Why Google Wants to be Your Home Broadband ISP

Based on the recent announcements coming out of Mountain View, one might think that the folks at Google are in a race with Proctor and Gamble to launch new products. In one six-month period, Google has entered more new markets than it probably has entered in the last 5 years. First it was being a mobile provider (Nexus One), then becoming a TV advertiser (Google.com / Super Bowl Ads), then their entry into Social Media (Google Buzz), and now, they want to be an Internet Service Provider (ISP).

So what does this latest announcement mean? Well, there is certainly an element of publicity, but I do think they are making these moves to try and ensure a stake in the larger question of where the Internet is going and (hopefully for them), drive other carriers to improve their infrastructure / speeds. Given whom they are partnering with, and the relatively small number of potential end-users, they will not make a big dent in this space…at least on a nationwide basis (For comparison, Comcast alone has ~13M broadband subscribers), but that isn't why Google is making this move. In fact, I would postulate that they can disproprotionately influence the market simply by showing what is possible (1G speed! HD Video! Etc.) and use those successes in public discussions around Net Neutrality, etc. In this way, they hope to improve the US Internet as a whole…and by extension, the services that they can provide to Google-users everywhere.

So what are the top 5 reasons for Google becomming an ISP? Here are mine.

1) Google has lots of money, so why not experiment: This effort may costs billions, and will likely be heavily subsidized, but it won't be free (Google defines it as "competitively priced") and even so, Google has the money to burn. In fact, one of the truisms of technology is that there is only so much that can be done in a lab. Now, if that "lab" has 50,000 - 500,000 users, actively using the Internet / applications / technologies, well, you can certainly learn a lot. To a certain extent, you will only create a Disney World-like environment, but that is certainly a valuable way to learn.

2) Google doesn't want to be your ISP, they want your ISP to be better: As PCWorld correctly stated, the goal of Google is not to become the underlying broadband provider for the US, but to show what is possible from an Internet delivery standpoint.  The fact is, even if they had 500,000 customers (high end) for this experiment, they would barely be in the Top 10 of ISPs in the US. So...what is their goal? Well, I believe a main driver for this activity is that they want to "show" the world (and the FCC) how backwards the US broadband market it and try and drive its improvement. And if they succeed, Google is betting that any improvement to the Internet (especially in speed and quality) will ultimately benefit them by allowing for more and better uses of the Internet (that Google believes it will lead).

3) Don't be Evil is just a Guideline, not a rule (at least when it comes to making money): Back in September 2009, a small but very important change occurred in Google's traditional DbE rule. Specifically, on the corporate web site, Larry Page posted a document entitled Ten things we know to be true that outlined Google's official philosophy on a number of core assumptions and ideas. Most were the same as we know, but # 6 was the most interesting. Specifically, it stated "You can make money without doing evil" and then went on to outline how (shock!) Google, is a business...and like any business is out there to make money. Google Broadband (and the Nexus One, and Google Buzz, etc.) are examples of that.

4) Influence the Net Neutrality debate: Google has been one of the strongest proponents of Net Neutrality, but time will tell how successful they are on this issue. Fact is, Net Neutrality is has a lot of detractors...and those detractors are among the largest companies in the US. At best, Google may get only some broad principles approved and not real change. One way to change that trajectory? Become an ISP and show the FCC how other ISPs are BS-ing the establishment. After all, if Google can show it is possible to consistently deliver 1 Gbps of capacity to the home...why can't Comcast offer 50 Mbps? Or 100 Mbps?

5) Learn what it means to have actual customers: I don't mean to say this lightly, but Google's greatest weakness is that they don't have many customers of their own. Sure, they have millions and millions of users (me being one of them), but they don't really have many that fit the legal definition of a customer (that is: "some one who pays for goods or services"). In fact, the only real customers they have are those that pay for Google Aps or Advertisers who use AdWords to push ads to folks like you or me. In theory, this means that at any point, an individual could stop using Google and only Google would suffer. One of the great learnings that could come out of this exercise is how to directly engage with their customers, provide good customer service, and also, generate new services that are then available elsewhere. To-date, they have not done well here (see: One, Nexus)