How Google Plans To Turn A Profit On Kick Arse Gigabit Fibre -- Maybe

Sometimes with all of Google's highfalutin talk about making the world's information useful, it's easy to forget that it's a business. GigaOm reports that the Google fibre "experiment" in the US is no exception. It's not infrastructural charity. It's a money-maker. Or at least it could be.

On paper the economics of Google Fibre seem a little precarious. Google spent unknown billions installing the network only to deliver unheard-of Gigabit speeds for just $US70 a month. What's more, it's offering residents of Kansas City 5Mb/s fibre service for free. GigaOm spoke with top Google execs and other sources and explains the smart business moves that not only make the product better for consumers but also better business for Google.

  • Building its own gear: Rather than turn to an outside vendor for its network boxes, Google cut costs on gear by engineering them from the ground up. Building custom gear means it's not paying for any extraneous features, and also allows Google to precisely tweak and update the hardware to the exact needs of its network design.
  • Getting people excited: Google worked with local government and other companies to get the mainlines of the network installed, but if customers want Google Fibre they're going to have to fight for it. Google divided the city up into "fibrehoods" and wants to get five to 25 per cent of households in each to commit to Google Fibre before sending out technicians. The Fiberhoods with the most commitment to the service get it first.
  • User installation and service: You know what sucks about your ISP's service? Everything. But the worst part is waiting two weeks for a technician to show up and install your gear, or, worse, waiting two weeks for them to show up and fix something that doesn't work. Google's network boxes are outfitted with QR codes that will eventually allow users to install and perform maintenance on their own. What's more, as with the Nexus 7 tablet, Google might even eventually start selling the boxes and service on Google Play. Imagine never talking to a customer service rep again. Sounds good.

Of course, we have no idea how long it will take Google to recuperate its investment on Google Fibre, and many of these cost-cutting measures are still in the works. Still, it's nice to hear that delivering what appears to be a superb product to consumers is something that might actually make a company money. Crappy ISPs beware. [GigaOm]


Comments

    So can any Australian Giz reader honestly say they don't want the NBN now? Because that's the only chance we have at getting close to a service like this in the future. Unfortunately ours won't be $70Us a month for an unlimited 1gbps connection, but at least we kow there will be the capacity for 1gbps down the line without any rewriting required.

    go Google...your an innovator and we love you and your products!

      +1.. sort of... I'm not a massive fan of Google, but this is great and the way they are executing it sounds excellent, particularly where the highest demand gets built first. Great way to start generating revenue. With things like this happening OS, hopefully it'll start shutting a few people up about the NBN and give them something tangible to base their facts on. If one of the worlds biggest tech companies is willing to finance this themselves, then there has to be some good business sense for anyone else doing similar (ie our government)

    I wish Telstra made their own hardware rather than outsource it and you're stuck with a paper weight you paid 10 bucks in shipping for, because it seems like it's designed poorly.

    "Sometimes with all of Google’s highfalutin talk about making the world’s information useful, it’s easy to forget that it’s a business. GigaOm reports that the Google fibre “experiment” in the US is no exception. It’s not infrastructural charity. It’s a money-maker. Or at least it could be."

    So much FUD in that paragraph it's hard not to gag. Of COURSE they'll make money, they're charging for it, no-one's claiming otherwise. Google is merely providing a service in Kansas City that no-one else is offering and far below any comparable competition.

    I say good for them, greedy ISPs have had consumers by the balls for years. It's overdue that someone with the clout and resources can feasibly challenge them and upset the status quo.

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