Google announces bid for US 700MHz Spectrum space

Google has announced that it will bid for the mobile airwaves thanks to the U.S. Federal Communications Commission's 700-megahertz wireless spectrum auction which will take place in 2008.

The search engine giant is treading in unknown territories as it tackles a sector where it has no prior experience.

Although there are doubts on whether Google will go the whole nine yards, the move marks a decisive step by the company to up the ante and possibly compete with some of its partners in the Open Handset Alliance.

Research Company Ovum dismisses the bid though saying that "it would be a hugely risky proposition that would take Google a long way from its core business model".

A suitable analogy would be if a company like Coca Cola suddenly decides to compete in water distribution.

This thought is also shared by Iain Grant, principal with SeaBoard Group who posits that Google might actually use the wireless spectrum to attract more competition and give smaller networks like T-Mobile a chance against more traditional telecommunications companies.

Meanwhile buyers of Google shares were unequivocal as they sent the companies share prices to nearly USD 700 which means that the company is on tract to reach its record share price before new year.