The Gigaom story about Google and Verizon this morning by Stacy Higgenbotham was thought provoking on its own merits. But I'm looking at this another way. Dark fiber.
For years Google has been reportedly amassing dark fiber. A few months ago they announced a plan to light up 100 cities with fiber connectivity, bringing a faster, more responsive Internet to communities around the USA. At the roughly the same time Verizon (constrained by regulatory footprint) has reduced growing the coverage map for FiOS, the fiber to the home technology that pretty much has nothing but happy customers across the USA.
Now it's time to put two and two together. Take Google's initiative, co-venture with Verizon on the technology, and instantly Verizon becomes a nationwide player, going on par with AT&T, who has really, only Yahoo as their partner. Yahoo, which has it's own share of problems, including a rumored disgruntled board and most likely, on her way out Carol Bartz as CEO, not for her own doings, but really the divided management and board on top and below her, and you have opportunity for Verizon and Google to make a run against the cable MSOs who are week by week winning more of the voice and data network business from individuals who give up DSL and switch to faster, and more reliable cable connections, and who are dropping POTS based dial-up. You also don't need to be a genius to see that the cable operators are gunning for the bread and butter small business market. When Comcast acquired NGT a few months ago, that was a sign. Following what Cablevision is doing, and the recent IBBS acquisition of SinglePipe shows that the even the tier two cable folks want to be in the voice business too. And, as we've seen, the telcos with uVerse and FiOS want to be in the TV content delivery business.
Google's moves with the GIPS acquisition (note GIPS was an agency client of mine up through acquisition) and with the acquisition last year of On2, plus some other pieces and people, shows that Google wants to be your video delivery company. Add in, YouTube as a way to get your attention, and you quickly see that video is the game that's being played, and the delivery of video content, real content, not a bunch of amateur videos, but slickly produced, broadcast quality content is where the money is.
Now where this gets interesting is Google's perceived partner in all this is Verizon. But Google also has a partnership, in Clearwire, with Verizon's biggest enemy. Comcast. Comcast, Time Warner and Cablevision has the most to lose in a Google-Verizon tie up with potential customer defections.
At the end of the day, this is all a chess game, and the customers are simply pawns. The real domination is being played in the board rooms and at the investor retreats with Google seeking to be the whip. Verizon, is simply their slave.