Wait a Minute. Does Google Really Want to Be a Cable Guy?

Before you envision the rollout of a nationwide Google pay TV service, consider: Building out and maintaining a cable TV (and broadband) service is enormously time-consuming, expensive and messy. So why does Larry Page think it makes sense for him?

He doesn’t, according to Sanford Bernstein analysts Craig Moffett and Carlos Kirjner in a note this morning. Instead, they argue, Page and Google have to be thinking about Kansas City as an R&D experiment meant to accomplish three things:

• First, it helps Google (slightly) on the public policy front as it promotes the agenda of faster broadband, and it potentially adds to their status in promoting net neutrality. Faster broadband means more Internet usage, more searches, and more ads. Of course, the real regulatory game is a few orders of magnitude more sophisticated, but every little arrow in the quiver helps.
• Second, it is a laboratory for Google to learn about technology and consumer behavior, ranging from the impact of higher speed access on Internet usage to the potential and economics of different ad formats and models, on different platforms, particularly when it comes to advertising associated with video and TV.
• Third, it is an opportunity for Google to learn about the economics of deploying and running infrastructure. And learn they will…
• Analysts like to pull their punches, but Moffett and Kirjner are crystal clear here: There’s no way they think Google becomes the “world’s biggest cable company” or anything like that.