Google and Cars: Same Revenue Stream

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There tends to be a lack of a full understanding of the intention behind the bulk, if not all of Google’s investments in new solutions. At the end of the day, they are each about the enablement of, or at the very least, showing the way of increasing the amount of Internet traffic in order for the company to enlarge the size of its principal business – advertising on the web. Google’s work on the self-driving automobile is no different in that to whatever extent a driver can legitimately divert attention while on the road, that person can potentially be spending time on the Net.

In comprehending the mentality behind Google’s investments, one can see why it is pushing for the ultimate vision in autonomous automobiles. It is inconceivable that the firm would want to actually be a player in such a heavily regulated and extremely competitive market as well as open itself up to an incredible amount of liability concerning traffic accidents. Therefore, Google has nothing to lose in promoting the concept of a car that does not need the involvement of a driver at all, with the genuine hope that something realized well-short of this dream will still be very beneficial to the company.

There has been a lot of rhetoric, much of it sincere in nature, about the huge number of lives that could be saved with driverless automobiles. However, for Google’s financial future specifically, it has to be more about the number of hours people have to give up concentrating on the road just traveling back and forth to work.

In particular, it would be quite useful and presumably safe to go to an “automatic driver” option while in traffic. According to latest annual Urban Mobility Report from the Texas A&M Transportation Institute, in the 15 largest areas of the United States (each above three million in population), commuters waste an average of 52 hours a year in congestion delays.

In a similar way, Google Fiber beginning to put the brakes on a greater amount of penetration into new cities can hardly be viewed as a coincidence. Once more, it hardly wants to be a major participant in a space with a ton of regulations and a relatively low return on investment, at least within the foreseeable future. It has accomplished its purpose in motivating other service providers to more aggressively step up their plans in providing FTTH, facilitating a greater amount of Internet activity moving forward – again, the real goal of its spending outside of its core business.

On a final note, without an acknowledgement of the true nature of Google’s expenditures, it can be a rather cavalier exercise to determine whether they are failures. In general, with no actual purpose of getting into markets permanently outside of its areas of expertise, it may well be quite a long time before it is realized whether they were successes or not based on whatever extent other corporations decide to pick up the ball and run with these ideas and concepts.

[written by Mark Lutkowitz]

(Regarding indications of Google investing in Kaiam, please click here.)