Posted by: Olga Kharif on February 6, 2006
On Feb. 6, Skype, Google and two well-known vc firms announced that they will jointly invest $21 million into a start-up called FON. FON is, essentially, trying to do what a number of earlier upstarts had failed at — monetizing on offering Wi-Fi services. FON’s idea is simple: It’s inviting people with home Wi-Fi networks to participate in its Wi-Fi hotspot sharing program. If you allow other members to hook onto your home Wi-Fi network, you can use all of FON’s hotspots — and FON expects to have some 1 million of those by 2010 — for free. Where the money is made is in co-called “alien” memberships, where people who don’t own Wi-Fi networks pay to use FON.
This announcement carried two surprises for me. One, Google is going after providing Wi-Fi service. Sure, we’ve all heard about how the search giant is trying to get approval to build a city-wide Wi-Fi network in San Francisco. But, just a week ago, Google told me it didn’t really have Wi-Fi plans beyond that. Clearly, that’s not so. And the long-standing speculations that Google is going to try and start competing with telcos is slowly but surely coming true.
Two, I was surprised that Google and Skype are banding together on this. I mean, the two companies are fierce rivals — expected to increasingly step onto each other’s toes in the coming months. Google’s upcoming VoIP service, Google Talk, is a direct competitor to Skype. Google’s upcoming classifieds service, Google Base, is a direct competitor to Craig’s List, an online classifieds service in which Skype’s owner, eBay, is an investor. Talk about an unlikely partnership!
I wonder if this means that the two companies are, perhaps, exploring a long-ranging partnership agreement. Perhaps, eventually, Craig’s List and Google could band together against the likes of Microsoft on classifieds? Perhaps Google and Skype will make their VoIP services interoperable, to compete with the likes of Yahoo and Microsoft? What do you think?