Google is planning
on floating another $4 billion in shares. The
question then becomes, with reserves of over $2 billion,
what does the company want with the extra cash?
This article provides my own speculation and insight
and it might surprise you.
Google. Currently trading at close to $300 per
share.
The company has an $83 billion market cap making it
one of the most valuable companies in North America,
almost double the value of Yahoo! And almost 4 times
the value of General Motors.
With this kind of valuation, what could Google have
up its sleeve? After all they are reported to
have over $2 billion in cash reserves alone. You
d think with that kind of cash on hand they could do
almost whatever they wanted. So why add an additional
$4 billion to that pot?
What could Google be after that's worth more than $6
billion? Well, I have some ideas.
But before I go there, let's look at some of the things
Google is doing now.
The company recently launched Google Talk their own
version of an IM program.
They've also been looking into other areas of communication
as well, such as hunting out dark fiber. That
is, fiber optic cabling that is unused.
They've also been active in the areas of social networking
and personalization. And we all know about Gmail,
Froogle and Google News. These are just some of
the areas Google has been moving into. They are,
as we in the industry call them, verticals.
But that's not all that Google is interested in.
While they make sense, I think Google is just scratching
the surface of their potential.
In order to understand what I m talking about we must
first review Google's mission statement:
Google's mission is to organize the world s information
and make it universally accessible and useful.
So, how does Google go about making all the world's
information accessible and useful? Well it's a
good start that they have a hyper active crawler that
not only indexes pages, but also images, audio and video
files. In addition, Googlebot can index text files,
Microsoft documents such as Word and Excel documents,
PDF's and more.
I think they've pretty much covered the organize
part of the mission statement. Sure there are
more file types and sources out there, but Google finds
more and more of them every day.
Let's skip to the last point - useful .
I'll save accessible till later.
In order to make it useful, Google must present it in
such a way that the user is exposed to as much of it
as possible, yet it has to be relevant to the user.
And they have been working on this for quite some time.
Now you may notice you not only see the usual paid and
organic results, but in some cases you see definitions,
Froogle results and more.
And more recently we are beginning to see other forms
of vertical results show up in the regular
organic results. These are results where Google
is suggesting other potential matches to your query.
All in all, I'd say Google has a pretty good handle
on presenting useful results. Sure it can get
better, and I think it will. In fact Google MUST
get better in order to stay ahead of the pack.
So, I've covered the organize and
useful now its time to talk about the accessible
and this is where my speculation starts.
Remember at the beginning of this article I said I wondered
what Google needed $6 billion for?
What I'm about to write here may surprise some, but
not others.
I think Google wants to move into the next generation
of the web the wireless web. And how
they are going to do it is by buying a struggling wireless
provider.
The wireless provider I'm thinking of is T-Mobile.
Just let that sink in for a moment. T-Mobile is
the company that uses Catherine Zeta-Jones in their
TV commercials.
Why T-Mobile?
Well, for one, the parent company, Deutsche Telekom
is not satisfied with how the company is doing in the
US. They have even hinted that they may sell the
company.
Google recently signed a deal with T-Mobile to provide
web services for the company. Google also recently purchase
a company called Android, which makes wireless phone
software and who's founder also developed a device called
Hiptop which is sold by T-Mobile. Coincidence?
I think not
And a quick evaluation of Deutsche Telekom indicates
that the US subsidiary (T-Mobile) is indeed worth about
$6 billion.
It has been common knowledge the past few months that
Google is investing heavily in wireless technologies.
Android is just the latest in a string of purchases
centered on wireless and the emerging possibilities
it holds.
Even if Google doesn't buy T-Mobile, they will still
be in a position to offer a hybrid wireless/broadband
communications system capable of allowing transitions
between wired/wireless technologies.
Combining wireless/wi-fi technology into a fiber optic
network makes perfect sense for Google. Imagine
having a Google cell phone for which the monthly fees
are minimal and having the phone be smart enough to
switch to a local wi-fi hotspot with fiber connection
allowing for national and international calls at a fraction
of the cost. Google would crush the competition.
And like I said, the infrastructure for this is either
in place (in other words, Google already owns the technology)
or will be shortly (in that they are developing and/or
purchasing it).
Really, the whole delivery of results is the only place
Google is lacking. Without an internet connection
and computer you can't access Google. Therefore
Google wants to put Google in the palm of your hand.
And what better way to do that than offer a cheap/free
cell phone with international calling capabilities?
And all you have to put up with is some unobtrusive
advertising.
And think of that what would an advertiser
pay to have a captive audience? No longer would
the advertiser have to pay for broad keyword matched
advertising. Through geo-targeting and demographic
profiling the advertiser would be able to target his
ads at the right age group in the right location, carrying
a Google cell phone.
Really, I'd put up with a few ads for a free phone with
virtually unlimited long distance. I can tune
out TV ads now, and I all but ignore PPC ads, so I'm
sure I can ignore the cell phone when it beeps indicating
a new ad.
Now I'll grant that this is extremely speculative.
Perhaps T-Mobile isn't the target, but I m pretty confident
that someone in the market is.
In any case, if you have other ideas, or would like
to share your speculation, please leave a comment.
About
the author:
Rob Sullivan - SEO Specialist and Internet Marketing
Consultant. Any reproduction of this article needs to
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