Google has snapped up ICOA Inc., a WiFi and wired broadband hotspot specialist providing internet access at airports and other public locations, in what could be another play to bypass traditional carriers. The deal, worth $400m, sees Google acquire more than 1,500 hotspot points across 45 US states, in addition to existing partnerships with other providers including Boingo Wireless and iPass.
Update: Sources close to the situation now tell us that, in fact, the acquisition did not go ahead, and that has been confirmed by ICOA's chairman. It's unclear why the press release was published, and there's no official comment from Google at this time.
Google has said little about its motivations for the deal, beyond the terse comment that it "looks to further diversity its already impressive portfolio of companies." However, it's not hard to imagine how a network of wireless connectivity points across the US could help Google's cloud ambitions, particularly when it comes to scything away at the control exerted by carriers.
For instance, Google's Chrome OS is heavily dependent on an internet connection for its cloud-based storage, apps, and services; Google Voice, meanwhile, offers a VoIP alternative to traditional cellphone calls, but demands a data connection in order to do so. Google has had some success of late working around the traditional subsidy model of cellphone sales, with the Nexus 4 sold at a competitive rate off-contract and unlocked, but it's still reliant on a carrier's SIM.
With a network of WiFi connectivity, however, Google could operate its own telecoms alternative, providing users of its services with a way to get online that didn't involve working with AT&T, Verizon, T-Mobile, or others. ICOA also specializes in "design, installation, operation, maintenance and management" of hotspots, which could be useful skills as Google's broadband deployment continues.
Of course, Google isn't the only company wanting to work around traditional carriers. Steve Jobs apparently hoped to use a WiFi alternative with the original iPhone, having challenged Apple engineers to discover "whether synthetically you could create a carrier using WiFi spectrum"; Microsoft, meanwhile, is believed to have had a similar goal in mind when it decided to acquire Skype.
Update: Looks like this is a case of a rogue press release. No official comment from Google, though sources tell us that the reported ICOA deal is not, in fact, authentic. We're waiting to hear back from ICOA itself, but the company's CEO apparently told TechCrunch that no negotiations had been in progress.
Update 2: ICOA chairman George Strouthopoulos tells us that the company believes the press release was pushed out by "a stock promoter with a dubious interest" in the following statement:
This is NOT TRUE!! Never had any discussions with any potential acquirers!! This is absolutely false!
Someone, I guess a stock promoter with a dubious interest, is disseminating wrong, false and misleading info in the PR circles.
ICOA will report this to the proper authorities.
Update 3: ICOA chief financial officer Erwin Vahlsing, Jr. tells us that the report "is false."