Google bluffing on 700MHz bid?

With the stage primed for a heavyweight fight between Verizon and Google in January's 700MHz wireless auction, there's some chatter today that Google might actually be bluffing. Bloomberg is reporting that some analysts think that Google has been simply making a lot of noise so that the FCC would enact those controversial open-access rules, but that it doesn't intend to place bids beyond the $4.6B minimum. That strategy would mean that El Goog would get an open network upon which to play, but not have to pony up for the actual towers and infrastructure. Of course, this flies in the face of nearly everything else we've heard to date, like Google pronouncing that it's putting "money where our principles are," and possibly even building a secret test network on its campus, but it's not necessarily unthinkable -- with carrier partners in the OHA and Verizon's surprising decision to open its cell network, it certainly seems like Google's getting pretty good at manipulating airwave politics.

[gramond99 @ Jan 30th 2008 8:31AM]

Google needs to bid and win. If Verizon wins or any other carrier - they can sit on it, slow progress, develop issues after issues.
Google does has a challenge with the towers, but does it have to be towers?
The only way to really take off with this and Googles/Android is for current carriers to not control it. Then how about Google and ???, but who

[Homer J @ Dec 3rd 2007 1:45PM]

What if GOOG and VZW cut a back channel deal so that the two don't bid each other into poverty....

[KarlW @ Dec 3rd 2007 1:48PM]

I doubt Google is bluffing. Buying a chunk of spectrum for a nationwide free wireless internet would be great.

If they did follow that route, it would undoubtedly be advertising supported. And because it's bound to be immensely popular, it would strengthen their core revenue source enough to make them a solid piece of the IT world. A lot of people still think that Google will collapse (due to the way they sprang up so quickly): this would silence those views immediately. The advertising revenue would pay for the spectrum so quickly it would for itself in less than 10 years.

[invictus1er @ Dec 3rd 2007 1:53PM]

Google will flop on the "river"

[Ozbone @ Dec 3rd 2007 1:51PM]

I too seriously doubt that they're bluffing. There are just too many opportunities for a company like Google to ignore.

[Mike @ Dec 3rd 2007 2:11PM]

wow... Google owns the FCC.

[D.L. @ Dec 3rd 2007 1:55PM]

Do they really have enough money to build the infrastructure to support a national wireless network? All those towers and the land they sit on won't be cheap.

[Brodie @ Dec 3rd 2007 1:56PM]

I'll play Devil's Advocate. (And no.. I don't mean the pinball machine down at the quickie mart). Since Google announced its interest in the spectrum, VZW unsuccesfully tried to change the open access rules the FCC laid out and then mysteriously accepted the GSM standard for its future infrastructure and will soon allow "any device" to use its network. Is it possible they've already shaken up the industry without even "doing" anything?

[Hollywood Ron @ Dec 3rd 2007 3:18PM]

Very plausible, and great post. I don't think Google is bluffing, given that nearly $5 billion is a helluva bluff, but either way they win.

[billy bob thorton @ Dec 3rd 2007 1:58PM]

"Global Equities Research analyst Trip Chowdhry in San Francisco disagreed, saying Google may offer up to $12 billion and find partners to build and operate the network." --from the same article

[Nick @ Dec 3rd 2007 1:58PM]

I dont care if Google wins the bid or not.. just as long as they force the auction over that $4.6B line.

[Matthew Hilario @ Dec 3rd 2007 2:28PM]

juked.

[Andy @ Dec 3rd 2007 2:44PM]

Here's hoping google is in it to win it. I can't even get Verizon to hook up my land line properly...

[Paranoised @ Dec 4th 2007 11:47PM]

Its funny that it says "Brought to you by Verizon Wireless" at the top of the page :-)

[Ghen @ Dec 3rd 2007 4:41PM]

hehe =)

[Ian H. @ Dec 3rd 2007 3:21PM]

Of course, this flies in the face of nearly everything else we've heard to date, like Google pronouncing that it's putting "money where our principles are"

Of course, if they are bluffing, they're hardly going to tell everyone... the bluff part has to convince...

[zephead @ Dec 3rd 2007 3:23PM]

They damn well better not be bluffing. I'm really looking forward to what Google will have to offer with all this.

[EngadgetFanBoi @ Dec 3rd 2007 3:29PM]

I was surprised from the very beginning that anyone was taking Google's bid seriously. I've said it before, and I'll say it again:

AT&T Total Equity $111 Billion
Verizon Total Equity $ 50 Billion
Google Total Equity $ 21 Billion

Google just never had any muscle to flex when it comes to the actual bid. Sure, the telecom companies are afraid of what Google brings to the table in terms of customer loyalty and new competition, but I mean, Google has a whiles to go before it can stand up with the big boys.

[dcny @ Dec 3rd 2007 11:01PM]

your forgeting Vodafone may help out Verizon if they really want the spectrum and they have loads of money

[Joshua Walters @ Dec 3rd 2007 3:33PM]

Oh google. Im glad you thought of this! Now you dont have to use all that cash, but you still get to play! YAY for you!

The only thing I dont like is the prospect of Verizon getting it. I use their wireless service, and its ok, but Im pretty sure they will try to limit this as much as they possibly can.

[Jay Gnann @ Dec 3rd 2007 4:08PM]

But... will it blend?

[B @ Dec 4th 2007 5:29PM]

please don't comment ever again

[Moses @ Dec 3rd 2007 4:36PM]

The BIG problem is that WE consumers will be the ones paying for the outrageous bidding that will take place. Learn something from the bidding wars that took place in Europe when they implemented 3G.

[Amorde @ Dec 3rd 2007 5:26PM]

Google will bid and win, they need to secure the pipes in case net neutrality falls through on the telecom and cable side.

http://pennycollege.com/?p=39

See this article regarding how it could win the best of the both worlds.

[Che @ Dec 3rd 2007 9:30PM]

If Google bids $4.6B and Verizon bids more, Google has a win-win. It gets an open network and it doesn't have to build a nationwide infrastructure. Even with a good partner with experience in the field, that wouldn't be easy for Google. So, why wouldn't Google bid just over the minimum and let Verizon "win" if it's willing to pay more.

Even if it never bids, Google has already changed the terms of this auction for the better.

[Tom @ Dec 3rd 2007 11:26PM]

Google has so much freaking cash it's ridiculous. They need to find ways to put it to work. This is a good way. Plus if they issued more stock for cash (because investors would eat it up), they could raise even more money. Its soooooo obtainable for them.

[skhawaja @ Dec 4th 2007 2:55AM]

If people are willing to pay $$$ for a share of GOOG:

http://finance.google.ca/finance?q=NASDAQ%3AGOOG

Who is going to stop them from raising the billions of dollars to win this auction?

Can someone elaborate on where the money from the winning bid will be used for by the FCC?

Where is the money going?

[etherbadger @ Dec 4th 2007 3:44PM]

@ skhawaja:
the money goes to Iraq.

[lkarisny @ Dec 5th 2007 8:21AM]

The money goes to building a public safety wireless network which is a form of a tax that we will pay for when using services by Google. Want to make a bet that there will be more taxes on top of this (double taxation?).

Also, be careful about calling this network wireless broadband or 4G. There still is fiber (which Google owns a lot of) and mobile mesh technologies that need to be added to this spectrum to make it true broadband.

Good for Google though for at least trying and pushing for open access. Our wireless networks in the US are a joke compared to European networks and our public safety folks need something superior to the WWII stuff they use today.

[scott @ Dec 4th 2007 4:29PM]

imagine what kind of help they could do for the world with the money that's being spent in this bidding war.

[John @ Dec 4th 2007 6:05PM]

They can't do anything for "the world". For example, Google is a publicly traded company, and none of the money it has piled up really belongs to "Google", it belongs to the shareholders. If Google started spending money on projects that would not increase revenue, i.e., "helping the world", then that would be neglecting the fiduciary responsibility it has to its shareholders.

[scott @ Dec 30th 2007 1:05AM]

it's fun to wish for things that don't exist though..like corporate morality...