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What will Google do
with $4 billion?
Google is planning on floating another $4 billion in shares. The question
then becomes, with reserves of over $2 billion, what does the
company want with the extra cash? This article provides my own
speculation and insight and it might surprise you.
Google. Currently trading at close to $300 per share.
The company has an $83 billion market cap making it one of the most valuable
companies in North America, almost double the value of Yahoo!
And almost 4 times the value of General Motors.
With this kind of valuation, what could Google have up its sleeve? After all
they are reported to have over $2 billion in cash reserves
alone. You’d think with that kind of cash on hand they could do
almost whatever they wanted. So why add an additional $4 billion
to that pot?
What could Google be after thats worth more than $6 billion? Well, I have
But before I go there, let’s look at some of the things Google is doing now.
The company recently launched Google Talk – their own version of an IM
They’ve also been looking into other areas of communication as well, such as
hunting out dark fiber. That is, fiber optic cabling that is
They’ve also been active in the areas of social networking and
personalization. And we all know about Gmail, Froogle and Google
News. These are just some of the areas Google has been moving
into. They are, as we in the industry call them, verticals.
But that’s not all that Google is interested in. While they make sense, I
think Google is just scratching the surface of their potential.
In order to understand what I’m talking about we must first review Google’s
Google’s mission is to organize the world’s information and make it
universally accessible and useful.
So, how does Google go about making all the world’s information accessible
and useful? Well it’s a good start that they have a hyper active
crawler that not only indexes pages, but also images, audio and
video files. In addition, Googlebot can index text files,
Microsoft documents such as Word and Excel documents, PDF’s and
I think they’ve pretty much covered the “organize” part of the mission
statement. Sure there are more file types and sources out there,
but Google finds more and more of them every day.
Let’s skip to the last point - “useful”. I’ll save “accessible” till later.
In order to make it useful, Google must present it in such a way that the
user is exposed to as much of it as possible, yet it has to be
relevant to the user. And they have been working on this for
quite some time.
Now you may notice you not only see the usual paid and organic results, but
in some cases you see definitions, Froogle results and more.
And more recently we are beginning to see other forms of vertical results
show up in the “regular” organic results. These are results
where Google is suggesting other potential matches to your
All in all, I’d say Google has a pretty good handle on presenting useful
results. Sure it can get better, and I think it will. In fact
Google MUST get better in order to stay ahead of the pack.
So, I’ve covered the “organize” and “useful” now its time to talk about the
“accessible” and this is where my speculation starts.
Remember at the beginning of this article I said I wondered what Google
needed $6 billion for?
What I’m about to write here may surprise some, but not others.
I think Google wants to move into the next generation of the web – the
wireless web. And how they are going to do it is by buying a
struggling wireless provider.
The wireless provider I’m thinking of is T-Mobile.
Just let that sink in for a moment. T-Mobile is the company that uses
Catherine Zeta-Jones in their TV commercials.
Well, for one, the parent company, Deutsche Telekom is not satisfied with
how the company is doing in the US. They have even hinted that
they may sell the company.
Google recently signed a deal with T-Mobile to provide web services for the
company. Google also recently purchase a company called Android,
which makes wireless phone software and who’s founder also
developed a device called Hiptop which is sold by T-Mobile.
Coincidence? I think not
And a quick evaluation of Deutsche Telekom indicates that the US subsidiary
(T-Mobile) is indeed worth about $6 billion.
It has been common knowledge the past few months that Google is investing
heavily in wireless technologies. Android is just the latest in
a string of purchases centered on wireless and the emerging
possibilities it holds.
Even if Google doesn’t buy T-Mobile, they will still be in a position to
offer a hybrid wireless/broadband communications system capable
of allowing transitions between wired/wireless technologies.
Combining wireless/wi-fi technology into a fiber optic network makes perfect
sense for Google. Imagine having a Google cell phone for which
the monthly fees are minimal and having the phone be smart
enough to switch to a local wi-fi hotspot with fiber connection
allowing for national and international calls at a fraction of
the cost. Google would crush the competition.
And like I said, the infrastructure for this is either in place (in other
words, Google already owns the technology) or will be shortly
(in that they are developing and/or purchasing it).
Really, the whole delivery of results is the only place Google is lacking.
Without an internet connection and computer you can’t access
Google. Therefore Google wants to put Google in the palm of your
hand. And what better way to do that than offer a cheap/free
cell phone with international calling capabilities?
And all you have to put up with is some unobtrusive advertising.
And think of that – what would an advertiser pay to have a captive audience?
No longer would the advertiser have to pay for broad keyword
matched advertising. Through geo-targeting and demographic
profiling the advertiser would be able to target his ads at the
right age group in the right location, carrying a Google cell
Really, I’d put up with a few ads for a free phone with virtually unlimited
long distance. I can tune out TV ads now, and I all but ignore
PPC ads, so I’m sure I can ignore the cell phone when it beeps
indicating a new ad.
Now I’ll grant that this is extremely speculative. Perhaps T-Mobile isn’t
the target, but I’m pretty confident that someone in the market
In any case, if you have other ideas, or would like to share your
speculation, please leave a comment.
About the author:
About the author:
Rob Sullivan - SEO Specialist and Internet
Marketing Consultant. Any reproduction of this article needs to
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