FON, Google, Skype and Why It Matters

Yesterday, FON announced that Google, Skype, Sequoia Capital and Index Ventures will be backing them with 18 million Euros.

FON is company that has one purpose – wifi for everyone. Basically you download some software, install it into your router, and start sharing your bandwidth. You can read more about how FON works and the company’s business model here.

Now why does that matter? Sure free wifi is great, but why are companies like Google and Skype investing in FON?

First lets talk about Skype.

Skype has been slowly introducing products focused beyond the desktop. Recently Skype announced that soon you’ll be able to use Skype on wifi phones. Combine the Skype wifi phone with the FON network and you have a phone that can work anywhere (assuming the FON network spreads globally) – similar to cell phones but on the current internet broadband network.

So instead of having to sign up with a cell phone provider, you could use your current Skype username with a Skype phone and use that phone to talk anywhere – seamless transfer between your online contacts and your offline contacts using one product.

What about Google?

Similar to Google’s relationship with Mozilla, this represents a chance to get in at the beginning with FON. Google can place their services at every point inside the FON network – the portal that pops up when people log in, the default search engine for FON users, the default mobile search for Skype+FON users, etc. If FON spreads globally and Google is the default for FON users, this represents an easy way for Google to secure users.

Right now, cell phone users have to pay a premium for data usage (browsing /text messaging). With a wifi based phone, I can see data usage becoming much more widespread which would help mobile applications like Google mobile /Google local.

This could be the start of something real big.