Just arrived in NYC last night, and while on the plane spent a bit of time thinking about Googlenet, and what Microsoft and or Yahoo must do to counteract the reshaping of the Internet that the release of a free wifi network, such as the rumored Googlenet. By must do, I am simly acknowledging the likelyhood that if Google rolls out free Internet before MSFT, it likely will dominate the Internet the way that Microsoft has dominated the desktop. The challenge being that more and more applications will be delivered via the Internet (in the future), and this eats right into Microsoft’s market.
T-mobile really offers eith one the best quick roll-out. Yes, I mentioned earlier that if MS bought Level 3 they could add a wifi / wimax component to it, and create a free network virtually overnight. But why wait? T-mobile has the network, and people are already used to using it. Buy a popular network, and make it free. You’ve already got all of Starbuck’s clients; why would they switch???
How would MSFT make money? Ads, and other services. Make people use a hotmail account, and introduce ads. People are used to it with gmail after all. Plus nobody will grouse about adding a hotmail account if it means free Internet access. Does anyone complain about getting a gmail account? They expect to need it for certain services. They’ll expect it from MSFT too.
I would be surprised to see MSFT actually takes this action. It would require quick action, and an acceptance that the strategy might not pay any immediate revenue dividends. It’s likely to lose money in the short term, until they get the advertising model figured out. But it would be a smart decision. The first to offer free Internet would likely win the war.
I do expect Google to offer free Internet first. I expect that this will set the stage for them to offer Office type applications over the Net. This could be MSFT’s undoing. Microsoft may be well entrenched in that marketplace, but new users would have no incentive to use their products over Google’s. It may take a generation, but their marketshare would collapse. A generation is not a long time in business. It may seem it for Internet companies, but not for traditional businesses.
Anyhow, one thing is certain – who ever provides free wifi / wimax service will get my vote!
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