Google Fiber Eyes Its Two Largest-Ever Targets: Los Angeles and Chicago - Digits - WSJ

Please come to Boston before my next FiOS contract renewal...

"Wall Street doesn’t expect strong financial performance from the fiber business because of the high costs of building networks from scratch. Evercore ISI analysts estimated recently that Fiber is worth $305 million, versus a total value for the main Google search business of about $450 billion.

However, Google Fiber’s strategic value is higher. By announcing plans to build Internet service that is considerably faster than most existing services in the U.S., Google encourages other communications companies to upgrade their Internet services or lower prices. That increases the chances more people will get online more often and use Google’s other web services, such as Search, that make more money.

“It’s a smart play from Google to offer consumers an alternative service,” said Michael Nathanson, an analyst at communications research firm MoffettNathanson. “It’s not a very profitable endeavor but keeps the competition in line.”"

Google Fiber Eyes Its Two Largest-Ever Targets: Los Angeles and Chicago - Digits - WSJ