Google's Wireless Plans: Out of Favor With Analysts

Posted by: Olga Kharif on November 19, 2007

On Friday, various publications, including BusinessWeek.com, have reported that Google intends to bid in the upcoming 700 Mhz wireless spectrum auction alone, without a partner.

Today, several financial analysts have come out with reports saying that such an action would be a mistake. Bernstein Research’s Jeffrey Lindsay estimates that Google may have to bid more than $10 billion to win airwaves in this auction. Such a bid would use up all of Google’s cash, cash equivalents and marketable securities. With its cash pile vastly shrunk, Google may have trouble making other strategic moves.

Meanwhile, a network build-out using the spectrum would cost another $5 billion, Lindsay figures. To build such a network without a partner, Google would have to take on significant debt — and Lindsay believes that investors won’t take to that kindly.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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