|
contents | business | |||||||
| Google's in with WiMAX Consortium by Caroline Dangson, IDC On May 7th, Sprint Nextel Corporation and Clearwire announced a new $14.5 billion venture that would renew Sprint's ambitions to build a national mobile network utilizing WiMAX technology to bring faster wireless Internet service (up to 70 Mbps) to an area that covers several miles (up to 30 miles). Sprint first announced plans to create a mobile WiMAX network more than two years ago, however, challenges facing its cell phone business and acquisition of Nextel have distracted the company from the project. The new venture brings together Clearwire and Sprint's WiMAX spectrum and networks with XOHM, Sprint's WiMAX services business unit. The new company, called Clearwire, will also include a $3.2 billion investment from Comcast, Time Warner Cable, Intel, Google and Bright House Networks. Sprint will have a 51% stake in the venture, while Clearwire will own 27% and other investors will each get a piece of the remaining 22%. The diverse nature of the consortium's members (cable operators, chip maker, Internet search company, etc.) illustrates the growing importance of the mobile Internet and its future convergence with telecommunications, and media and entertainment services. In this IDC Link, we briefly write about the importance of WiMAX to Google. A lengthier piece, co-authored by Amy Harris Lind and Godfrey Chua, will follow this week discussing the implications of Sprint and Clearwire's new venture and its impact on the WiMAX market in the United States. So what's in it for Google to be a part of WiMAX network development? Google's goals with WiMAX, we believe, are related to those it pursued in the 700 MHz spectrum auction. There, Google convinced U.S. regulators to require open access for the 700 MHz spectrum, a spectrum WiMAX might use, although Sprint and Clearwire's WiMAX networks currently utilize 2.5GHz spectrum. In addition, Google recently unveiled brand-image mobile search ads to further evolve its mobile search ad offerings and will launch its open-platform operating system Android later this year. Clearly, Google sees major business opportunities in the mobile Internet space. Involvement in WiMAX and the 700 MHz spectrum auction is part of an even larger initiative for Google to play a role in all Internet searches performed on any device that can be connected to the Internet - Internet search is not just about PCs anymore. More than 30% of U.S. Internet users (aged 15 years or older) are already using their mobile phone to access the Internet. Nearly one out of four of these mobile Internet users are using their mobile phone to perform Internet searches. IDC believes in less than 10 years, we will live in a multiscreen world where any mobile device (phones, navigation devices, portable media players, etc.) will be able to connect to the Internet anytime and anyplace. Obviously, Google has plenty of money and ambition to get involved in any project, including enterprise, finance and healthcare applications, that would make its search page the default for Internet users. In the Sprint/Clearwire WiMAX deal, Google contributed $500 million in exchange for the following: - Become the default search provider and the preferred application provider for Clearwire's new retail product; - Supply its Android operating system for future Clearwire voice and data devices; - Become the default provider of web and local search for Sprint's mobile phone services, and be able to preload several Google services, including Google Maps for mobile, Gmail and YouTube, onto select Sprint mobile phones; - Develop Internet and advertising services and applications for WiMax devices. This move puts Google in a position to own the majority of Internet searches from WiMAX-enabled mobile devices in the United States. Google.com enjoys 80% share of U.S. PC-based Internet users according to a recent IDC survey. But when it comes to the mobile Internet, Google is second to Yahoo! (25% of U.S. mobile Internet users accessing Google.com versus 29% accessing Yahoo!). The WiMAX deal could change this by 2010 when the Clearwire WiMAX network is expected to cover 120 million to 140 million people in the United States. Google makes about 95% of its revenue from Internet search advertising. With Google as the default search engine for Clearwire, Google gains access to millions of mobile WiMAX users. This equates to millions in mobile Internet advertising dollars, which IDC estimates was $50 million in 2007 and growing to more than $500 million in 2011 (details in the forthcoming U.S. Internet Advertising Forecast by Karsten Weide). Google will easily see the return of the $500 million it invested in the Sprint/Clearwire WiMAX deal within the next five years. Google has money to spend, so why not invest it on a technology (i.e., WiMAX) that promises to bring widespread mobile Internet to people so they can Google on the go - whether it be at home, work, local cafe, park or sidewalk downtown. write your comments about the article :: © 2008 Computing News :: home page |