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Outlandish Google Rumor Of The Day: Google To Buy SprintOutlandish Google Rumor Of The Day: Google To Buy Sprint
What good are Monday mornings without serving up some fantastical new rumor? Today's tasty dish? Google is looking to buy Sprint. Why would Google do such a thing? To get its hands on Sprint's WiMax spectrum and avoid the FCC 700 MHz auction altogether.
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What good are Monday mornings without serving up some fantastical new rumor? Today's tasty dish? Google is looking to buy Sprint. Why would Google do such a thing? To get its hands on Sprint's WiMax spectrum and avoid the FCC 700 MHz auction altogether.That Google has its eye on the mobile market is obvious. If last week's Android mobile platform announcement didn't convince you, perhaps re-reading some of Google's actions regarding the upcoming FCC 700 MHz auction will refresh your memory. Bottom line? Google wants in. Badly. After all, there are gobs of untapped advertising dollars to be made on today's Internet-connected mobile phones, right?
How would buying a telecommunications company help Google do that? Well, having a carrier all to itself would certainly give it a leg up, but that would likely create other, bigger headaches for Google.
Rich Tehrani, who seems to be the one behind this rumor, outlines why such a move would cause turbulence for Google. He writes:
* Google gets into the messy business of telecommunications. I don't mean to say Google's day job is easy, but the telecom market gets it involved with government agencies like the FCC on a more regular basis. Like many other large telcos, the company will have to spend more and more money lobbying and technology differentiation may be less important than government regulations in ensuring future success.
* Getting seriously into the telco business and having a corporate motto "Don't be Evil," may be tough to pull off.
* Retail stores. Google's investors love the fact that Google has a massively scalable business model which can grow with the addition of servers. Imagine if Google had a slew of retail stores to deal with around the country (or world?). Google's valuation would likely take a major hit.
* Open Handset Alliance: One would imagine if Google owns its own network, other network operators would not be too happy to be part of the OHA. This could slow progress for Google getting on the handsets of other wireless service providers.
* A purchase of Sprint Nextel would make Verizon and AT&T go crazy and they would make life even more difficult for the search leader. Could they make life any more difficult than they do today? Maybe.
Tehrani makes some good points. In Tehrani's full post, he briefly explores the WiMax spectrum idea. I think the spectrum licenses and network would be the real reason for Google to make any sort of telco purchase. Not that buying Sprint in its entirety would be cheaper than shelling out $4.6 billion or more in next year's 700 MHz auction, but it would give Google the network infrastructure already in place, rather than leave it with the unenviable task of having to build its own.
Though Google appears to be making bolder and bolder moves in its quest for power, I'd file this rumor in the way-too-early-to-tell category.
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