The Wall Street Journal is reporting what everyone already assumed. Google (GOOG) will announce that it will bid for wireless spectrum in the upcoming FCC auction in January. The financial paper writes that Google "has said it wants to make mobile networks more open, so that consumers can use any Internet service and application and move their handsets between carriers without onerous restrictions."
Wall St. assumes that Google will make some money off leasing spectrum but most of it return will come on using its vaunted ad delivery system to send marketing messages to wireless devices. The model is unproven. Google has already launched a program to put its software on to handsets and allow outside developers to do the same.
But, to be in the wireless business, the search company is going to have to build or less an infrastructure. Word is that buying spectrum could cost over $4 billion. Creating a system of cell towers across the country may not cost much less.
Google does have to get in some business aside from PC-based search. No matter how good it is, it can’t grow forever.
But, in the last month, Google has said it will spend hundreds of millions of dollars creating "green" alternative energy sources, offer new handset software, and, probably, bid for wireless spectrum. Core and strategic expansion? Maybe not.
The used car business will be next.
Douglas A. McIntyre