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Google Expands Fiber Net Service

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Search giant Google Inc. has announced that it would expand its high-speed Internet service through its fiber-optic network to Olathe, a Kansas City suburb with around 125,000 residents.

The Internet and video service named Google Fiber will mark the company’s first expansion that will compete with local cable companies outside of Kansas City, Kan., and Kansas City, Miss.

Google stated that its proposed rollout of the Internet service has been approved by the council of the Olathe city but did not specify the time by which the service would be available. Google Fiber will provide speed of 1 gigabit (GB) per second, significantly faster than the average U.S. Internet speed.

Google offers its Internet service under three plans. In the first one, the residents have to pay $70.0 a month solely for the Internet connection. The second one is for $120.0, which offers TV service, a digital video recorder and a set- top box along with a tablet-computer remote control. The third option offers seven years of free Internet access at slower speeds and the customers need to pay a one-time installation fee of $300.

Google is banking on its speed to attract users. This can open further avenues for other new online services and can help Google to expand its online offerings.

According to Global Industry Analysts, Inc. (GIA), the fiber optic components market is expected to reach $42.0 billion by 2017 globally. Fiber optic technology is witnessing decent growth as the speed of data transfer offered by the networks is highly prioritized. Advanced applications, PCs and network servers demand high speed and the optical fiber cable can support high transmission speeds.

Google has always spent handsomely on research and development to launch new and innovative products. Recently, Google announced a new product, Google Keep, a tool that allows users to create notes and lists that are synced across all the devices.

In the fourth quarter of fiscal 2012, Google’s gross revenue (including TAC) touched a record $14.4 billion, representing sequential and year-over-year increases of 2.3% and 36.2%, respectively. Excluding the $1.5 billion contribution from Motorola, revenues were up 21.9% from the year-ago quarter.

Google has a Zacks Rank #3 (Hold). Other stocks that have been performing well and are worth considering include Intersil Corp. , KLA-Tencor (KLAC - Free Report) , and Qualcomm Inc. (QCOM - Free Report) , all carrying a Zacks Rank #2 (Buy).

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