pdstein - 4:36 pm on Jun 23, 2006 (gmt 0)

There are several other things to consider that counter the idea that costs of Google's Wi-Fi venture would be offset but increased revenue from the new users that get online.

1) If you assumed that all of Google's $2B of profit (or whatever it is) came from the 300 million x 72% = 216 million U.S. residents with broadband, that would amount to only $9 per person even with those ridiculous assumptions.

2) Broadband penetration in the US is already 72% and probably higher than that in Mountain View, so even if this got everyone in town using broadband it would still be only be a 28% increase.

3) The 28% of people who do not have broadband tend to have lower incomes and less education. Therefore, their value to Google is less per person than the people already online.

So, the bottom line is that this will not simply pay for itself by new broadband users clicking ads. But, who knows what this could lead to in the future. Maybe the way they get users (and politicians) to jump on board is by offering it for free now and once they prove the value of the service then they find a way to monatize it.