Google wants to usher in the world of wireless broadband so much that it is willing to spend vast sums to make it happen. It bid more than $4.6 billion in the recent FCC spectrum auctions (which it ended up not having to pay because it lost to Verizon), is backing the WiFi 2.0 initiative, and today it announced that it plunked down $500 million to shore up the new Clearwire-Sprint WiMax business.
Google is very clear about why it invested—to ensure that the resulting broadband network is as open as possible and accepts Android handsets and devices. It also sounds like Google may also be the default search engine on devices connected to the network.
This morning, it explains all of this on the Official Google Blog:
In addition to our $500 million contribution as part of the investment group, we will provide search and applications to the network’s users, and will work with Clearwire to offer additional services and applications. This will include jointly creating an open Internet protocol to work with mobile broadband devices (including Android-powered devices) and implementing other open network practices and policies.
We believe that the new network will provide wireless consumers with real choices for the software applications, content and handsets that they desire. Such freedom will mirror the openness principles underlying the Internet and enable users to get the most out of their wireless broadband experience. As we’ve supported open standards for spectrum and wireless handsets, we’re especially excited that Clearwire intends to build and maintain a network that will embrace important openness features. In particular, the network will: (1) expand advanced high speed wireless Internet access in the U.S., (2) allow consumers to utilize any lawful applications, content and devices without blocking, degrading or impairing Internet traffic and (3) engage in reasonable and competitively-neutral network management.
Google desperately wants access to future wireless broadband networks of all stripes and sizes,but it wants to avoid having to build and operate its own. Deals like this show that it is willing to pay to play. If Clearwire should ever go bust, though, that’s $500 million down the drain.
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$500 million? Google found that between the cushions of the sofa.
Or Google scrapped up its pocket change and found $500 million. Google is, without a doubt, an innovator and the Carnegie of search engines and the Internet.
It is in the interest of everyone including you and me, not just Google, to make sure that wireless broadband remains open. I wish google succeeds in its plan. Let us pray that wireless broadband is not controlled by some monopolies. $500 million seems like a big bet. May be not for Google.
I’d rather they waste $500 Million on a Clearwire bet, than $1.6 Billion on a video site that hosts (pirated) content.
Erick,
This is a minor insurance investment in open wireless at worst for Google. If it works out, great. Should it fail, small insurance investment lost.
Google’s stock is up so far this morning, hence investors aren’t concerned. Neither should you or anyone else at TC for that matter.
They also invested in Spain-based FON, a company that runs a system of shared wireless networks.
Let’s hope that not just any hardware and any software can be open, but any service provided is open as well. Default anything doesn’t provide choice, although if there is any default search at this point, I’d rather it be Google.
Google is a pretty impressive competitor.
It would be a real question if google invested not..
With Sprint as a player in Clearwire, I feel that Google did take a bit of a risk investing in this particular venture. However, if Clearwire is successful it will be a great investment. Anyone out there have $500M to gamble with? Perhaps Google has better information on the stability of the venture.
“If Clearwire should ever go bust, though, that’s $500 million down the drain”
For a company that stores $10b in cash, and spent $1-3 billion in acquisitions, $500m would be like five pennies.
If they get it right, that’s good for Google, if they’re bust, Google still loses less than a billion. Bah!
Sounds cool, as long as we’re not forced to use Google widgets.
It bothers me Google is pushing iGoogle and these widgets but they don’t stand behind them enough to ensure they are safe, according to their own disclaimer they don’t vouch for their own widgets.
I know this is a little OT, but I had to clarify. This is from iGoogle, their new (artsy) widgets homepage/desktop:
“Google makes no promises or representations about its performance, quality, or content.”
“If Clearwire should ever go bust, though, that’s $500 million down the drain.”
Why such a hater? Between this and the other post, seems like you have zero faith in what really is such a promising technology. I’m gonna take a wild stab in the dark and say Google & Intel are smarter than Erick Schonfeld. I could totally be wrong on that, and TechCrunch may have the next Gates, Zuckerberg, or Brin working for them, but hmmm…. I gonna throw my chips on “No”. They know what they are getting into. Intel has pretty much staked it’s reputation on this considering the billions of dollars they’ve spent and the companies they’ve lobbied. If WiMAX succeeds, it will expand to developing nations and the Intel OLPC type laptop will become even more attractive. Jackpot for Intel. Google is investing simply because it offers another entry point for devices on the internet. Hell, I wouldn’t be surprised to see them sell off their shares once this becomes self-sustaining. This isn’t an investment for monetary gain for Google, it just ensures that there is at least 1 “open” wireless entry point, and that is their main concern right now.
Clearwire won’t go “bust”, Clearwire may not meet high expectations, but I 100% guarantee Clearwire & WiMAX won’t go “bust”.
Can we have Duncan back?
Nice…
Mike Skupin is #1
I gotta agree with Derek… at least in the idea that it won’t go bust.
Sprint, WiMax, Intel, Google… Sprint may have been in the dumps for a while, but it’s not run by idiots… not entirely. As a former Sprint Employee, I gotta say I like what they’re doing… and I’ve seen them do some dumb stuff.
Please hurry …. my EVDO is expensive and there is a ton of innovation to occur in the wireless broadband space. EVDO is good, but not mass market due to cost. Im excited about all consumer devices becoming wireless broadband ones!
Google sure does use that word “open” a lot, and in the mobile space it’s no different.
I wish things were open on wireless airwaves, but somehow I don’t feel that Google is really all that interested in openness after they are the default provider of a bunch of services in the wireless space.
It’s probably better than the status quo, but call me skeptical. The whole “frying-pan/fryer” reference comes to mind.
“Clearwire won’t go “bust”, Clearwire may not meet high expectations, but I 100% guarantee Clearwire & WiMAX won’t go “bust”.”
I’ll bet there are plenty of people who said that about - http://tinyurl.com/4uaf5g
It’s an awfully conflicted investment group on this deal - although I agree with most of the posts that you have to admire and cheer that Google is putting their money behind their efforts to encourage open networks - hope it works.
Pocket change for google
WiMAX was all the rage back in 2005. It is 2008, i have seen only one WiMAX mobile device. One. In comparison, in Korea, they have WiBro setup already. People can sign up for 22 bucks a month for unlimited download. They can even access it on their subway systems (yes, they even have an efficient subway system there). WiBro was setup by one telecom company, KT, not an orgy of companies with their own selfish interests. Also, WiBro was setup only in Soeul. I don’t get why WiMAX needs to roll out with a nation wide strategy while it can start rolling out in a metro area.. (oh, maybe the bay area?).
Clearwire is a terrible service. I want to hear from one user who actually likes the service they offer. Google the words “clearwire sucks” and see how people really feel about this brand.
@ Derek, Why so unquestioning? By your logic, anything Google or Intel touches can’t fail.
And, oh, Intel actually backed away from this deal. It only put in half of what it was originally asked for last year. And Google had to be pulled in kicking and screaming.
Even if Clearwire goes bust, this new company owns a big big swath of valuable spectrum. As we wrote earlier, much more spectrum at 2.5 GHz than at 700 MHz, so that alone is worth at least what the new investors put in.
” …I don’t feel that Google is really all that interested in openness after they are the default provider of a bunch of services in the wireless space.”
Yep….right on the money…
And how open is it when
Google basically paid $500m to ensure that the masses are forced to use Google…..aka…”Google may also be the default search engine on devices connected to the network.”
You know for sure that any Google Android device will have a great user interface…except perhaps for the portion that allows someone to attempt to change the default search browser!
There is more to this than just ensuring open access. Google’s massive investment in the back-haul network and their data center build-up is ensuring that it is always a couple of hops away from users, and can deliver super-fast connectivity on the back-haul. If they get access to the last mile (WiFi, White-Band, WiMax, some other way), deliver a few telephony apps and couple it with their with presence and other services, you pretty much have the nuts and bolts of a new operator. Would they get into selling services directly? Maybe, maybe not. They could just as easily have thousands of neighborhood entrepreneurs who will pop-up as micro-operators selling services (subscription based, ad-based, as part of some other business).
That would be when 21st century telcos start to bring down 20th century telcos. Don’t hold your breath though; this is a long show!
More at my blog: http://feeds.feedburner.com/TheUnfoldingMirror
here in belgium clearwire needs to sort out their sh*t a bit better. they have ridiculous salesmen flyering lamppost and leaving business cards in burger joints saying “call me for really cheap internet”. they’re all slick salesmen looking douchebags that will tell you anything to get their i-signed-up-another-customer bonus.
when you then visit their offices to create an account (yes you have to physically go to their office), there is one lazy ass guy handing out routers and the” waiting room” looks worse than a backstreet dentist in new delhi. and then ofcourse … there is hardly any reception anywhere in brussels. simply an atrocious company, here in belgium at least.