Google's path to world domination is not so clear

It's no secret that Google has been working hard to build a large number of new datacenters around the country. These behemoths are filled with as many 100,000 servers each, and that represents some serious processing power. Bob Cringley sees something sinister behind this, something that could remake the Internet in a really bad way:

It is becoming very obvious what will happen over the next two to three years. More and more of us will be downloading movies and television shows over the net and with that our usage patterns will change. Instead of using 1-3 gigabytes per month, as most broadband Internet users have in recent years, we'll go to 1-3 gigabytes per DAY -- a 30X increase that will place a huge backbone burden on ISPs. Those ISPs will be faced with the option of increasing their backbone connections by 30X, which would kill all profits, OR they could accept a peering arrangement with the local Google data center.

Seeing Google as their only alternative to bankruptcy, the ISPs will all sign on, and in doing so will transfer most of their subscriber value to Google, which will act as a huge proxy server for the Internet. We won't know if we're accessing the Internet or Google and for all practical purposes it won't matter. Google will become our phone company, our cable company, our stereo system and our digital video recorder. Soon we won't be able to live without Google, which will have marginalized the ISPs and assumed most of the market capitalization of all the service providers it has undermined -- about $1 trillion in all -- which places today's $500 Google share price about eight times too low.

It's a grand plan, but can Google pull it off? Yes they can.

I see a few things that are problematic with this. First, Google may be becoming a true behemoth in some areas such as advertising, but most of the other Google services are largely useless for generating revenue. Second, each new data center that it brings online will add a large new set of bills to Google that will have to be figured in as a basic cost of doing business. Electricity, property taxes, manpower and things like that will keep adding to the cost of just doing business for Google. Third, and this probably the worst challenge that Google faces, is the remerging of the old telecoms under AT&T. If at some point AT&T and Verizon merge together, that would create a force that probably not even Google could stop.

Cringley also underestimates the telecoms when it comes to the way that they are investing their resources. While Google may be tying resources up to get more power, the telecoms and cable companies are not standing still either. They telecoms in particular are going to be pushing hard in this direction as they work to roll out IPTV services. Google stands to really get its butt kicked here by the more established players who have much to gain by continuing to reinforce their existing broadband services with more infrastructure. It is not inconceivable that within another few years of investing that 1-3GB per user, per day would be quite feasible in most mid-sized or larger areas of the United States.

There is one last thing that could end up causing serious damage to Google, and that's their nonchalant attitude toward copyrights. YouTube has caught a lot of grief from copyright holders around the world, and Google's book indexing and search project has provoked the ire of many publishers. Knowing how hefty the statutory damages for copyright infringement can, Google might end up with the legal equivalent of an armed nuclear bomb in its midst.