GoogleNet: economics & fast-followers

So it's real: Google is trying to gain approval to provide free 300kb/s Wi-Fi everywhere in San Fransisco.

And we all know the repercussions: free mobile broadband, free mobile voice, will they do this everywhere, what data will they capture, telcos are screwed (again!), what will Yahoo/Microsoft do, and so forth. If Google are allowed to go ahead with this project, it could be VERY big news.

First of all, let's give credit where credit is due: Om Malik pieced together and broke this story way before anyone, and looks to have nailed it perfectly. This is great journalism, and a real leap forward in the credibility of blog-reporting.

Second, I found Mark Maunder's back-of-envelope calculations regarding the economics of the "GoogleNet" interesting. It's hard for me to comment on his assumptions, because I'm not sure how many simultaneous users can be supported by a single antenna, and what percentage of total users are on at peak time. From my days in telecoms consulting, I seem to remember that you could roughly expect 10% of users at "peak hour", which according to Mark's assumptions would mean 804 users/15 antennas*10% ~ 5.36 sumultaneous users per antenna. That sounds reasonable to me, although I'm really no expert. Any telco engineer or someone with muni wi-fi experience want to weigh in?

But what I most liked about Mark's play with the numbers was to link back the costs of GoogleNet to how many adSense clicks per user per month it would cost. Framed this way, yes, I would agree with him this starts to look like a total no-brainer move for Google.

A third comment is that perhaps these economics haven't been lost on others. Martin Varsavsky has been writing on his blog about Wi-Fi as a superior bearer (over wimax, 3g, et.al.), and more interestingly, about the possibility of Wi-Fi enabled mobile phones providing voice "at fixed line rates" (this last post is in Spanish- Martin blogs in both Spanish and English).

Martin teases readers with this interesting comment:

"Espero pronto tener un producto para lanzar al mercado y hacer con el oligopolio de móviles lo que hicimos con Telefónica cuando lanzamos Jazztel. Pero para tener éxito en este campo no solo hacen falta teléfonos sino encontrar una manera de crear una red wifi nacional. Hay que estudiar bien cómo hacer esto."

My lazy translation: I will soon launch a product that will do to the mobile phone oligopoly what we did to Telefonica when we launched Jazztel. But to succeed we need more than wi-fi phones; we need to also find a way to create a national wi-fi network. We have to study how to do this.

If you don't know Martin Varsavsky, he's a serial entrepreneur who started among other companies, Viatel, Jazztel, and Ya.com. Some of these companies have done better than others, but he's managed to start them all and cash out every time at spectacular valuations. He's Argentine, but lives in Spain, and blogs frequently. Sort of Spain's version of Mark Cuban.

Anyway, I'm very interested to see whether Google's free wi-fi for all sparks "fast follower" behavior in other markets. Varsavsky could easily get the financing (though maybe not the regulatory permission) to build up the not-Google GoogleNet in Spain, the sell it to them or others when the international consolidation starts to happen. Sort of what he did with Ya.com back in the web1.0 days.

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