Just a few days back, Google Inc. GOOGL initiated Sidewalk Labs, a new business venture focusing on urban technologies to deal with problems like cost of living, efficient transportation and energy usage in cities.
It did, however, leave one big question lingering in our heads: what EXACTLY is this new venture working on? For now, our question seems to be answered.
Yesterday, Sidewalk Labs revealed its first project — the acquisition and merger of two companies that are working to offer free, public Wi-Fi to New York City.
Sidewalk’s First Move
New York City announced LinkNYC last year, an innovative project to turn the city’s below par payphone infrastructure into a network of 10,000 gigabit Wi-Fi hotspots.
So Google’s urban technology incubator Sidewalk Labs bought into two companies — Titan and Control Group — behind the LinkNYC plan. These two companies will now be merged into a single entity called Intersection.
According to Business Insider, theoretically, Sidewalk Labs says that it is just the lead investor of a "consortium of investors" that bought Intersection.
The LinkNYC project’s initial plans will not be disrupted. The project aims to install 500 hotspots by the end of 2015, and 4,000 by the end of next year. Overall, the project aims to install up to 10,000 hotspots in five boroughs.
Alongside Wi-Fi connectivity, these hubs will make free cell phone charging, local phone calls and city transit information among other facilities available.
Going Forward
For now, neither Sidewalk Labs nor Intersection mentioned any plans to start new projects together, but their aim is to endeavor to scale the LinkNYC model to other cities.
However, for Google, converting 10,000 outdated payphone booths into digital information and communication hubs which could potentially direct users to services like Maps or Search, certainly seems attractive.
Another point to remember is that by acquiring Titan, Sidewalk Labs will be sharing the ad revenues to be garnered from the renovated-payphones. In fact, according to Business Insider, “New York City Mayor Bill de Blasio has said that LinkNYC could bring the city $500 million in ad revenue over the next 12 years.”
Sidewalk Labs refused to reveal what share of revenues it will get.
Google currently has a Zacks Rank #3 (Hold).
Better-ranked stocks in the industry are Synacor, Inc. SYNC, PetMed Express, Inc. PETS and Stamps. Com Inc. STMP. All of them carry a Zacks Rank #2 (Buy).
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