Implications of the Google-Sprint merger

Like just about everyone else in the tech industry, I was caught off guard by Google's announcement late yesterday that it's acquiring Sprint. We all knew Google was interested in the wireless market, but I don't think anyone expected it to make a move this big, this quickly.

In retrospect, though, I think the deal was kind of obvious.

Google can compete with the wireline phone companies and the cable TV companies by offering municipal WiFi networks. It didn't have to acquire companies in those spaces. But WiFi mobile phones aren't ready for prime time – there are too many holes in the network coverage. Google needed a play in the mobile operator space. By combining its WiFi offerings with Sprint's mobile network, Google will be able to offer comprehensive communication and data services that can't be matched by any other company.

The press release was pretty sparse on details, but I loved the statement that we'll be able to use a single Google ID to receive phone calls, e-mail, and instant messages anywhere in the country. I like its commitment to offer unlimited flat-rate voice and data. And I was thrilled by Eric Schmidt's promise that Google's mobile data network will be open to any application from any vendor.

It'll be very interesting to see how the competitors react. Is Yahoo going to buy Cingular? I have to assume that Microsoft will feel obligated to buy an operator as well, but without the other Web properties that Google owns, Microsoft will find it very hard to match Google's scope and synergies.

I also start to believe the rumors about AT&T buying Comcast. They'll need it to compete with Google across the board.

It will also be interesting to see what happens to the handset companies. I don't believe Google or Yahoo will be willing to accept mobile phones whose user interfaces are as cluttered and confusing as the ones on the market today. Well, maybe Yahoo would.

The biggest downside of the Google-Sprint deal is that today is April Fool's Day, and I fabricated the whole thing. None of it's true.

Not yet anyway.


Michael said...


Anonymous said...

Great April Fool's Entry!

Actually, it's been rumored that Sprint's days as an independent are numbered.

I had always been picturing that a cable company might pick them up (say, Comcast) to broaden out their portfolio to also include wireless.

However, I actually think Google buying them could make some sense - a pure wireless play against the telecom incumbents (both RBOC and Cable). They could use the dark fiber they're rumored to be acquiring as the backbone.

Of course, this would add fuel to the fire on network neutrality.
And Sprint is firmly in the CDMA camp which would limit Google worldwide where GSM dominates.

Great Blog, btw.

Michael Mace said...

Anonymous wrote:

>I actually think Google buying them could make some sense

Thanks for the comment, and I agree with you. I started to work on the post thinking I'd write a jokey thing (something like "RIM Buys NTP, Sues Itself"). But what I really wanted to write was the news story that ought to be true.

Sprint seemed like the right target for Google because they've been investing in WiMax, but you're right that CDMA would be a limitation. Maybe next April 1 I'll have them buy Vodafone too.

I think it's a low probability that Google would actually buy a wireless operator, because they don't want to be saddled with that much infrastructure. But I think I could make a good case for it strategically, and it would sure change the rules.

Anybody else have an opinion? Do you think Google ought to make a world-changing acquisition like this?

Hey, they've got to use all that money for something!

Anonymous said...

I posted a link to this on PDA247- doh!

Prashant Singh said...

you are right . its nottrue .and at thesame time you are also right in saying that It's not true yet.
with Telcos locking horns with Google ,something like this is bound to happen sooner or later .

Nice Post anyway

Anonymous said...

Looks like this 5 year old joke was more of a prediction than anyone realized.