What’s Google doing with that fiber?

Om Malik speculates that Google is building a nationwide fiber network, will use wifi at endpoints to reach users, and then use location-awareness to turbo-charge ads.
The dots to connect are:
* Google has been quietly buying up dark fiber around the country
* Google is working with a small startup in San Francisco that has software for location-based services at wifi hotspots
* Google just launched Google Talk, a text and voice messaging client.
* Google spends a lot of money on IP transit fees, and could avoid those fees by sharing traffic directly with ISPs.
If that’s what Google is doing — wow. Google is very good at building very big, low-cost computing systems. The network incumbents have an inflated cost structure and a business model based on lobbying for competitive advantage. Some smart capital investment could free vast potential energy in communication services. This could go kaboom.

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