It's definitely something to model future companies off of.
When you win the race, don't stop, keep running.
First of all, the system is in total very expensive: You don't get any coverage with just a few baloons, you probably need hundreds to make any of them stay connected to the rest of the internet most of the time.
Second, this system is extremely stochastic and complex. The winds are mildly predictable, so they will have to optimize the balloon paths to cover their userbase.
This is a very exciting problem once you think about it...
That's a good summary of why Google has been so successful.
They have a way of making engineers and regular people really excited about their projects. It's a feedback loop - have exciting stuff, recruit smarter people, work on more exciting stuff.
Take away Glass, self driving cars, Loon, and all the other blue sky projects, and you still have a wildly successful company. But take away those two cash cows and Google is broke.
On the other hand there is no telling what sorts of massive successes will come out of Google. They will have their stakes in any mass-produced self-driving car, Google Glass is at least going somewhere, and Android is already very popular and enabling Google to get Ad revenue without being fought by Apple every inch of their way.
The stock price and market capitalization is driven both by current revenue but more so by these insane projects and the probability that there will be another big success.
EDIT: To those saying they're playing the long game; Playing the long game doesn't make sense. The long game is being fully wired. By the time poor areas become economically important enough to be advertised to, they will have traditional telecoms servicing them.
They're playing the long game. They see the third world as a market in the making, and they want to be entrenched when it develops.
No, the long game is wireless communications (and renewable energy). One of the reasons for fast growth in some developing countries is the fact that they don't have to make the same investments in infrastructure that developed countries made in the past.
Give it a few more decades and they'll be wired just like everyone else.
And data rates of > 1 Gigabit for wireless connections are readily achievable these days. [1]
People say infrastructure is too expensive to build, it's not. When you have a discerning customer base with the purchasing power to demand it, infrastructure is the only way to serve it. Wireless cannot support that. As soon as the developing world stops being developing, in will come the telcos to build real kit.
#1 - The United States is wired for legacy reasons, our infrastructure was built 50+ years ago when wireless voice and data for the most part did not exist.
#2 - When I say "sparse" I'm referring to density of the target population, as in, the number of households per square mile.
It does make sense to run wired connections to dense urban populations, the cost-per-connection, particularly measured on a bandwidth-per-drop-per-dollar basis is great. Also, if you already have cable (either pairs of copper, or coax-for-TV) running to those people's homes, you've got a foundation for delivering data.
For most of the developing world in the next century (excluding the cities), communications, data, and entertainment will be in the form of wireless (Satellite, 3G, or directional 50 GHz+ data drops for backbones).
We won't be running cables to supply communities in the African countryside with high speed Internet. (We also won't be running it over 3G/LTE - which wouldn't be most people's choice for a wireless data backbone these days)
It's been years since I've had a landline phone. I'm sure I'll eventually drop my landline high speed internet connection too.
In the developing world, cell towers connect to other cell towers wirelessly. That's a hack. It's the reason why hotel Internet blows. Not its proper use case, engineering-wise. Service sucks but the customer base isn't discerning enough to notice and wouldn't be able to afford better.
We have Clear Internet service in Atlanta. We had it for awhile, but crappy reception due to trees even though we were well covered by three towers made us go back to cable. Dialup would have been better. I had another friend within eyesight of a tower, he dropped it too because service got so crowded and bad that he couldn't stand it.
Current wireless technology could never replace wired and deliver the same quality of service that wires do. For proof, head down to your local Starbucks and try to get work done. I've not seen one yet where the connection didn't cut out at least once an hour. Radios degrade over time, copper doesn't.
Wired connection is extremely expensive to deploy and very time consuming too, wireless, not so much. As a matter of fact there is no "nation-wide" wired internet service here, only local providers. New wireless providers are popping up almost every year...
I'm not sure it will be ever be profitable to run landlines. The big issue being that there wont never be public and private monopolies again and that you dont run a line to a single costumer.
Developing areas don't have that existing infrastructure. Perhaps setting up a wired infrastructure will make the most financial sense. However, I don't think that's a foregone conclusion, and a pure wireless infrastructure may be far cheaper and more profitable.
It's not cheaper if you have to build that trunk line, and the latency and equipment start getting costly when you're looking at going tower-to-tower over a long distance, since with a single fiber you can run over 100km before you need another relay (and carry a lot more data).
Where this initiative by Google works is getting the rest of the world onto the internet somehow, and profiting off being the base-level service provider. Which would be quite a thing - a world where everyone could send some packet data at any time, would be very different to today where even leaving my house raises serious questions about how online I maybe over the next 48 hours.
I fee bad that you can't believe that some people or company with money just wants to make the world a better place.
You said it yourself. Google probably won't make money. Maybe, just maybe, they just want to do something good.
> I feel bad that you can't believe [..]
the same could be said for naiveté.
They don't need to do this. Yet they do. That's good enough for me.
Though opening up their index and creating a search marketplace might seal the deal.
But think about it...right now they have a random bunch of 10 or so tabs (flights, recipes, patents etc) above the search box. Is that it?
To expand search to its full potential that list has to expand.
What better way to do it than create a marketplace? It would be a good experiment to run a pilot in some small country or city and see what happens. Unlimited API access to google search...any app built on top of that platform that gets X number of hits becomes another tab above your search bar...for a price...or advertisers could make it free cause domain based search can get them better targeting.
Regarding the share structure, Google has two classes of shares, or maybe three by now. Class C shares don't get to vote, and I can't remember if they exist yet (IIRC they were voted into existence a year ago, but only pending various hurdles that I think might not have yet been cleared). Class B shares are worth 10x as much as Class A shares, for voting purposes. Guess who owns most (all?) of the Class B shares.
Anyway, the various share classes are all a bit beside-the-point. The real point is that when you add up all the votes, Larry and Sergey control a lot of them. And then there's Eric. And then there are a few CxOs/SVPs with meaningful shares. So basically a small group of people, who have led Google to its current state, are in control. Other shareholders are just along for the ride.
On top of all that, Google has always warned potential buyers that they don't give a shit about quarterly earnings, and they care about long plays and such, from the IPO forward. If minority shareholders were to sue the company for lack of fiduciary care, I think this would go poorly for them.
You could look up modern SEC filings to have a more-detailed breakdown, but here's a years-out-of-date summary I found with a few minutes use of... you guessed it.
... And by that time, they will all be users of the google ecosystem thanks to this.
This project is not a branching out. This is what happens when it's cheaper to expand your market (create the pie bigger) than trying to cutting into market share (take a bigger bite out of the pie).
Driverless cars is no different.