Google Inc (GOOG): Fiber Is Cable’s Biggest Nightmare

Not all the growth in cable companies’ Internet customers comes from defections from the phone companies, but Internet continues to be a profitable area of growth in the industry. Charter saw an 8% jump in Internet customers in 2012 compared with the prior year. Time Warner Cable and Comcast also enjoyed substantial Internet growth last year, with annual revenues up 13.7% and 9.2% compared to 2011, respectively. With margins as high as 97% on cable Internet, according to a Bernstein analyst, these guys have a lot to lose if Google Fiber really takes off. And you can bet Google knows about those ridiculously high margins, too.

Google may be downplaying Fiber, at least in terms of how quickly it’s chosen to roll the service out to mainstream America. As Charter, Time Warner Cable, and Comcast can attest, the opportunity for Google Fiber to become a significant source of alternative revenue can’t be denied. And Google Inc (NASDAQ:GOOG) certainly has the wherewithal to invest in Fiber for the long haul, with more than $48 billion in cash and equivalents, and operating cash flow that’s off the charts.

Fiber is going to change the way we connect to the Internet, and it’s yet another example of why Google is close to an ideal growth stock. If it’s not already, Google should be on your short list of investment options.

The article Why Google Fiber Is Cable’s Biggest Nightmare originally appeared on Fool.com.

Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Google.

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