Feature Article

November 26, 2012

Google to Buy IOCA? No, Wait, That Isn't True!

Second Update: Following our first update directly below, the Associated Press has decided to withdraw its story about a purported acquisition of ICOA by Google.

UPDATE: We’re going to stick with the information provided in our article below for now, but a new bit of news from the Wall Street Journal was just posted at 12:38 this afternoon that notes the following:

“Google Inc. didn't acquire wireless broadband provider ICOA Inc., according to an ICOA executive. Erwin Vahlsing, Jr., ICOA's chief financial officer, said in an email that an online press release claiming Google had acquired ICOA for $400 million "is false." He didn't immediately respond to requests to elaborate on the statement.”

Google  announced this morning that it has reached an agreement to acquire Wi-Fi services provider ICOA at what we consider to be the bargain valuation of $400 million. ICOA has been under financial difficulties and financial duress for a good bit of time now, and the company – which at one point was going to make an acquisition of its own – will now be rescued from a lesser fate. Before it fell on hard times, (though it looks to us that the company was already under financial strain) ICOA was just about set to launch an M&A deal for a majority ownership of Tango Software. It announced the M&A activity in July 2012 and then had to unwind the deal in October.ICOA has been in the Wi-Fi business for quite some time, dating back to at least 2004. Those were assuredly tiny deals back then – for example, among its earliest, ICOA had been contracted by Sporty’s Pilot Shop at Clermont County Airport, Ohio to provide equipment and support for the deployment of Wi-Fi high-speed Internet access at Sporty’s Cafe at the airport. Tiny indeed! Image via Shutterstock

Since those days the company has grown to provide both general as well as managed services Wi-Fi solutions for hotel, parks, metro, marina and restaurant environments. From a platform standpoint, ICOA has built a number of capabilities. These include Tollbooth OSS, Managed Services, Design and Deployment Services, Wi-Fi Content and Presentation Services, and our own particular favorite relative to Google – Advertising Services.

ICOA defines itself as follows: a national provider of neutral-host wireless and wired broadband Internet networks in high-traffic public locations. ICOA delivers 802.11x standard WLAN Wi-Fi hot spot and hot zone infrastructure throughout airport facilities, quick-service restaurants, universities, travel plazas, marinas, hospitality and municipal/hot zone locations.

As stated, most of ICOA’s capabilities have to do with delivering Wi-Fi and Wi-Fi hotspots. That said, its Tollbooth OSS capabilities were developed, using industry standard software components, to offer a concise and powerful platform on which to implement a large scale public Internet service. We aren’t aware of any ICOA customers for the service of any financial consequence, but perhaps Google may find itself in a position to expand these capabilities significantly. 

That leaves us with the so-called advertising capability – and of course this should be considered perhaps the primary pieces of the puzzle behind the acquisition. To be perfectly honest however, this merely looks to us to be nothing more than a few words rather than a “service.” The ICOA website itself merely notes the following regarding it: “ICOA receives over 500,000 logins/month from users of its hotspots. If you want to reach these Internet-aware consumers, you’ll want to advertise on our portal and landing pages. Contact our sales team at sales@icoamail.com for more information.” 

That is hardly a business, and hardly anything Google couldn’t whip up on its own in about 20 minutes, but the entire ICOA package of services is likely headed directly to Google’s new Kansas-based high speed network facilities. We’ll see how things develop, but for Google this is nothing more than the tiniest of tuck-in technology buys. From a financial perspective there are no other details, however it appears that ICOA was a “fire sale” of sorts, with Google stepping in to make a “rounding error” acquisition that adds to Google’s ability to deliver free Wi-Fi hotspots. The company recently agreed to “sponsor” a number of Boingo hotspots, and may be looking at Wi-Fi as a means to bolster advertising capabilities on its own Nexus tablets and smartphones. 

 In any case, the Rhode Island-based ICOA may have seen its last days as a standalone entity, but its solutions and technology will live to see another day – Kansas perhaps. There’s no place like a new home after all (with apologies to the Wizard of Oz).

Edited by Brooke Neuman

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