Over the past several months, Google Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) has launched a series of strategic initiatives to better compete in the rapidly shifting war for the living room. The latest news is that Google has acquired a small wireless start-up, which sounds innocent enough. Google has been reluctant to offer too many details other than confirming the takeover. Presumably, the deal is the most recent example of Google's desire to build out its ultra-high speed Internet service to connect its wide array of in-home devices.
Google has fired several shots in the war for the living room recently, and this is just the latest one. It appears that Google is getting serious in the fight for control of your home.
Google's high-speed Internet service known as Fiber is miles ahead of competitors like AT&T, (NYSE:T), and its recent acquisition brings it one step closer to you. Here's the opportunity Google is pursuing, and what its ultimate intentions could be.
Google fires a shot
Google announced it has acquired wireless communications start-up Alpental Technologies for an undisclosed sum. The acquisition marks Google's intentions to expand delivery of its extremely fast Fiber Internet, as Alpental was developing a high-speed service with 60GHz band.
The move brings Google one step closer to branching out Fiber across the U.S., which is still in the early stages. Fiber has had to overcome many hurdles so far. One of which is cost. Importantly, Alpental's technology is described as ultra-low power, according to the company. Google's Fiber expansion efforts have been hindered thus far by the cost of building out the necessary infrastructure for such high-speed service.
Buying Alpental to boost Google Fiber makes a lot of sense, since the quality of Internet service in the United States is still shockingly low. A recent survey conducted by broadband testing and network diagnostic company Ookla Speedtest found the U.S. ranks 31st in the world in fastest download speeds, behind Estonia, Hungary, and Slovakia. As a result, it's abundantly clear that there's a significant opportunity in the realm of high-speed Internet, and Google intends to pounce.
And, for all intents and purposes, Google is still way ahead of anyone else. AT&T recently announced its intentions to bring its GigaPowerSM broadband service to as many as 100 cities across the country. Its service promises the same speed as Google Fiber. But Google has the technological prowess and first-mover advantage over AT&T, which currently offers GigaPowerSM in only one city.
Google's grand ambition
But Google has much more ambitious plans in mind. Recall that earlier this year Google bought smart thermostat and smoke detector company Nest for $3.2 billion, in a deal that was widely mocked in the financial media. It seemed curious to say the least that Google would pay so much for smoke detectors and thermostats. What many seemed to miss are Google's much broader intentions.
Google wants control of as many home devices as possible, and its acquisition of Alpental represent another step in controlling the connectivity as well. In a sense, it envisions a world in which every household is filled with Google-powered smart devices.
That would give Google a significant presence in the Internet of Things, which describes the potential for millions of every day devices to communicate with each other. With Alpantal and Nest on board and its Fiber service on the brink of expanding nationwide, Google is well-equipped in both devices and services.
The war for the living room evolves
Google has unveiled a series of acquisitions and investments in recent months that make it clear it wants to dominate the home. Google is by no means just a search engine anymore. It offers an array of devices, and intends to complement its own devices with superior connectivity as well.
The latest move is to acquire wireless communications start-up Alpental, to try to bring its blazing-fast Fiber Internet service to more place in the United States. There's a clear opportunity here, since Internet in the U.S. is still frustratingly slow. And, if its technology gains traction, Google will be able to integrate its other smart devices throughout the home, such as its streaming device and smart thermostats and smoke detectors.
If it's successful, Google might not just win the war for the living room. It might win the war for the home.
Bob Ciura has no position in any stocks mentioned. The Motley Fool recommends Google (A shares) and Google (C shares). The Motley Fool owns shares of Google (A shares) and Google (C shares). 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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