Google wants to acquire Sprint Nextel but for now, it feels more like a speculation than anything confirmed by a reputable source. We all know that Google wants to grow its mobile business with or without the Gphone, and according Rich Tehrani this acquisition of Sprint Nextel will provide them a lot of benefits. Of course, Google has long touted the importance it places on mobile ad revenues. Made all the more evident by their recent preparation for the 700MHz auction and the figurehead role Google plays in the Open Handset Alliance’s Android platform.
Let?s think at Google from a philosophical level. The company has built everything from scratch : computers, operating system, web server software and more. They like to have a complete control over things. There are a lot of serious issues such a transaction, like buying Sprint Nextel, would pose :
- Google gets into the messy business of telecommunications. I don?t mean to say Google?s day job is easy but the telecom market gets it involved with government agencies like the FCC on a more regular basis. Like many other large telcos the company will have to spend more and more money lobbying and technology differentiation may be less important than government regulations in ensuring future success.
- Getting seriously into the telco business and having a corporate motto ?Don?t be Evil,? may be tough to pull off.
- Retail stores. Google?s investors love the fact that Google has a massively scaleable business model which can grow with the addition of servers. Imagine if Google had a slew of retail stores to deal with around the country . Google?s valuation would likely take a major hit.
- Open Handset Alliance: One would imagine if Google owns its own network, other network operators would not be too happy to be part of the OHA. This could slow progress for Google getting on the handsets of other wireless service providers.
- A purchase of Sprint Nextel would make Verizon and AT&T go crazy and they would make life even more difficult for the search leader. Could they make life any more difficult than they do today? Maybe.
So , the question is : will Google buy Sprint ?
