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Sprint-Clearwire deal strenthens Google's mobile credentials

The newly formed Clearwire Corp., a combination of Sprint and Clearwire's broadband business, has partnered with Google Inc. in a step that may make the search giant's mobile presence stronger.

Besides Google, Intel, Comcast, Time Warner Cable and Bright House Networks will invest $3.2 billion in the new company, bringing together the nation's key players in communication, technology and entertainment to propel the deployment of the first nationwide mobile WiMax network. What's in it for Google?

"Google could become a mobile carrier (think GPhone) or an ISP although the announcement says it has 'no current plans to do so,'" writes Greg Sterling in his blog on SearchEngineLand.com. "It also gets precise location targeting on the network for desktop/laptop and mobile ads.

"For their part the cable companies Comcast and TimeWarner get to resell Sprint/Clearwire access as part of a 'quad-play' service bundle that allows them to offer wireless phone service and more fully compete with traditional telcos AT&T and Verizon, which are moving into TV," he said.

Google will help the new company deploy Internet and advertising services, as well as with applications for mobile WiMAX devices. Google will also be the search provider for the new Clearwire retail product.

Clearwire will support Google's Android operating system software, Mr. Sterling said.

"Google is a firm believer in supporting new ways for people to access the Internet," said Eric Schmidt, chairman/CEO of Google, Mountain View, CA, in a statement.

"We are proud to invest in the new Clearwire alongside several leading technology and communications companies and we believe that its planned WiMAX network will increase the ability for users to get high-speed broadband anytime, anywhere," he said.

Sprint and Google have also entered into an agreement that makes Google the default provider of Web and local search services for Sprint.

Sprint will preload Google services such as Google Maps for mobile, Gmail and YouTube on select mobile phones.

"The combination of robust next-generation mobile WiMAX technology and nationwide spectrum that we believe is optimal for delivering mobile broadband services -- coupled with substantial new financial resources, a team of experienced wireless industry veterans and distribution and technology agreements with some of our nation's leading communications, technology and content companies -- creates what I believe to be a once-in-a-lifetime opportunity," said Benjamin G. Wolff, CEO of Clearwire, on a media conference call.

"Given the complexity of this transaction, we have taken the time and effort to do it right, by thoughtfully leveraging the resources and opportunities that we and our investors are bringing to the table," he said.

The new Clearwire is focused on ramping up the deployment of the first national mobile WiMAX network to offer a true mobile broadband experience. It expects to offer mobile wireless Internet services on many devices through integrated WiMAX chipsets, scalable operating expenses and open architecture.

The transaction has been approved by all the parties' boards of directors, and is expected to be completed during the fourth quarter. It is subject to closing conditions and regulatory approvals.

"We believe that the new network will provide wireless consumers with real choices for the software applications, content and handsets that they desire," said Larry Adler, product manager at Google, in a Google blogpost. "Such freedom will mirror the openness principles underlying the Internet and enable users to get the most out of their wireless broadband experience.

"Google truly supports open standards for spectrum and wireless handsets and hopes that this news will mean expanded and advanced high speed wireless Internet access in the U.S.," he said.

"We're looking forward to seeing the Clearwire network take shape and begin to deliver benefits to users, and we will continue to look for new partners to promote openness and bring compelling applications and services to end users."