Is Google Building Alternative Internet?

Google is working on its most ambitious project to date, the
creation of a global data transfer network that could
effectively serve as a private Internet. Since the introduction
of AdWords three years ago, Google has become the world’s
largest media company and advertising vehicle. It has grown to
rival Microsoft in scope and scale. The process has made it a
fully globalized corporation.

Google has an estimated $7billion in the bank and employs many
of the brightest brains in IT. It also has a reputation for
being one of the best tech firms in the world to work for and
has been known to use that reputation to headhunt intellect from
its rivals. It is focused on the burgeoning Chinese market and
appears to be performing better there than its chief rival
Microsoft is. Google has the obvious capital and intellectual
resources to do just about anything it wants to.

There are a number of reasons backing speculation that Google is
building its own global digital communications network. Google
has formally entered the telecom business with the release of a
VOIP client known as Google Talk. VOIP is an acronym for Voice
Over IP, which is a synonym for Internet telephone. In order to
provide this service Google has had to acquire technical and
physical resources that, along with other assets held by the
company, point to the construction of an alternative Internet.

As Microsoft has so ably demonstrated over the past twenty-five
years, there are a number of profitable ventures found in a
space monopolized by a single mega-corporation. If that is the
path Google is taking, building the infrastructure to capitalize
on it would be considered the crucial but difficult first step.
Over the past ten months, Google has been purchasing a large
quantity of redundant fiber-optic lines, (commonly referred to
as dark-fiber), in cities around the world. This fiber was laid
during the boom years of the late 1990’s but left surplus after
the dot-com crash in 2000. Speculation about Google building an
alternative Internet has been circulating since early January 2005
(http://news.stepforth.com/blog/2005/…mal-growth.php)
when Google started buying and accumulating lots of dark-fiber.

Telecommunications industry news-source Light Reading
(http://www.lightreading.com/document.asp?doc_id=80968) today
reported on some of Google’s recent real estate acquisitions.
Google is leasing large amounts of floor space in or near major
telecom interconnection facilities such as the recent leasing of
about 1/10th of the rentable space at 111 8th Ave
(http://www.111eighth.com/index.htm) in New York, one the world’s
largest telecommunications interconnection hubs. It is also said
to be in negotiations for large amounts of space at enormous
co-location centers (known as carrier hotels
(http://en.wikipedia.org/wiki/Carrier_hotel) ) on the west coast,
with the goal of linking Google’s North American and Asian
networks.

In early 2005, Google began issuing RFP notices to relevant tech
firms for the development of a DWDM fiber optics network. The
RFP process ended earlier this month and Google is now reviewing
bids from multiple tech vendors. Google is said to be planning
to first establish a network in North America and then connect
it with similar networks established in Europe and Asia. The
construction of such a network could give Google the ability to
deliver multiple branded media such as music, video, online
telephone and other Internet services to every home in the
United States.

DWDM (Dense Wavelength Division Multiplexing) is a technology
that exponentially increases the carrying capacity of fiber
optic cables. According to an article in yesterday’s IPMedia
Monitor (sub req.), only a handful of the largest
telecommunications providers operate commercial DWDM networks.
A small number of private DWDM networks exist but few are large
enough to need such capacity.

Google’s need for bandwidth capacity is increasing rapidly. It
currently pays the traditional telecom firms like AT&T who own
the long-haul fiber lines a premium for bandwidth. Building its
own data transfer network could be seen as a cost savings
solution, especially as it could cost as little as $100million
(in new spending) to construct one. Google already owns fiber
throughout North America and around the world. It just needs to
connect it all together.

Once connected, what could Google possibly do with a homebrewed
state-of-the-art fiber-optics system? It could develop the kind
of exclusive branded environment AOL originally dreamed of. It
could capitalize on its recent innovations to provide
life-service technologies such as Google Talk (VOIP) and
interactive information resources such as local search alerts
and the delivery of news, video and music files.

According to the IPMedia Monitor article
(http://ipmediamonitor.com/subscriber…&article_id=21),
“… those who have reviewed the RFP say that Google’s plans
extend far beyond cost-saving motivation, with an architecture
that puts a Google-controlled hub deep within all major metro
areas.”

Google’s stated goal is to organize the world’s information. A
big part of that goal is to turn a profit while doing so. Google
turns a very tidy profit each quarter but has long been seen as
too reliant on one form of income, paid search advertising.
Google draws between 90 – 95% of its revenues from paid ads. The
development of a Google operated data transfer network would
give Google any number of ways to expand the number of
productive revenue streams from 1 to 1+ more.

Then again, Google has always prided itself on its ability to
organize the world’s information and provide it free of charge
to its users. The cost of Google’s services is borne by the
advertisers. Google might simply be exponentially increasing its
online real estate inventory by enticing hundreds of millions of
new registered users to take a look at whatever it is they are
creating. Assuming it is the coolest thing on the block when
released and is faster and cheaper than its competitors (as most
of Google’s new products tend to be), many of those new users
will choose to stick around to use the services offered by a
Google branded network.