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Video Lights Google's Fiber

With Google (Nasdaq: GOOG) now officially in the video distribution business, the company's growing investment in IP backbone infrastructure will soon pay off, Google watchers say.

Google's new Internet video service was announced Friday at the Consumer Electronics Show (CES) in Las Vegas, and it went live Monday night. (See Google Plans Video Service.)

Google observers have been speculating for months over why the company has been buying up networking infrastructure. Light Reading reported last September that Google has already procured large chunks of carrier hotel space and fiber optic cable, and has issued large RFPs for DWDM and Ethernet-based telecom equipment. (See Google's Own Private Internet.)

Google video may be first of the company's services that really gets a bang out of those investments. (See Google Gotcha.)

Google will use its fiber and other transport infrastructure to distribute the storage of its video content over the 65 or so data centers it owns, says Peter York of Vulcan Ventures in Seattle.

York says housing the video assets at all those locations improves the overall performance of the network: "They've got large-scale storage areas in each one of their facilities, and then it's just a matter of tuning locations based on the actual content demand."

Google is trying to rapidly increase the number of its data centers into the hundreds, York says. Google is also likely to use those data centers to house video content localized to a given market. The local content (like high school football games) can then be "injected" with local advertisements. As Google collects data on the viewing habits of individual IP addresses, ads will soon be targeted on a household-by-household basis, says Michael Hoch of RampRate, a Los Angeles-based analyst and consulting firm for digital content owners and distrubutors. Google declined to say if it is also buying wholesale transport from IP backbone providers like Level 3 Communications Inc. (NYSE: LVLT). (See Google Passes on PCs.)

York believes Google has been buying up the transport infrastructure at very reasonable rates. Network operators invested heavily in IP backbone networks during the telecom boom, he explains, but were forced to hold fire sales after the sector soured in 2000 and 2001.

The Google video store now sells content from the NBA, Sony Corp. (NYSE: SNE)/BMG, CBS, and others. Google says it intends to add more paid content soon and often.

Video distributors like Google typically negotiate a revenue sharing agreement with the owner of the content, RampRate's Hoch says. Content owners like CBS can demand anywhere from 10 to 80 percent of the download price, depending on the newness or popularity of the content.

Google spokesman Nate Tyler told Light Reading the software used to store, manage, and serve video was all developed in-house, leveraging the company's sizeable war chest and engineering force. (See Intel Teams With Google, AOL.)

"They used existing infrastructure -- nothing too far out and freaky for what Google does,” Vulcan's York says. "There's nothing in there that's really like a ground-breaking video-on-demand server, for example."

— Mark Sullivan, Reporter, Light Reading

Mark Sullivan 12/5/2012 | 4:09:43 AM
re: Video Lights Google's Fiber Google wants more than just "best effort" to deliver its video content. But are the company's forrays into network ownership futile if it still has little control over the last mile?
nwave 12/5/2012 | 4:09:42 AM
re: Video Lights Google's Fiber Google certainly realizes the last mile conundrum nence their recent forays into free WiFi access
and a recent investment in BPL (Broadband over Powerline) technology.

http://www.unstrung.com/docume...
http://www.internetnews.com/bu...

Google is reacting to the recent "no free lunch on the Internet for high bw content providers" the CEO of Verizon (Seidenberg) and ""They use my lines for free -- and that's bull." comment from Ed Whitacere of ATT&SBC(Whitacre).Oh look there is another wireless technology that just trashed my business model!!

http://www.informationweek.com...

Perhaps these "walled fortress" folks should keep John Gilmore's famous adage about the Internet in mind "The Net interprets censorship as damage and routes around it."

Google and others bandwidth are certainly going to explore alternative Last Mile Paths and all the new technologies to reach the home.



materialgirl 12/5/2012 | 4:09:41 AM
re: Video Lights Google's Fiber Don't forget the role of software. Compression and applications like BitTorrent can also squeeze more video down smaller pipes.
rjmcmahon 12/5/2012 | 4:09:39 AM
re: Video Lights Google's Fiber Another question in my mind is will Google's recently announced video download store http://video.google.com make money or do users now expect all Google indexed content for free?
TheMuffinMan 12/5/2012 | 4:09:39 AM
re: Video Lights Google's Fiber Google wants more than just "best effort" to deliver its video content. But are the company's forrays into network ownership futile if it still has little control over the last mile?

Buying up network to distribute video doesn't seem to be anything more than what Akamai do for web sites today, they didn't want to pay Akamai to do it when they worked out they could probably do it cheaper themselves.

Taking a wider view, it would also let them impose their own QoS for their VoIP application, and any other application that needs it.

IMHO seriously investing in the last mile is probably the last thing Google wants to be doing. They should stay with their track record of innovative applications - and try and find one that people will pay for before the G-bubble bursts.
rjmcmahon 12/5/2012 | 4:09:36 AM
re: Video Lights Google's Fiber They [Google] should stay with their track record of innovative applications - and try and find one that people will pay for before the G-bubble bursts.

I think the applications will need to be ones that support advertising as the funding model. Apps like maps makes sense to me as ads can be easily inserted while apps like Picassa seem more difficult for Google to monetize. (I do think Picassa is a quality application and I wonder why they didn't the sell it instead of giving it away for free?)
o-man 12/5/2012 | 4:09:35 AM
re: Video Lights Google's Fiber I think a lot of people like MAC because they HATE microsoft - but to be the best they have to beat the best...

o-man 12/5/2012 | 4:09:35 AM
re: Video Lights Google's Fiber just a thought -

But at 1.99/episode of survivor all they are doing is trying to compete with I-Tunes...

personaly I hate MAC
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