Google: Just Like a Colonizing Force?

February 15, 2019

Can a company cross over into the monetization methods of a country? I read “Google’s Sidewalk Labs Plans Massive Expansion to Waterfront Vision” and formulated this company-country question.

If accurate the Star’s report seems to outline a way for a commercial enterprise, based in the US, to monetize or “cost recover” via methods usually associated with a nation state. The techniques may be more gentle than those early colonizers of Peru, but the goal seems to be similar.

I learned:

Google’s futuristic development on the eastern waterfront, Quayside, is only the first step in an expansive and ambitious plan to build new neighborhoods — and new transit — throughout the entire Port Lands, the Star has learned. In return for its investment in this vision, Sidewalk Labs wants a share of the property taxes, development fees and increased value of city land that would normally go to city coffers.

The source of this monetization method comes from “internal documents.” Like Bloomberg’s revelations about fiddled motherboards, the information could be viewed with skepticism.

google toronto

Let’s assume that the story is spot on. The revenue from this technology revitalization effort is characterized in the article:

These future revenues, based on the anticipated increase in land value once homes and offices are built on the derelict Port Lands, are estimated to be $6 billion over the next 30 years. Even a small portion of this could amount to a large, recurring revenue stream diverted from the city into private hands.

The money generated from what is usually described as “development” by property professionals would flow to the government entities. These in turn would repair roads, provide services, and educate children. Google, I assume, would use these funds to further its commercial interests and continue its efforts to solve death, develop more sophisticated online advertising methods, and rekindle the Google Glass technology, among other high value endeavors.

There are upsides. The area would become more valuable to the city and its residents.

Nevertheless, the coupling of funding methods commonly associated with nation states and governmental agencies with Google is interesting.

Perhaps the same approach would work for Google in China and Russia? But leaders in those countries may not entertain Google’s 21st century approach to a public private partnership.

In Louisville, Kentucky, Google pulled out of its high speed access project. That’s just one risk of cutting deals with commercial enterprises. Google, in particular, can change its mind. Like Amazon, companies wield real power. New York City and environs are waking up to the reality of Amazon’s bidding the Big Apple farewell.

What happens if Google becomes disenchanted with Toronto? A pull out could have significant financial consequences.

But the idea is interesting, and certainly worthy of Francisco Pizarro’s advisers.

Stephen E Arnold, February 15, 2019

Stephen E Arnold

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