BOB GARFIELD: More than six months ago, Business 2.0 writer Om Malik noticed a job posting at Google, and he was interested, not in the job but in what the new position suggested might be afoot at Google. So he commenced to dig. What he discovered as he made his way through his rolodex of contacts was that Google had been quietly shopping for the past year and buying up unused fiber optic cable or dark fiber all around the country. What does that mean? Well, dark fiber is cable that has been laid out but not connected to anything. During the telecom boom of a decade ago it was planted by the thousands of miles but rendered worthless by the subsequent telecom bust. The fact that Google was buying this fiber up at pennies on the dollar suggested to Malik that Google may be building out a vast network of its own, maybe even a parallel Internet that could, among other things, circumvent existing Internet service providers. And if it owned such a network Malik calls it GoogleNet the company could set up Wi-Fi hotspots in commercial districts to give Internet service away for free. That would give Google advertisers exclusive access to consumers at the point of consumption. Anyway, Malik says that's how he figures it.
OM MALIK: They are building a GoogleNet which is basically connecting the Google infrastructure worldwide. Think of it as a parallel Internet which Google owns. The way most of the Internet works right now is that when you come to Google, whether you're using your DSL or cable connection, you use the cable providers in a network to get to Google. So at some point, somebody has to pay for the usage of network. And as more and more bandwidth is going to be consumed, Google will need more and more bandwidth. So the idea is to build out your own infrastructure. This way Google doesn't pay anyone for using their network.
BOB GARFIELD: Well, what does it mean for me, the Internet broadband consumer?
OM MALIK: They will use these assets they're buying to come closer to the end user, the end user being you. And whether it means by striking up special arrangements with, you know, people like Comcast and SBC, or if it means offering free Wi-Fi in places like commuter stations or sports stadiums or public libraries or shopping districts, the idea is that the closer they get to you, the more targeted advertising they can offer. And, you know, that makes advertisers happy. And what it means for you is it'll be nice to get free access, you know, wherever you are. I mean, if you can actually enjoy the sunshine and check your e mail or look up information on the go. We've seen it time and again; if you have access, you certainly find new ways to use that connection. So if, let's say, you're in San Francisco's Union Square and you're searching for denim and the local search results can easily say there is a Levis store which is like maybe two blocks away. So then certainly the value of Google actually goes up tremendously.
BOB GARFIELD: Okay. So it's not universal free broadband access, but opportunities for consumers to hook up to wi fi hotspots paid for entirely by Google in various places around the country.
OM MALIK: That's correct.
BOB GARFIELD: What does it do to, to change the competitive balance among Google, Yahoo and, say, MSN?
OM MALIK: In the future, as more and more high bandwidth applications come online, Google will - five years from now will look very smart for having done this, because the cost of bandwidth, even if it's falling, is going to become a major cost for everyone.
BOB GARFIELD: I'm curious about any antitrust issues attached to this project because, let's say, Google is offering free wi fi hotspots at places around the country. Could that be interpreted as predatory pricing? After all, free is the most predatory [LAUGHS] price of all.
OM MALIK: I don't think so. I mean, anybody can do this. You know, Yahoo can do this, Microsoft can do this. They haven't done it. It's simple as that. It's not as dark as it seems.
BOB GARFIELD: These guys are really smart, aren't they?
OM MALIK: Absolutely. I mean, they are the sharpest knives in the drawer, as they say. I mean, they have it all figured out. And I was caught by a surprise when I started chasing down this story. Like anybody could have thought of this but not many people did. So my respect for Google has gone from 10 to 100 in six months.
BOB GARFIELD: Okay. Well, Om, congratulations on the scoop and thanks very much.
OM MALIK: Hey, thank you, Bob.
BOB GARFIELD: Om Malik is a senior writer for Business 2.0 Magazine.