Why Google (GOOG) Won't Buy Sprint Nextel (S)

The blogs are on fire about a rumour reported Saturday by TMCnet’s Rich Tehrani: That Google is eyeing Sprint Nextel, the troubled No. 3 U.S. wireless carrier. Let’s put this one to bed: it doesn’t make sense for Google to be in the wireless service business. And they won’t buy Sprint.

The success of Google’s ad business is based on getting its ads in as many places as possible, in front of as many people as possible, and for it to match its ads with their viewers as accurately as possible. It makes lots of sense for Google to acquire companies like Blogger: more blogs means more Web pages, which means more ads. It makes sense for Google to develop software for mobile phones, and to seek to distribute those phones to as many people as possible: more phones running Google software means more people looking at Google ads.

But neither of those situations requires Google to own or operate the pipe that provides access to those services. It’s true that wireless carriers largely dictate what phones their subscribers can buy. But Google has already shown that it can get major carriers to partner up to sell its phones. Sprint and T-Mobile are already signed up in the U.S. And if Google’s phones get good buzz — or, more importantly, if Google can be the first to generate meaningful mobile ad revenue and share a chunk with its carrier partners — expect to see Verizon and AT&T signed on sooner rather than later. That’s in line with Google’s goal: getting its ads in as many places as it can. Buying a carrier — and trying to wall off part of the wireless industry as its own — is not.

See Also: Google Phones: Four Things We Still Don’t Know
What Google’s mobile phones Mean To Us — And Them

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