Wow. Whether it was the boom & bust of Buzz! (and probable resurrection), the Request For Proposal to establish a gigabit fiberoptic network (NPR news story), or the latest move for Google to purchase and resell electricity, the search giant has been inspiring tweets and blogs of all stripes the last few weeks. Our blog has reported some of these developments, and the most recent Googlegrowth deserves mention as well. What might the distribution by Google mean for the non-profit and mission-based sector of the economy?
Did you download this game for Christmas?
Google’s outreach is certainly prolific, and many have sounded skeptical, nay, conspiratorial, notes about all this recent activity (including this blogger, albeit without the sinister overtones of a Googlopoly). But we might also want to remember some important economic history that can contextualize this most recent announcement. First, many major corporations have bought electricity in great bulk and then re-sold it at a discount to private users on the grid. True, the best-known/most infamous of these exchange players was a company called Enron (BBC timetable of Enron’s Rise & Fall), which might explain many of the comments the CNET report received concerning a takeover of our microwave ovens. But the Enron case is also cautionary and – notably unlike Enron – Google has a track record of producing value and investment more often than not.
Also, Google has had interest in developing the next generation energy grid for some time. It has sponsored electric car technology, and – given its own data and server farms – Google would surely be thrilled to find ways to cut its own bills by buying in bulk and reselling unneeded wattage. If/Once work is done on a 1-gigabyte fiberoptic network, Google’s pre-emptive purchase of power will appear a no-brainer.
Moreover, Google has been committed to renewable energy and recycling for some time, and it has put up a good deal of its own capital to spur the market. One might easily see in Google’s plan a classic example of dynamic free enterprise offering solutions that government stimulus and bureaucracy can not (even if Google’s solution is one of those wacky leftist environmentally-friendly solutions). If Google has a long-term strategy to grow to carbon-neutrality, then we could see others happy to tap into Google’s resale network and push up demand for electricity producers to move away from fossil fuels.
‘Finally,’ profitable companies (those smart enough to reinvest, to diversify investment, and to pick out good bargains) invariably use lean times to buy up capital and opportunity that can be had on-the-cheap, before a growing economy raises demand and cost again. Google is much bigger than most other companies, but its behavior might be no different: why not buy up power and distribution rights, when the demand and cost for power are down? I usually buy my winter coats in April on the same principle.
All of which surely should be seen favorably in the non-profit/mission-based sectors of the economy. Environmental awareness is a shared trait of almost all these businesses no matter their focus, and Google’s move, on the face of it, could move the national debate to the ‘economic sense’ of a greener economy. I don’t think I would take my eye off Google (as one person deftly commented on the CNET report, ‘Their(sic) in that precarious position of turning from “fighting the man” to “being the man”.’) But I think the news is good for the energy sector, as Google is likely to inspire some movement on the issue of renewable energy. It could also be good news for the greening groups and non-profits who can draw on such technologies to continue their good work as well.
