NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Google announced this week that it has selected Abuja, Nigeria as one of about seven African cities the company will fully connect with a wireless network. Although described as one of Google’s “social responsibility projects”, the announcement follows the company’s proposal last October to create a citywide Wi-Fi network for San Francisco. Could Google’s activities in Africa be a central part of its long-term business strategy?

This is just the latest example of Google focusing its resources on the “base of the pyramid”. Last year, the company announced the creation of a foundation with the explicit goal of ?giving on world poverty and the environment.” One of the most interesting aspects of the fund is that it will support for-profit enterprises. The company has also chipped in $2 million to MIT’s One Laptop Per Child (OLPC) program, which aims to distribute cheap laptops to millions of children in emerging markets.

So what is Google’s plan for its Wi-Fi network? The company confirmed last month that it is preparing its own distribution of Linux for the desktop.Dubbed ’Goobuntu’, the software follows closely on the heals of the release of Google Pack, a collection of desktop software that includes apps such as Google Talk, Google Desktop, Mozilla Firefox, the Trillian instant messenger client, RealPlayer, and Picasa photo management. Together, they form a powerful competitor to Microsoft in the desktop software market.

Combine that with some online open-source applications (like OpenOffice) and a few gigabytes of storage space – which the company is already offering users of its free email service – and you have a system where your mail, pics, and office files are backed up, stored offsite, and easily searchable and updateable from anywhere in the world!

Such a network would compete directly not only with Microsoft, but with incumbent local telecom and cable providers as well. Not surprisingly, BellSouth, Comcast, Cox, Qwest, SBC, and Verizon, have been lobbying Congress to stop municipalities from building city-wide wireless networks in the US. A number of states, including Pennsylvania and Virginia, have also passed laws that restrict municipalities’ from offering broadband services.

But in Nigeria and other emerging markets looking to expand their IT capabilities, the Google intervention is being welcomed. In places where computer ownership is minimal, the real value-add is in the applications. Providing a virtual desktop, applications and nominal storage space would give users the same basic functionality they would get by owning their own personal computer, but without the large up-front costs that most people in developing countries can’t afford.

One more example of a company finding that its products & services, originally designed for top-tier markets, may in fact be more successful and fulfill a greater needed at the BOP. If Google can succeed in Africa, it’s likely the lessons it learns there will make it more competitive in the US and elsewhere. And what better way to get government support for other city-wide networks in the US than by clearly demonstrating the economic value such a network creates? It all seems like a great forward-looking business strategy to me.