I believe the logic behind Google Fiber is to just push the competitors to a direction that is beneficial for Google.
A little bit like what they did with Chrome. To my understanding the point in Chrome was not to dominate the browser market, but affect the direction of browsers in general (fast Javascript execution, standards compliance, just a chrome for the content and not big-fat-portal-style experience).
Lolwat? Google builds multiple datacenters full of computers, sells access to them to other people, has bought a lot of dark fiber, and sells internet to home consumers in Kansas City. These are fairly capital intensive operations, but apparently Google execs have deemed them sufficiently valuable. It's kinda interesting how Verizon FiOS and other incumbant telco offerings are incredibly unpopular, while people are lining up for Google's Fiber service.
> The great thing about Google, Facebook and such is that they have tiny workforces and a small amount of hardware --
Verizon reports 177k employees, to Google's 51k. Google is smaller, but not as small as people might imagine, and if they continue rolling out Fiber and Fi, I can only imagine their footprint will grow.
> The mobile phone and internet business is also highly profitable. If you believe the advertising you see you might think it is competitive, but it is not. Just try using satellite internet and paying the high cost per GB.
It must be, because the only place I can think of where Google is buying not building is their cellular network offering, which multiplexes Sprint, T-Mobile, and US Cellular. MNOs have made it so easy to be a Virtual, Google would be foolish to bother rolling out their own infra until their subscriber base grows.