since the mid-2000s, one might argue. Mobile search is different


The mobile search market generated revenues of $901 million in 2010, equivalent to around three percent of total search revenues.  In 2015,  mobile search revenue is expected to  reach $8 billion, equivalent to around 11 percent of total search revenues and representing a compound annual growth rate of 55 percent. Mobile Search Challenges Google


Mobile search makes up around a quarter of total mobile advertising revenue, but this will increase rapidly and is forecast to exceed 40 percent in 2015.


Although Google already has a strong position in the mobile advertising market, a range of established and new players are challenging its dominance. Voice and local search are important trends, providing opportunities for new and established players. Operators and handset vendors have a strong position in the value chain to influence the success of mobile services.

In fact, many observers would note that Google is challenged by social networking generally, as social networks supplant search engines as the place and the way people look for things, find out about things and link to things.


So far, the historical record suggests that no firm dominant in one era of computing actually retains that same leading role in the following era.


As IBM was dominant in the era of mainframes, but DEC and others lead in the mini-computer era, while Microsoft and Intel lead in the era of personal computing, it is reasonable to expect that none of those firms will be dominant in the next era, however we come to describe it.


Some might argue that Schimdt's comments are merely a reflection of an understanding Google has that it will not, in the next era, have the market leadership it arguably enjoys today.


The issue, some might argue, is to avoid regulating based on the past, and act only when future problems actually have arisen. It might not be precisely true to argue that Google "does not" have a commanding position in desktop search.


But it already is clear that such leadership has not yet conferred on Google any ability to dominate the emerging "search" business, which is based on social networking and mobile mechanisms that increasingly are different from desktop search. Over time, in other words, Google's leadership in desktop search will be effectively challenged by other ways of using "discovery" mechanisms in the mobile and social realms.

Google Doesn't Want to be a Service Provider

From a return on invested capital perspective, the difference between Google’s current business model and that of a facilities-based wireline service provider like Verizon could not be starker,” say Sanford Bernstein analysts Craig Moffett and Carlos Kirjner.

“In 2011, we expect Google to post an ROIC of 56 percent, or 38 percent when including goodwill,” they say. “In 2010, Verizon’s wireline segment (which includes FiOS) sported an ROIC excluding goodwill and ‘one-time items’ of  just 1.6 percent.”

“Including goodwill and similar intangible, and smoothed one-timers, it was minus one percent,” the analysts say.

Those are good reasons why Google will not want to become a service provider, even as it considers the virtual necessity of offering entertainment video and voice services in addition to broadband access on its 1-Gbps test networks in Kansas City, Kan. and Kansas City, Mo.

Wireline networks have the weakest returns on invested capital with a 1.5 percent gain over the last decade, Moffat says Wireless networks had a meager return of 0.3 percent. Cable garnered a 2.5 percent return. Low returns from invested capital
Satellite networks had the best return on invested capital at 5.5 percent. It’s no wonder that DirecTV shares have trounced other companies in 8-year returns. Others stocks—AT&T, Comcast, Dish, Sprint and Verizon—have negative returns.



Google, reports the Wall Street Journal, is looking to add video entertainment services, and possibly voice, for customers of its 1-Gbps fiber to home network in Kansas City, Mo., and Kansas City, Kan. The moves would be logical.

Many observers have wondered how such a network, delivering only 1-Gbps Internet access service, at prices "comparable" to existing services provided by telcos and cable companies, could possibly generate enough revenue even to break even.

As it turns out, Google has no magic rabbit to pull out of its hat. The costs of its network are not dissimilar from the costs any other service provider would incur. And few service providers would contemplate building a fiber-to-home network with a single revenue stream, namely Internet access.

Of course, Google could have chosen to operate as a "wholesale only" provider of bandwidth to other service providers. It could still do so. But the few U.S. examples of access network providers who attempt to operate "wholesale only" have not proven highly viable, most would probably conclude.

The only way to approach break-even apparently is to operate the network the way all other such networks are operated, namely providing retail triple-play services to consumers.

Nobody expects Google to become a "service provider" with its own facilities, on a wider scale. But that isn't the point. To some small extent, Google might become a distributor of voice and video services, not just a broadband access provider. But once it secures distribution rights, there are other possibilities.

So far, it seems unlikely Google would get licensing rights that will immediately save consumers money. In fact, any video rights will likely include the normal clauses that require Google to pay as much as other video distributors. But if Google were to focus its services only on "over the top" delivery, it might still have a clear price advantage, compared to other service providers who must build and operate access facilities, of course.

Google might also find it only can get content rights if it agrees to bundle channels in the typical way cable, satellite and telco TV providers do, which would limit the amount of innovation Google could attempt. Also, until Google got serious volume, the prices it pays for content rights will not allow significant retail price discounts.

But any move by Google into the triple-play services market would be a bit of a shock, even if nobody thinks Google wants to become a traditional service provider. The broader issue is that if Google can get what essentially amounts to "streaming rights" to most of the standard TV channels, it would have a bit of room to challenge not only the telco, satellite and cable providers, but over time might gain some leverage to package those channels differently.

In the near term, we should anticipate little change, as the content providers will act in ways to protect the existing distribution model. Longer term, if Google should get traction, matters will change. Google Ponders Pay-TV Business

Google Looking at Triple Play Services

Google, reports the Wall Street Journal, is looking to add video entertainment services, and possibly voice, for customers of its 1-Gbps fiber to home network in Kansas City, Mo., and Kansas City, Kan. The moves would be logical. 


Many observers have wondered how such a network, delivering only 1-Gbps Internet access service, at prices "comparable" to existing services provided by telcos and cable companies, could possibly generate enough revenue even to break even.

As it turns out, Google has no magic rabbit to pull out of its hat. The costs of its network are not dissimilar from the costs any other service provider would incur. And few service providers would contemplate building a fiber-to-home network with a single revenue stream, namely Internet access.

Of course, Google could have chosen to operate as a "wholesale only" provider of bandwidth to other service providers. It could still do so. But the few U.S. examples of access network providers who attempt to operate "wholesale only" have not proven highly viable, most would probably conclude.

The only way to approach break-even apparently is to operate the network the way all other such networks are operated, namely providing retail triple-play services to consumers.

Nobody expects Google to become a "service provider" with its own facilities, on a wider scale. But that isn't the point. To some small extent, Google might become a distributor of voice and video services, not just a broadband access provider. But once it secures distribution rights, there are other possibilities.

So far, it seems unlikely Google would get licensing rights that will immediately save consumers money. In fact, any video rights will likely include the normal clauses that require Google to pay as much as other video distributors. But if Google were to focus its services only on "over the top" delivery, it might still have a clear price advantage, compared to other service providers who must build and operate access facilities, of course.

Google might also find it only can get content rights if it agrees to bundle channels in the typical way cable, satellite and telco TV providers do, which would limit the amount of innovation Google could attempt. Also, until Google got serious volume, the prices it pays for content rights will not allow significant retail price discounts.

But any move by Google into the triple-play services market would be a bit of a shock, even if nobody thinks Google wants to become a traditional service provider. The broader issue is that if Google can get what essentially amounts to "streaming rights" to most of the standard TV channels, it would have a bit of room to challenge not only the telco, satellite and cable providers, but over time might gain some leverage to package those channels differently.

In the near term, we should anticipate little change, as the content providers will act in ways to protect the existing distribution model. Longer term, if Google should get traction, matters will change.

Google Ponders Pay-TV Business

Google Tries to Provide More Ad Transparency

"Because ads should be just as useful as any other information on the web, we try to make them as relevant as possible for you," says Susan Wojcicki, Google SVP, Advertising. Over the coming weeks, users will be able to learn more about ads served up to you by clicking the "Why these ads" link next to ads on Google search results and Gmail.


When you click the “Why these ads” link, you’ll find information about why you’re seeing a particular ad and how it’s personalized for you. If you’re searching for a local restaurant while you’re on vacation in Hawaii, you would see ads for restaurants that are nearby, rather than restaurants in your hometown.

"Why these ads?":

Google About To Launch Website Mobilizer "GOMO"

Google is preparing to launch a new service called GOMO that creates "mobilized" websites on demand. Mobile ads are an important revenue stream for Google, so much so that it offers a range of free tools to create mobile versions of existing websites. 


In addition to all these free services for mobilizing sites, Google is incentivizing good mobile content with its ad programs and even punishing sites that aren't mobile-friendly. Google is changing its AdWords program to reward mobile-optimized sites and adding +1 buttons to mobile ads.

Google About To Launch Website Mobilizer GOMO

Google Offers Partners With 14 Deal Providers

Google has just announced a set of new partnerships with over a dozen niche daily deal providers, which will now be integrated into the Google Offers service, both on the Web and in the Google Shopper mobile applications for iOS and Android.

The new Google Offers partners include Dealfind, DoodleDeals, Gilt City, GolfNow, HomeRun, JuiceInTheCity, kgbdeals, Mamapedia, PlumDistrict, PopSugar Shop, ReachDeals, Active.com Schwaggle, TIPPR, and zozi.


Initially, these deals will be only available to those in the San Francisco Bay area, but this feature will soon arrive to other areas, says Google. Google Offers Partners With 14 Deal Providers 

Some are skeptical about the long-term staying power of "daily deals" services. Certainly not all of the current providers will survive. But if you believe mobile wallet services will succeed, it will be largely on the strength of deals, offers and other rewards consumers receive, as well as the loyalty, retention and customer acquisition retailers benefit from.

How Steve Jobs Influenced Google

Steve Jobs apparently gave Larry Page, Google CEO, some advice recently:

"We talked a lot about focus. And choosing people. How to know who to trust, and how to build a team of lieutenants he can count on. I described the blocking and tackling he would have to do to keep the company from getting flabby and being larded with B players. The main thing I stressed was focus. Figure out what Google wants to be when it grows up. It's now all over the map. What are the five products you want to focus on? Get rid of the rest, because they're dragging you down. They're turning you into Microsoft. They're causing you to turn out products that are adequate but not great."

How Steve Jobs Influenced Google's Restructuring

Google considers building fiber network in Europe

Google Senior Vice President David Drummond Friday said Google is considering building a fiber network in a European country. As was the case when Google earlier began experimenting first with municipal Wi-Fi and now the fiber to the home network in Kansas City, the effort is to sway policy debates. 1 Gbps test


Google believes rightly that its own business benefits from ubiquitous and capacious broadband. So anything it can do at reasonable cost to stimulate further investment is viewed as a reasonable marketing investment. Municipal Wi-Fi

During a meeting at the French Industry Ministry, Drummond said that Google was "looking very closely" at a potential project in Europe, without specifying where this project would be launched or when. Google considers building fiber network in Europe

This wouldn't be its first foray into networks. The U.S company has already announced a plan to build an experimental ultra-fast broadband network in Kansas City.


Google's interest comes as European telecoms operators are under pressure to up investment in high speed broadband networks across the continent. 


What isn't so clear is whether the demonstration projects will have much impact. Fixed-line broadband access plant is not primarily a "software" matter that is amenable to clever coding. The input costs are well known, and Google will not have access to any tools the rest of the global industry is unaware of or unable to use or buy. 


That suggests Google will not be able to produce some new investment cost breakthrough that has wider commercial implications. Google might suggest that this is not the issue, rather the point is to provide lots of bandwidth and then see what users and developers can do. 


It is hard to see how a small test will offer the scale to entice any serious new applications, either. Since many studies suggest that people spend more time online and consume more bandwidth when they have access to faster connections, nobody would be surprised if there was some stimulative impact. 


But the likely impact in the consumer space is likely to be that people watch more streaming video, play more games and spend more time on social networks. 

Google Considers Yahoo bid

Google has talked to at least two private equity firms about potentially helping them finance a deal to buy Yahoo Inc.'s core business, according to the Wall Street Journal.

Though it is obvious why Google would want access to Yahoo's display advertising business, any such deal would immediately trigger antitrust review.

In 2008 the Federal Trade Commission nixed even a search advertising partnership between the companies. Perhaps Google thinks it could strike a deal to spin off the Yahoo search business, which is the likely source of antitrust concern, and just keep the portal operations.

Google, Private Equity Firms Mull Bid For Yahoo

Google planning major upgrades to Google ‘within days’ • The Register

Google is planning to unveil a series of major upgrades to its social networking service starting in late October 2012, including the ability to use Google Apps accounts to access Google and set up brand pages for companies and the use aliases instead of real names.


Google co-founder Sergey Brin and Vic Gundotra, Google’s senior vice president of social business, said that the first month of open access to Google has seen 40 million users sign up, and 3.4 billion photos uploaded.

Gundotra said that the demand exceeded Google’s most optimistic projections, and this has meant some features are running late in the face of user demand.

“By Christmas (2011) you will see the Google strategy coming together,” Gundotra said. “The reality was that we had to prioritize doing some work and we didn’t anticipate such fast growth.” Google planning major upgrades to Google ‘within days’

Android 4.0 Will Unify Tablet, Smart Phone

The new Android 4.0, aside from a striking new visual feel, will be the first version that encompasses both tablets and smart phones.

To meet the needs of users with tiered or metered data plans, Android 4.0 adds new controls for managing network data usage. In the Settings app, colorful charts show the total data usage on each network type (mobile or Wi-Fi), as well as amount of data used by each running application.

Google says Android 4.0 makes common actions more visible and lets users navigate with simple, intuitive gestures. Refined animations and feedback throughout the system make interactions engaging and interesting, Google says. An entirely new typeface optimized for high-resolution screens improves readability and brings a polished, modern feel to the user interface.

Virtual buttons in the System Bar let users navigate instantly to Back, Home, and Recent Apps. The System Bar and virtual buttons are present across all apps, but can be dimmed by applications for full-screen viewing. Users can access each application's contextual options in the Action Bar, displayed at the top (and sometimes also at the bottom) of the screen.

Multitasking is a key strength of Android and it's made even easier and more visual on Android 4.0. The Recent Apps button lets users jump instantly from one task to another using the list in the System Bar.

Android 4.0 Platform Highlights

Will Google Shatter U.S. Mobile Ad Forecasts for 2012?

Could Google grow its mobile advertising to $6 billion in 2012? Here's the math. If Google's present rate of sales were extrapolated for the next 12 months, it would represent about $2.5 billion. But the growth rate seems to have accelerated sharply of late.

Google CEO Larry Page says mobile revenue has grown 2.5 times in the last 12 months.


If that rate were to continue for the next 12 months, Google would then reach a run rate on the order of $6.25 billion by the end of the period.


Actual revenues would be shy of that figure, since the highest quarterly revenue would be seen only at the end of the year. Such growth would cause analysts to dramatically revise their forecasts By some estimates, all U.S. mobile ad revenues will reach only about 1.6 billion by 2012.

Will Google See $6.25 Billion In Mobile Ad Revenue Next Year?

Google Fails Fast, Often: That's a Good Thing

It might be going too far to say that Google "celebrates" failure. But Google's "beta" culture can be seen as a good thing. The Next Web took a look at 251 Google products released since 1998 and found that 90, or 36 percent, had been cancelled.

TNW notes that there were among these products eight "major flops" and "14 major successes." It is hard to say that what Google learned from the failures lead to the 14 successes.

Google fails 36% of the time

"Products are Useless Without a Platform"

"A product is useless without a platform, or more precisely and accurately, a platform-less product will always be replaced by an equivalent platform-ized product," says Steve Yegge at Google. Steve Yegge, Google software engineer. 


He rants about that matter in an "internal memo" that accidentally got published externally. 

Google Platforms Rant  


It might make most sense for those of you who do coding. The larger issue, for those of us who do not code is the importance of platforms. Some of us might use the term ecosystems.  


Those of you who just like gossip will be amused as well. 

23 Questions from Google on "Quality" Rankings

Without disclosing anything about its algorithms, here are 23 questions Google suggests content creators think about when creating content that Google's algorithms will tend to rank favorably. 


The questions are analogous to what Google's algorithms try to do when assessing the "quality" of a page or an article.

"Our advice for publishers continues to be to focus on delivering the best possible user experience on your websites and not to focus too much on what they think are Google’s current ranking algorithms or signals," Google says . "Some publishers have fixated on our prior Panda algorithm change, but Panda was just one of roughly 500 search improvements we expect to roll out to search this year."

"In fact, since we launched Panda, we've rolled out over a dozen additional tweaks to our ranking algorithms, and some sites have incorrectly assumed that changes in their rankings were related to Panda. Search is a complicated and evolving art and science, so rather than focusing on specific algorithmic tweaks, we encourage you to focus on delivering the best possible experience for users."

Guidance from Google on building high-quality sites

Google's Patent Search Likely is Not Finished

An analysis of more than 1,000 patents that Google bought from IBM offers a glimpse inside the search giant's increasingly frantic efforts to protect its Android mobile operating system against legal attacks from competitors.

IPVision, which makes patent-analyzing software, says that the 1,029 patents that Google bought from IBM in July contain little that the company could use to either attack its competitors or defend its own products.

Bundles of patents covering computing—especially mobile computing—technology have become a hot property in recent months. Apple, Nokia, Microsoft, and others have used them to extract money from competitors, or even to block those competitors' products from being sold. This year, Apple successfully prevented the sale of some Samsung devices in much of Europe, while Microsoft has used patents to extract millions of dollars in licensing fees, from companies including Samsung and HTC, for using Google's "free" Android operating system.

Google's Search for Valuable Patents

Google has no Ability to Dominate New Markets, Some Would Argue

Legislating and regulating "problems" that are just about to solve themselves is a real problem in either national economic "planning" or regulation. Most of you are too young to remember the real and serious debates and dialogues held by telecom policymakers back in the 1970s and 1980s about how to provide telephone service to "one billion people who have never made a phone call."

The daunting problem seemed intractable. But policymakers back then had no idea "mobile service" was about to revolutionize communications, making it now a silly question to worry about how to provide communications service to those billion people. These days, most people in developing regions have, or soon will have, mobile phone service.

Some might argue we more recently, in the United States, thought the Telecommunications Act of 1996, the first major reform of the U.S. telecom framework since 1934, would introduce more competition in communications, and promote innovation.

That was just about the point that the Internet, broadband, mobility and applications were about to cause wholesale changes in user experience, user expectations and the product life cycles of any number of products, including fixed line voice services.

These days, you would be hard pressed to find a highly-placed telecommunications executive who would argue that voice revenues in the future will be anything but smaller than they are today, both in the fixed line and the mobile environments.

Despite the good intentions, policymakers tried to stimulate competition in voice services right at the point that voice services were about to reach the peak of the product life cycle, and then enter the declining stage.

Some might argue that growing scrutiny of Microsoft a decade ago likewise was misplaced. Microsoft was about to hit a period when Internet-based applications were going to undermine its potential "monopoly" in any case. Regulators honestly worried that Microsoft's dominance of PC operating systems would lead to domination of browsers.

These days regulators seem to worry that Google's presence in PC-based search advertising will give it "unfair" advantage in mobile services, mobile banking or mobile advertising and social networks. There is not much evidence that Google has actually been so successful at dominating the many other potential businesses it seeks to enter, or has entered.

"While it's true that Google's stranglehold on mobile search and associated ad spending is near 100 per cent, according to recent reports, it's equally true that most of the "search" consumers do on their mobile devices isn't the kind that Google controls," the Register notes.

In fact, the common thinking now is that Facebook and other social sites are becoming the way people use search in a mobile context.

Why grill Google over web dominance? It has none