According to a report in The Information (via Android and Me), the search king plans to supply businesses with low-cost Wi-Fi equipment for enabling broadband access at retail locations and the like. A recent deal with Starbucks to power Wi-Fi at its various locations could serve as a template for others.
Why should Google investors care? Tim says it's a sneaky way to build a comprehensive broadband infrastructure without incurring the hefty capital costs of a national Google Fiber network. Retailers benefit by giving customers reason to hang around their shops longer, increasing the odds of spending on higher-margin snacks and drinks.
Meanwhile, Google is also rallying behind Netflix in its fight to preserve net neutrality. In a post at its Google Fiber blog, director of engineering Jeffrey Burgan said the company provides "free access to space and power" for those shipping content around the Web. "Since people usually only stream one video at a time, video traffic doesn't bog down or change the way we manage our network in any meaningful way–so why not help enable it?" Burgan wrote.
The message: Google doesn't want a tiered, heavily managed Internet where Netflix pays Comcast for direct access. Instead, CEO Larry Page wants unfettered, high-speed access for anyone who wants to get online. That probably means disrupting the existing cable and Internet incumbents. Giving businesses low-cost Wi-Fi equipment looks to be a small step in that direction.
Now it's your turn to weigh in. Do you see Google-supplied Wi-Fi and Google Fiber disrupting the existing broadband infrastructure? Why or why not? Please watch the video to get the full story and then leave a comment to let us know your take, including whether you would buy, sell, or short Google stock at current prices.
Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Google (A and C class) and Netflix at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.
The Motley Fool recommends Google (A and C shares), Netflix, and Starbucks. The Motley Fool owns shares of Google (A and C class), Netflix, and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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