No, Google Fiber is not a new breakfast cereal. It is, however, the newest competitor to Verizon, AT&T, Comcast, and Time-Warner in the Internet and TV services market. Google, who has plenty of cash, (they’ve recently surpassed Microsoft as number one) is a serious competitor too.
So where does the comparison to Walmart come in? Many years ago when Walmart, the discount retail store, was just starting to grow, their competition was Kmart, who was much larger, nationwide, and formidable. Walmart knew that Kmart’s strategy was to place stores only in larger markets. That left the small and medium-sized towns un-serviced by any national discounter. Kmart deemed them of low levels of profit potential. Walmart reduced their cost of operations and expanded those small and medium markets and were wildly successful, eventually eclipsing Kmart and all other competitors.
Google Fiber is headed along that same strategy. They’re plan is to provide service across the mid-section of the country, much of which has been skipped by the existing Internet and Cable TV providers because the low density of customers in rural areas won’t support the investment of burying cable in those areas.
Image courtesy of Mashable.com
Google has already cut their cost by building their own electronic components instead of purchasing them as the competitors do. They also plan to reduce costs by stringing cable above ground using existing telephone poles rather than burying the cable which is much more costly. They also have the capability to place fiber and service in any area that can get 300 subscribers together, called “fiberhoods”. Google has set up websites to motivate neighbors to encourage each other to sign up.
And if all that cost-cutting and innovation isn’t enough to make them successful, they offer speeds up to a Gigabit per second (that’s 1 million bits each second). That’s 100 times faster than typical U.S. broadband connections.
So, is Google taking a page from Walmart’s hugely successful strategy of moving into areas not serviced by the market leaders? Perhaps.
An added bonus to providing broadband speeds and connections to low population areas is that it will draw businesses to the area for the cheap labor and overall lower cost of doing business…now that high-speed Internet access, the life-blood of commerce these days, will be available.
Reference: Mashable.com article
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