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Google Math

While Google strongly disputed the calculations, Scott Cleland of consultancy Precursor and founder of NetCompetition.org claims the search giant has built its business model by taking advantage of the shared economics of the Internet, thus riding on the backs of broadband providers and consumers. Here's Cleland's math:

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16.5%
The portion of total Internet bandwidth “consumed” in 2008 by Google's search engine, video streaming services and other properties.

$344 million
Estimated amount paid by Google to service providers for bandwidth consumption.

0.8%
The portion of Google's broadband payments compared to the overall payments of U.S. Internet access charges paid by U.S. consumers of $44 billion.

21 times
Thus, according to Cleland, Google's share of U.S. consumer bandwidth costs are 21 times than its payments — or an implicit $6.9 billion subsidy of Google by U.S. consumers.

“Google's business model is purposeful in arbitraging this shared resource.”
— Scott Cleland, founder of NetCompetition.org

“To say that Google somehow ‘uses’ consumers' home broadband connections shows a fundamental misunderstanding of how the Internet actually works.”
— Richard Whitt, lead counsel for Google

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© 2012 Penton Media Inc.

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