Saturday, 1 April 2006

Implications of the Google-Sprint merger

Like just about everyone else in the tech industry, I was caught off guard by Google's announcement late yesterday that it's acquiring Sprint. We all knew Google was interested in the wireless market, but I don't think anyone expected it to make a move this big, this quickly.

In retrospect, though, I think the deal was kind of obvious.

Google can compete with the wireline phone companies and the cable TV companies by offering municipal WiFi networks. It didn't have to acquire companies in those spaces. But WiFi mobile phones aren't ready for prime time – there are too many holes in the network coverage. Google needed a play in the mobile operator space. By combining its WiFi offerings with Sprint's mobile network, Google will be able to offer comprehensive communication and data services that can't be matched by any other company.

The press release was pretty sparse on details, but I loved the statement that we'll be able to use a single Google ID to receive phone calls, e-mail, and instant messages anywhere in the country. I like its commitment to offer unlimited flat-rate voice and data. And I was thrilled by Eric Schmidt's promise that Google's mobile data network will be open to any application from any vendor.

It'll be very interesting to see how the competitors react. Is Yahoo going to buy Cingular? I have to assume that Microsoft will feel obligated to buy an operator as well, but without the other Web properties that Google owns, Microsoft will find it very hard to match Google's scope and synergies.

I also start to believe the rumors about AT&T buying Comcast. They'll need it to compete with Google across the board.

It will also be interesting to see what happens to the handset companies. I don't believe Google or Yahoo will be willing to accept mobile phones whose user interfaces are as cluttered and confusing as the ones on the market today. Well, maybe Yahoo would.

The biggest downside of the Google-Sprint deal is that today is April Fool's Day, and I fabricated the whole thing. None of it's true.

Not yet anyway.

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