Google, wireless and core competencies

Apparently, Google is readying a bid for wireless spectrum. They’ve got the cash to buy the spectrum, but the analysts say that they must get a carrier partner:

“Wireless spectrum and network management are nowhere near Google’s core competency. Its competence is in one market, online advertising,” said Emma Mohr McClune, principal analyst with Current Analysis.

To me, this is confusing Google’s revenue model with the things it is competent to do. Certainly, Google has proven itself quite competent in the online advertising space, and it generates gobs of revenue from there. But I can think of something else they are capable of: running a large-scale, wide-area TCP/IP network.

Google has no experience running a traditional landline or cellular phone network. The thingsis that no one wants a traditional network. They’re all trying to move to IP-based networks. Hey, and Google knows how to run one of those. Remember those rumors of Google buying up dark fiber? If that’s true, I’m inclined to think that Google is seriously considering owning a good chunk of infrastructure to provide services as it sees fit.

One thing in the original article that I linked to that does ring true: Google enjoys gigantic profit margins on its current services. Unless they have some extremely non-traditional ideas up their sleeves, competing with traditional carriers is a very low margin business. It’s going to be interesting to watch where this goes.

Maybe their real plan is just to bid up the spectrum a bit to put a squeeze on the carriers for the fun of it.