Rumors mount over Google's internet plan
The Times Online out of London reports that Google is working on a project to create its own global internet protocol (IP) network, a private alternative to the publicly available world wide web that it presently dominates for content search. According to the article Rumours Mount Over Google’s Internet Plan written by Benjamin Cohen, CEO of pinknews.co.uk, Google is actively purchasing dark fiber communication lines to complement its recently purchased “270,000sq ft telecom interconnection facilities in New York. It is believed that from here, Google plans to link up and power the dark fiber system and turn it into a working internet network of its own.”
This Times Online article highlights a November 2005 report The Google Box: Taking over the digital world four ounces at a time written by Robert X. Cringley. The article states “Google was buying shipping containers and building data centers within them, possibly with the aim of using them at significant nodes within the worldwide cable network. ‘Google hired a pair of very bright industrial designers to figure out how to cram the greatest number of CPUs, the most storage, memory and power support into a 20- or 40-foot box,’ Robert Cringely wrote. ‘The idea is to plant one of these puppies anywhere Google owns access to fiber, basically turning the entire Internet into a giant processing and storage grid.’”
The article continues with information about the “Google Cube,” the much-talked about Google personal computers that might retail for less than $100 per machine. These are “likely to be low-grade machines that require a connection to Google to be able to perform functions such as word processing and spreadsheet manipulations. While using the computers, it is understood that consumers will be shown personalised advertising from the company's AdWords network.” These machines are also rumored to be less like today’s standard home PC and more like a television. “While offering the standard PC applications, the "Google Cube" will also offer interactive content from a variety of sources while retaining Google branding and displaying Google advertising. A leading content provider, who did not wish to be named, told Times Online: "We are in discussions with Google to provide content for their alternative internet service, to be distributed through their Google Cube product. As far as I'm aware they have been conducting negotiations with a number of other players in our marketplace to provide quality content to their users."
These various reports prompted analysts at Bear Stearns to note late last year: "We think Google could be experimenting with new hardware endeavors that could significantly change potential future applications by Google, creating another advantage for Google over its competitors. Investors may currently under appreciate Google as a potential hardware company." Toomre Capital Markets agrees that investors may well be under estimating Google and wonders how this information should be incorporated into Google valuation models. Quite frankly, we are at a loss here. Thoughts?