Networking Solutions
Alphabet Seeks External Investment To Push Its GFiber Internet Business!
Updated on Wed, Feb 7, 2024
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Modern networking technology has made it easier for us to leverage computers, smartphones and even smartwatches to gather information, learn new skills, entertain ourselves and of course, communicate with others through text, audio and video – all thanks to the Internet.
In a bid to provide better connectivity, companies are investing heavily in the development of its infrastructure. So much so, that Elon Musk-led SpaceX is tying up with mobile network service providers to offer internet on the go, wherever you may be, using satellites.
Yet, at the same time, on-the-ground internet connectivity retains its importance, owing to its unmatched ability to provide strong, reliable and fast connectivity.
Keeping this in mind, Alphabet (the parent company of Google) is on the lookout to strengthen its internet offerings and has a plan in this regard.
So, what’s Alphabet up to? Let’s explore!
What Is Alphabet Planning?
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Google Fiber, better known as GFiber, is an Alphabet-owned company that offers fast and reliable internet connectivity to homes and businesses across the US.
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In a bid to extend its reach to more cities, GFiber plans to source external funding to further grow its reach and services.
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Currently, Alphabet has declined to confirm the amount of funds or the valuation the company is looking for. Additionally, it did not comment on the move was inspired by Alphabet’s overlaying cost-efficiency program.
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However, the company has already enrolled an investment bank to get the process started, including selling equity in the company, according to an unnamed source, who also mentioned the endgame is to be independent from Alphabet.
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Having begun with services in Kansas in 2012, today the company has expanded its services to 15 states, has tripled its customer base in the last 6 years and has an eye on expansive growth, having signed numerous deals to offer its services in 25 additional cities.
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GFiber still faces competition from established rivals like Verizon, Comcast and AT&T, while it’s yet to bring its services to 6 of the 10 most populated cities in the US including New York City.
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GFiber is part of a portfolio of companies owned by Alphabet that comes under its so-called “Other Bets” category. Other companies falling under the same category include Verily (a health company) and Waymo (a self-driving vehicle company), both of which have raised funds from external investors.
What Did Alphabet Officials Say About The Move?
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Ruth Porat, Alphabet's President, Chief Investment Officer and Chief Financial Officer, said, “This next step of raising external capital will enable them (GFiber) to scale their technical leadership, expand their reach, and provide better internet access to more communities.”
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Prior to this, Porat mentioned that Alphabet planned to “sharpen our investment focus, while capturing the upside given compelling technology breakthroughs across the portfolio” of Other Bets.
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Ahead of this, Dinni Jain, the CEO of GFiber said, “We are now ready to scale this much faster.”
Do you think this is a good opportunity for media and entertainment companies such as Netflix, Disney and others to tie up with the industry giant? Can Google lead the race in Internet services despite competition from SpaceX’s Starlink and AST SpaceMobile?
Let us know in the comments below!
First published on Wed, Feb 7, 2024
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