Is
Google Building Alternative Internet?
By Jim Hedger, StepForth News Editor, StepForth Placement Inc.
September 21, 2005
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Google is working on its most ambitious project to date, the creation
of a global data transfer network that could effectively serve as a
private Internet. Since the introduction of AdWords three years ago, Google
has
become the world’s largest media company and advertising vehicle.
It has grown to rival Microsoft in scope and scale. The process has
made it a fully globalized corporation.
Google has an estimated $7billion in the bank and employs many of the brightest
brains in IT. It also has a reputation for being one of the best tech firms
in the world to work for and has been known to use that reputation to headhunt
intellect from its rivals. It is focused on the burgeoning Chinese market
and appears to be performing better there than its chief rival Microsoft
is. Google has the obvious capital and intellectual resources to do just
about anything it wants to.
There are a number of reasons backing speculation that Google is building
its own global digital communications network. Google has formally entered
the telecom business with the release of a VOIP client known as Google Talk.
VOIP is an acronym for Voice Over IP, which is a synonym for Internet telephone.
In order to provide this service Google has had to acquire technical and
physical resources that, along with other assets held by the company, point
to the construction of an alternative Internet.
As Microsoft has so ably demonstrated over the past twenty-five years,
there are a number of profitable ventures found in a space monopolized by
a single mega-corporation. If that is the path Google is taking, building
the infrastructure to capitalize on it would be considered the crucial but
difficult first step. Over the past ten months, Google has been purchasing
a large quantity of redundant fiber-optic lines, (commonly referred to as
dark-fiber), in cities around the world. This fiber was laid during the
boom years of the late 1990’s but left surplus after the dot-com crash
in 2000. Speculation about Google building an alternative Internet has been
circulating since early January
2005 when Google started buying and accumulating
lots of dark-fiber.
Telecommunications industry news-source Light
Reading today reported on
some of Google’s recent real estate acquisitions. Google is leasing
large amounts of floor space in or near major telecom interconnection facilities
such as the recent leasing of about 1/10th of the rentable space at 111
8th Ave in New York, one the world’s largest telecommunications interconnection
hubs. It is also said to be in negotiations for large amounts of space at
enormous co-location centers (known as carrier
hotels) on the west coast,
with the goal of linking Google’s North American and Asian networks.
In early 2005, Google began issuing RFP notices to relevant tech firms
for the development of a DWDM fiber optics network. The RFP process ended
earlier this month and Google is now reviewing bids from multiple tech
vendors. Google is said to be planning to first establish a network in North
America
and then connect it with similar networks established in Europe and Asia.
The construction of such a network could give Google the ability to deliver
multiple branded media such as music, video, online telephone and other
Internet services to every home in the United States.
DWDM (Dense Wavelength Division Multiplexing) is a technology that exponentially
increases the carrying capacity of fiber optic cables. According to
an article in yesterday’s IPMedia Monitor (sub req.), only a handful
of the largest telecommunications providers operate commercial DWDM
networks. A small number of private DWDM networks exist but few are large
enough
to need such capacity.
Google’s need for bandwidth capacity is increasing rapidly. It currently
pays the traditional telecom firms like AT&T who own the long-haul fiber
lines a premium for bandwidth. Building its own data transfer network could
be seen as a cost savings solution, especially as it could cost as little
as $100million (in new spending) to construct one. Google already owns fiber
throughout North America and around the world. It just needs to connect
it all together.
Once connected, what could Google possibly do with a homebrewed state-of-the-art
fiber-optics system? It could develop the kind of exclusive branded environment
AOL originally dreamed of. It could capitalize on its recent innovations
to provide life-service technologies such as Google Talk (VOIP) and interactive
information resources such as local search alerts and the delivery of news,
video and music files.
According to the IPMedia
Monitor article, “… those who have
reviewed the RFP say that Google’s plans extend far beyond cost-saving
motivation, with an architecture that puts a Google-controlled hub deep
within all major metro areas.”
Google’s stated goal is to organize the world’s information.
A big part of that goal is to turn a profit while doing so. Google turns
a very tidy profit each quarter but has long been seen as too reliant on
one form of income, paid search advertising. Google draws between 90 – 95%
of its revenues from paid ads. The development of a Google operated data
transfer network would give Google any number of ways to expand the number
of productive revenue streams from 1 to 1+ more.
Then again, Google has always prided itself on its ability to organize
the world’s information and provide it free of charge to its users.
The cost of Google’s services is bourn by the advertisers. Google
might simply be exponentially increasing its online real estate inventory
by enticing hundreds of millions of new registered users to take a look
at whatever it is they are creating. Assuming it is the coolest thing on
the block when released and is faster and cheaper than its competitors (as
most of Google’s new products tend to be), many of those new users
will choose to stick around to use the services offered by a Google branded
network.
Google appears to be preparing to become the world’s greatest data
delivery vehicle. Perhaps this phase of Internet history will be summarized
with the neo-business aphorism, “If you can’t beat them and
you can’t join them, you can just make your own reality and make lots
of money over there.” Google has $7big in the bank, much of it being
investor money. From all accounts, it is preparing to light up and connect
millions of miles of dark fiber, starting in North America possibly as early
as the first quarter of 2006. Today we wire America. Tomorrow we wire the
world. On Saturday, we’ll do
bunch.
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