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Ladies, gentlemen and Google watchers everywhere, I give you Mel Brooks, economic theorist!
One of Brooks’ infamous early comedic roles was of a man born before the time of Jesus, Yaweh or Allah.
Did he worship anything? “A guy named Phil,” the clan’s biggest, baddest dude, Brooks explains to an interviewer.
When Phil is killed by a bolt of lightning, Brooks and the rest of his clan realize “there’s something bigger than Phil.”
To borrow from Brooks, there’s something bigger than Google. It’s telephone and cable providers.
A reminder of this came a few weeks ago when one giant phone company, AT&T, said it has agreed to buy another giant U.S. phone company, BellSouth, for $67 billion.
From Google’s perspective, this merger serves as notice that no matter how many billions in revenues Google earns, it’s still no different than any other broadband parasite (credit goes to Jeff Pulver, the serial entrepreneur, for coining the phrase.)
Google, a parasite? Sure. Think of a hobo sneaking onto an empty railroad car for a few miles free ride.
Google operates in that same light. It doesn’t own a communication network large enough to reach all of its customers. Rather, it’s supplying a set of features, albeit enormously popular ones, that can make use of these networks.
This gives communication network owners a huge advantage. Let’s say AT&T decides it doesn’t want to allow egress to Google features unless Google forks over a toll of sorts.
“Oy Vey,” Brooks would likely say in reaction if he was in charge at the Googleplex.
Google could rectify the situation by building its own network, but that seems unlikely.
It took AT&T and cable operators decades to blanket the U.S. with their networks of copper and fiber. Imagine how long it’d take Google to reach its worldwide customer base of hundreds of million or so homes and offices.
Maybe Google can join in the buying spree and snap up say, Qwest, another of the local elite U.S. phone and broadband providers. They have shown a proclivity for the billion dollar deal.
Better yet, maybe one of the U.S. phone giants, like Verizon Communications, will buy Google. It wouldn’t be the first network owner to buy an application maker for fun and profit.