The Google cable

From the New York Times and Om Malik: Google and five tele­com com­pa­nies will build a trans-Pacific cable between Tokyo and Los Ange­les, to increase band­width and reduce costs. The Times reported on the Unity con­sor­tium last Sep­tem­ber, but this new announce­ment con­firms the US$300 mil­lion project. Gear­Log has more infor­ma­tion on this topic. I haven’t deter­mined if this new cable will con­nect with Honolulu.

It’s an impor­tant announce­ment because, as Om notes, this is the first time that Google has pub­licly con­firmed its cor­po­rate strat­egy of build­ing its own inter­na­tional tele­com infra­struc­ture through acqui­si­tion and invest­ment. Google claims it wants to pro­vide more reli­able ser­vice to its users, so the com­pany is enter­ing the under­sea cable indus­try not as a com­peti­tor but as a cus­tomer and com­ple­men­tor of Bharti Air­tel, Global Tran­sit, KDDI Cor­po­ra­tion, Pac­net and SingTel.

As I men­tioned on 7 Feb­ru­ary 2008 and 31 Jan­u­ary 2008, the oceanic cable busi­ness can be risky. Google will have pri­or­ity on the 7.68 ter­abit con­nec­tion when it is com­pleted. Adding more band­width is an essen­tial part of pro­vid­ing scal­able, reli­able web ser­vices in North Amer­ica and the Pacific Rim. If Google con­trols its own net­work as a source of com­pet­i­tive advan­tage, will com­peti­tors like Yahoo and Microsoft face higher costs to stay in business?

Tagged as: bandwidth, competitive-advantage, customer, Google, Internet, key-success-factors, Microsoft, network, ocean, pda, strategy, telecom, Yahoo