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Shawnee Gets Google Fiber Service

Zacks Equity Research

Reportedly, search giant Google Inc. (GOOG) has announced the expansion of its high-speed Internet service through its fiber-optic network to Shawnee, located outside Kansas City.

Google’s ultra high speed service named Google Fiber is already available in Kansas City. Last month,the company announced its plans to expand the service to Provo, Utah and Austin, Texas. Google has not yet mentioned an exact date for rolling out Google Fiber in Shawnee.

Google provides the service under three plans. In the first one, the residents pay $70.0 a month solely for the Internet connection. The second plan comes at a price of $120.0 and offers TV service, a digital video recorder and a set-top box along with a tablet-computer remote control. The third option offers seven years of free Internet access at slower speeds for which the customer needs to pay a one-time installation fee of $300.

Google is banking on its speed to attract users. This can open another growth avenue for the company as speed has been the limiting factor for increased consumption of video and other data-heavy activities through the Internet. Whether Google can make it commercially viable is still not clear because others (Verizon and AT&T) have previously tried and failed. However, if successful, Google TV could catch on fast.

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In the first quarter of fiscal 2013, Google reported solid earnings of $10.07, exceeding the Zacks Consensus Estimate by $1.24. Google’s gross revenue (including total traffic acquisition costs[TAC]) came in at $13.97 billion, representing a year-over-year increase of 31.2%. However, revenues excluding TAC came in at $11.0 billion, 12.7% lower than our estimated $12.6 billion.

Google has a Zacks Rank #3 (Hold). Other stocks that have been performing well and are worth considering includeYahoo Inc. (YHOO), Facebook Inc. (FB) and Akamai Tech. (AKAM).While Yahoo carries a Zacks Rank #1 (Strong Buy), Facebook and Akamaicarry a Zacks Rank #2 (Buy).

Read the Full Research Report on GOOG

Read the Full Research Report on FB

Read the Full Research Report on YHOO

Read the Full Research Report on AKAM

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